Canada’s Gateway Casinos Contemplates $2B Sale Amidst Industry Shifts

Gateway Casinos & Entertainment Ltd., one of Canada’s leading gambling enterprises, is currently weighing its strategic options, considering a potential sale or other avenues, sources familiar with the matter disclosed. The company, which boasts 31 gaming properties scattered across British Columbia, Ontario, and Alberta, is actively seeking a valuation of around $2 billion, including a substantial debt load.

Gateway Casinos Seeks Investors with Morgan Stanley and Macquarie

Gateway Casinos, with its flagship property, the Grand Villa Casino, nestled in the Vancouver suburb of Burnaby, has enlisted the services of financial heavyweights Morgan Stanley and Macquarie Group Ltd. to identify suitable investors or acquirers, maintaining confidentiality during these private deliberations, reported Bloomberg. The casino powerhouse, which celebrated its 30th anniversary just last year, has experienced significant growth over the years through strategic acquisitions and internal expansions.

While the majority of Gateway Casinos is currently owned by the private equity firm Catalyst Capital Group Inc., the prospect of a potential sale has piqued the interest of various stakeholders in the gaming industry. Analysts speculate that potential suitors might emerge from private equity circles or regional casino operators based in the United States. However, some US-based casino giants, including Caesars Entertainment and Century Casinos, might not be inclined to expand their presence in the Canadian market at this juncture.

Gateway Casinos Emerges Strong Despite Challenges

Gateway’s exploration of strategic alternatives comes nearly three years after a planned initial public offering and merger attempt with a special purpose acquisition company (SPAC) fell through in 2020. Despite previous setbacks, the company, currently employing approximately 7,200 individuals and offering an extensive array of entertainment options, remains an attractive proposition for investors eyeing the Canadian gaming market.

Industry insiders suggest that potential buyers must be bullish about the future of Canadian gaming, considering the country’s comparatively smaller population, less than California’s. The gaming giant currently features 391 table games, including 31 poker tables, 14,288 slot machines, 81 food and beverage outlets, and 564 hotel rooms, making it a comprehensive entertainment destination for patrons.

The company was quite shaken up this year as on August 17, 2023, Tony Santo, the visionary CEO and director of Gateway Casinos, passed away. Santo, who played a pivotal role in Gateway’s growth from a small regional gaming company to one of Canada’s largest gaming companies, had been with the company since 2013. In April, Gateway Casinos was also severely affected by a ransomware attack that led to temporary closures of its Ontario casinos, focused on enhancing data security.