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Before and after look set to become two of the most used words in the english language, as the commercial world begins to awaken from its forced hibenaion. The casino industry, like many industries with roots in hospitality and entertainment, has been slow to emerge. This is due, in part, to new rules and restrictions placed on casino operations as a result of the COVID-19 pandemic. It is becoming increasingly apparent that the after landscape of the casino industry will bear, at least for the forseeable future, little resemblence to the landscape before the pandemic. The first part of the report provides an overview of the Canadian casino industry, the broad trends underlying the market before the pandemic, the closure of casinos, and the graduated reopening of the industry- The second part of the report provides a more detailed analysis of the closures and reopenings on a provincial basis, including any new rules and regulations, and the response of the major players. The final section of the report discusses major industry trends and theit ongoing impact. Given the pandemics unprecedented disruption of the Canadian casino idustry, the impact of the pandemic on these major industry trends is also considered.

Before – An Overview of the Canadian Casino Industry

  • Between 2015 and 2020, Canada’s casino industry experienced a decline in revenue of 1.2%. Consumer demand for gambling has experienced a downward trend over the past few years, a trend seen consistently in gambling habits across the western world. While the growth of the offshore online casino has contributed to the decreased consumer demand, the online casino also presents with an opportunity that has the potential to change the landscape of the Canadian Casino industry.
  • Despite this, the overall industry outlook was generally positive, the industry piggybacking on the government’s expansionary economic policy and a period of economic growth. The consumer typically sees their discretionary income increase during periods of economic growth, which would typically positively impact the Canadian casino industry.
  • This was the general industry viewpoint at the beginning of 2020. The reality is the COVID-19 pandemic has been one of the biggest disruptors in the history of the casino industry, with probably only the prohibition of gambling presenting as a more significant threat.
  • Within a window of just 72 hours, the Canadian casino industry ground to a complete halt, when 112 of the 186 casinos in Canada (including 56 first nation and 56 commercial operations) were forced to close their doors indefinitely as the pandemic tightened its grip on the country. The remainder quickly followed suite. The ongoing employment of many of the industry’s 182,000 employees will remain in jeopardy for the foreseeable future, as will many industry players’ ongoing financial viability remains uncertain.
  • The effects of the pandemic on the industry will we felt well beyond the industry bounds. Canadian casinos contributed $9.6 billion to government and charitable funding in 2019. This funds a range of social spending initiatives. For example, in British Columbia, the gambling industry funds “health care and education, and supports economic development throughout the province.” An increasing number of organizations and programs face possible closure if the $31. billion casino industry does not recover.
  • A recent global study of the casino industry saw Canada take fourth place in the revenue lost per day stakes, losing $23 million CAD per day. The numbers of the global casino industry bear testament to the devasting effects of the pandemic.
  • For nine weeks, the slots remained quiet, with all Canadian casinos closed. The reopening process has been slow, the individual provinces governing the schedule and rules for the casinos located within their boundaries.
  • Industry players have also played an enormous role in reopening the Canadian casino industry, with many taking a conservative reopening approach. There is little doubt that the new rules they are required to adhere to are contributing to this, especially given many have undermined the financial viability necessary for the casinos to reopen. CEO of the Canadian Gaming Association, Paul Burns, has said, “Where we’ve had reopenings, demand has been good. Customers do want to come back, but they also want to know it’s safe. We have to get this right for customers.”
  • As the following graph dramatically illustrates, a small window of just a few days beginning on 12 March 2020, when the Casino de Montréal closed, Canada shut down its entire casino industry. Casino Closures and Reopenings
  • Throughout the remainder of March, April, and most of May, not a single card was dealt as the casino doors remained locked. The reopening process has been staggered and slow with commercial and first nation casinos following the same overall general trend,
  • The reopened casinos bear no resemblance to their pre-pandemic selves. One industry commentator explained, “Canadian gamblers are trading in cards and chips for temperature checks, hand sanitizer, face masks and disinfecting wipes.”
  • Almost all of the attractions and amenities, such as “valet service, buffets, live shows, spas, and nightclubs, remain closed.” The familiar sounds of a casino gaming floors bear are muted. The majority of the gaming tables remain closed, and the number of slot machines available has been reduced substantially. A rigorous cleaning protocol is being implemented by casinos, which sees gaming machines wiped down and disinfected between each use. Disinfectant and antimicrobial gels and wipes are present throughout the gaming areas, and plastic barriers are in place between slot machines and player seats at the gaming tables. The days of 24-hour opening are a distant memory, with casinos forced to close their doors for cleaning at least once each day.
  • Some casinos have looked to implement other changes to enforce the reduced number of people allowed in the casino at any time. These include apps telling patrons when they can enter and live count capacity monitors to minimize the need for lines.
  • When the casinos began reopening at the end of June 2020, it was Alberta leading the way. The following graphic illustrates the percentage of casinos reopening at a provincial level as at 21 September 2020. Provincial Reopening
  • As at 21 September 2020, 111 casinos or 60% of Canadian casino properties were open, while 75 or 40% remain closed.

