SaskGaming posted a loss for the 20-21 fiscal year. The 13.4 million dollar shortfall is the first in the public casino operator’s 25-year history.
Complete details are available in the Crown Corporation’s annual report, but SaskGaming blames COVID-19 for the loss.
“This reporting year was unlike anything SaskGaming has experienced in 25 years of operation,” said CEO Susan Flett in a news release.
Both of SaskGaming’s properties, Casino Regina and Casino Moose Jaw, closed for almost seven months at the height of the pandemic. Limited capacity upon reopening resulted in only a modest rebound to small to offset the losses. Seven other Saskatchewan casinos are under the jurisdiction of the Saskatchewan Indian Gaming Authority (SIGA).
The closures also temporarily furloughed almost 570 full-time employees.
SaskGaming’s 2021 fiscal year suffers a slow start
Two weeks into a four-month-long closure of both casinos, SaskGaming kicked its new fiscal year off.
Even in July 2020, when casinos could reopen with a limited capacity, it was a challenge. The lower occupancy led to reduced food and beverage services and reduced hours. An increased need for cleaning of high-traffic surfaces also played a factor.
Despite those challenges, the company managed to earn a profit during Q2. But a November spike in COVID-19 cases led to further restrictions and a second casino closure in December. They remained closed for the rest of the fiscal year.
As a result, revenue fell to just $30.9 million in 2020-21. A significant difference compared to the $114.1 million from the year before. Although temporary layoffs meant decreased expenses, it wasn’t enough of a drop to make up the deficit.
SaskGaming is hopeful its properties will be fully operational when the province’s COVID-19 restrictions relax. However, due to the pandemic’s uncertainty, the company hesitated to forecast the current year.
The butterfly effect
Unfortunately, SaskGaming’s losses may affect more than just their direct operations.
Typically, 50% of SaskGaming’s net income goes into the province’s general revenue fund. Of the rest, 80% goes to its holding company, Crown Investments Corporation (CIC), as a dividend.
Due to the last year’s losses, this year, SaskGaming made no payment to either. Instead, they received $4 million from the CIC.
The lack of funding is potentially a problem. Usually, the general revenue fund helps back obligations to the First Nations Trust, which provides money to First Nations in the province. Those dollars get spent on economic and educational development, senior and youth programs, health initiatives, and other charitable efforts.
The Community Initiatives Fund and Clarence Campeau Development Fund work similarly but focus on community vitality and Métis people.
However, the 2020-21 and 2021-22 provincial budgets included support totalling $80 million for the affected organizations.