Provincial Analysis of Closure and Reopening of Canadian Casino Industry

  • The reopening scheule for the casinos in each province and the rules and restrictions reopening casinos must adhere to are set out below.
  • Alberta was the first province to allow the reopening of casinos. Currently, 28 or 90% of the casinos in Alberta are open. Only three casinos remain closed. The following chart shows the closing and reopening of Alberta casinos sinc March 2020. Alberta declared a public health emergency on 17 March 2020. This required all casinos to temporatily close. Casinos began reopening on 12 June 2020. Alberta
  • The Alberta provincial government has developed a set of guidelines that govern the reopening of casinos in the province. The guidelines require each casino to “implement practices minimizing the risk of transmission of infection among attendees, provide procedures for rapid response if an attendee develops symptoms of illness, ensure that attendees maintain high levels of sanitation and personal hygiene, and comply, to the extent possible, with the COVID-19 General Relaunch Guidance.”
  • The guidelines say, “Beyond the expectation of social distancing, which is maintaining a distance of two meters between patrons, there have been no additional capacity restrictions placed upon casinos. Masks are not mandatory, although they are strongly recommended.”
  • The comments of Corinne Kurelek Leger are indicative of a number of people that have attended Alberta´s casinos since they reopened. “My husband and I went. Not very many machines are available to use, which we understood. I wish though that with so few machines to play that they would do away with being able to reserve a machine.”
  • British Columbia has some of the strictest rules relating to the reopening of casinos in the province. Currently, only one gaming property that caters to racing without spectators is open in British Columbia. The remaining 37 or 97% of casinos and gaming properties remain closed for the foreseeable future.
  • Casinos in British Columbia closed when the provincial government issued the following order, “BCLC is confirming that an orderly shutdown of all casinos, community gaming centers and bingo halls across B.C. is underway. We expect the closure to be complete across the province by 11:59 p.m. local time on March 16, 2020.”
  • British Columbia health authorities initially considered casinos to be part of the phase 4 reopenings. Phase four reopenings will not occur until there is a “vaccine, broad community immunity, or successful treatments.” This approach was not without controversy, with the union representing the majority of British Columbia’s casino workers disputing the science which has forced casinos in the province to remain shut, while others nationally are reopening.”
  • More recently, the body governing casinos in British Columbia, the British Columbia Lotteries Commission, seems to have softened its stance on the reopening casinos saying they were working with operators to reopen them sooner than previously expected,
  • Manitoba has ten casinos within its boundaries. Eight of these casinos have reopened, representing 80% of all casinos, Two or 20% remain closed. The following chart is a graphical representation of the casino closures and subsequent reopenings in Manitoba. Low infection rates have helped in reopening the casino industry in Manitoba at an earlier than expected date. Manitoba
  • Manitoba Liquor and Lotteries announced the closure of casinos in the province on the 17 March 2020 due to the pandemic. It was announced on 22 July 2020 that casinos would be allowed to open from 25 July 2020. The first casinos reopened in Manitoba on 29 July 2020. Casinos were considered a phase 4 industry when reopenings were being planned.
  • The casinos are allowed to be open between 1000 and 0300 daily. No extended hours are available due to the cleaning protocols that have been established. There will be no extended hours until further notice from the Public Health Authority. Masks are not required to enter the casino. Patrons must self-screen for the virus, with temperature and health checks not being undertaken by the casinos. There are some variations between casinos, but generally, table games, the Poker Room, and Bingo remain closed at most casinos. All casinos are operating at reduced capacity to ensure social distancing protocols are adhered too.
  • Currently 94% or 16 of the provinces 17 casinos have reopened, after being forced to close on 16 March 2020. The closure and reopenings are represented graphically in the following chart. New Brunswick
  • The New Brunswick Lotteries and Gaming Corporation announced the reopening of New Brunswick casinos from the 26 June 2020, subject to “appropriate distancing, sanitizing and operational plans that respect Public Health Guidelines.”
  • The Great Canadian Gaming Company, one of the major players on the casino landscape, announced it would not reopen in New Brunswick until 28 September 2020. When the casinos reopen, they will be forced to run at 25% of capacity, with just over 50% of their slots operating. Most amenities will remain closed. This is the same protocol being followed by the majority of the players in the New Brunswick casino space.
  • Newfoundland & Labrador have no casinos.
  • Northwest Territories has no casinos.
  • Nova Scotia´s 28 casinos closed in the week of 14 March 2020. They have been able to reopen since 9 June 2020. Initially, casinos were slow to reopen, with several grappling with the new restrictions on capacity and other protocols they were required to adhere to if they wished to open. The closing and reopening of the industry is represented in the following graph. Nova Scotia
  • 64% or 18 of Nova Scotia´s casinos have now reopened. A further ten, representing 36% of the casinos in Nova Scotia, are still to reopen. It is unclear what the reason for their delay has been. The remaining casinos all plan to reopen at some point during October 2020.
  • Ontario has adopted a more complex reopening procedure than many of the other provinces. The majority of the casinos in Ontario closed at the diction of authorities on 14 March 2020. To date only 32% or 12 of the provinces casinos have reopened. A further 25 or 68% are still to reopen despite the easing of restrictions. The closure and reopening of Ontario´s casinos are represented on the below graph. Ontario
  • Initially, plans were made to reopen the casinos during phase 3, but a resurgence in the virus´s incidence in the province forced the plans to be put on hold. With a number of industries planning their reopenings over the coming weeks, casinos will be just one of a number of businesses opening their doors for the first time in six months.
  • Among the first to reopen in this wave are the Great Canadian Gaming Corporation´s 11 casinos. One of the issues contributing to the delayed opening in Ontario is the challenges the restrictions have caused; making it hard to run an economically viable operation given the restrictions required. GCGC will be limited to just 50 patrons, reduced slots, and notable games, while compliance with government protocols will result in increased costs.
  • The two casinos operating on Prince Edward Island closed on 24 March 2020. They both reopened on 27 June 2020 with a limited capacity at both locations, based on directive from the Chief Public Health Office. A rewards card was required to gain entry.
  • Quebec is home to ten casinos, with 90% of them having reopened. Reopening began on 9 July 2020 with strict rules being implemented by authorities to maintain social distancing within the casino properties. The casinos were closed by the 13 March 2020. The closure and subsequent reopening of the industry is represented in the following graph. Quebec
  • Quebec casinos were among the first to offer table games nationally, with social distancing protocols limiting the number of players at each table to three.
  • One of the two casinos still to reopen has announced, it will not reopen. Its doors will instead remain permanently closed.
  • Saskatchewan casinos closed on 16 March 2020 at the recommendation of government and public health officials. Currently, 82% or nine casinos have reopened. Two casinos, or 18% of the province’s casinos, remain closed at this time. Casinos in Saskatchewan began reopening on 9 July 2020. The following graph illustrates the closure and reopening of the Saskatchewan casino industry. Saskatchewan
  • On 16 March 2020, the Saskatchewan Gaming Authority announced it was closing all the casinos in Saskatchewan for two weeks. The hiatus extended beyond the initial two weeks they planned, with casinos not starting to reopen until 9 July 2020, with social distancing protocols having become a part of their daily operational requirements.
  • The Yukon has just one casino in Dawson City, Diamond Tooth Gerties Gambling Hall. It was closed on 12 March 2020 and reopened on 9 July 2020. Capacity is currently limited to 100 patrons. There is a limit of six people at most tables, although Blackjack and Roulette have a two person table limit. Poker is not currently available, while all shows have been canceled.
  • In Ontario, several new casinos have been approved for construction by the provincial government. Construction will take place over the next few years. The casinos that are to be built are all luxury establishments and include a private Las Vegas enterprise looking to add locations in Toronto, Ottawa, and Kingston. The Ontario government and the casino developers have made no comment on whether the pandemic will impact on their construction timeline.

After – The Future Trends of the Canadian Casino Industry

  • The future for many within the Canadian casino industry is far from certain due to the pandemic´s ongoing path of devastation. The following trends are expected to play a part in the future development of the industry.
  • Before the pandemic, a trend towards online casinos had been seen within the casino industry. For casinos of the bricks and mortar type, online casinos initially represented a significant challenge to the hold they had over the industry, with the majority being run by offshore companies.
  • The Canadian government removed many of the restrictions relating to online casinos in Canada, making it one of the less-regulated countries . As a result, an opportunity to expand into this space is available to both new and current players on the Canadian casino landscape. Already British Columbia and Quebec both have online casino sites, and Ontario is in the process of developing its own. The demand for land-bsed casinos is expected to reverse its downward demand, as a new demographic of consumers become familiar with the online games and look to expand their sphere of influence into land-based casinos.
  • Talks are currently underway between the three government groups, with the likelihood of a collaborative national online casino becoming an increasingly more likely option in the very near future.
  • This trend was developing momentum well before the pandemic reared its ugly head with “land-based casinos only marginally losing market share to high-profile iGaming operators.” Notwithstanding this, there seems little doubt by industry experts that the pandemic will result in the escalation of this trend. Several industry experts have recognized the pandemic impact on specific groups within the Canadian population. Many casino regulars are no longer willing to risk their health with a visit to their local casino.
  • Vancouver Island local, Marcia Coward-Wilson, and her partner were casino regulars before the pandemic. It was not unusual for the two of them to take a road trip, visiting all six casinos on the Island in a single day. As someone with autoimmune disease, Coward-Wilson has no plans to visit a casino when they eventually reopen in British Columbia, worrying about the interior surfaces’ cleanliness and recirculated air. She said in an interview recently, “I certainly will not be going back when they open. COVID is still an unknown. Every day, you hear something new about it. I get a gnawing in my stomach that tells me I don’t want to go near a casino anytime soon.”
  • People like this will contribute to the growth of the online casino industry to the extent the gambling market is expected to grow to $181 billion over the next couple of years, with the majority of the growth being seen in the online casino sub-industry. The availability of high-speed, secure internet services with 4G and 5G development is also a contributing factor.
  • nos have led the consumer towards a cashless environment based on loyalty and rewards points over the last few years. The number of patrons using a cashless system within certain casinos has steadily been climbing. It should not be ignored.
  • Surprisingly, the pandemic presents as an ally to the casino industry and will no doubt be a causative factor in the increasing levels of adoption of cashless casino systems. Fear will contribute hugely in consumer decision-making for some time to come. Fear of the virus and contaminated surfaces will influence consumer behavior and make them more likely to consider using a cashless system within a casino.
  • Despite a decrease in the gambling habits in Western society, there has been a trend building related to the high stake and professional gamblers. Over the last few years the tickle of gamblers playing at a professional level and in high stake situations has become a slow but steady trickle. It has certainly raised the attention levels of industry experts.
  • Previously., the professional gambler has been a trademark symbol of the Eastern markets. Its trickle into the Western landscape has the potential to create some disruption, with casinos looking to gain a competitive advantage in this area over the coming years.
  • The pandemic has resulted in widespread redundancies within the Canadian casino industries, with a number of jobs remaining in jeopardy despite the reopening of casinos in the majority of the provinces. Quebec´s regulatory authority announced that 2,250 employees were to be made redundant on 1 July 2020. Many expect the number of industry job losses to escalate over the coming months, as the effects of the pandemic reach maximum impact on the Canadian population.
TDM

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