Gambling is big business in Canada about $16-billion worth annually. It's little wonder that large companies are maneuvering to get in on the action.

Transcription

1 HOLLY FRAUGHTON Special to Globe and Mail Update Gambling is big business in Canada about $16-billion worth annually. It's little wonder that large companies are maneuvering to get in on the action. Small players, however, are forced to find less obvious ways to get their piece of the gaming pie. "When you look at a casino, whether it's downtown Halifax or Sydney, there's the behind-the-scenes jobs, little companies like ours, that supply them," said Terry Clark, president, chief executive officer and owner of Winnipeg-based Accro Furniture Industries. "Think of all the things they've got in there: the tables, the dice, the uniforms, lighting all the things that go into a gaming facility and it keeps a lot of Canadian industry busy." With a staff of more than 30, Accro manufactures and maintains metal furniture. In the sixties, seventies and eighties, Accro supplied folding bingo chairs to community halls across the country. In the mid-nineties, as casinos started popping up across the country from video lottery terminals in hotels and legions to facilities purposely built for gaming Accro seized the opportunity. And with the necessary connections from its bingo days, working with casinos was a natural fit, says Mr. Clark. Today, the company has gaming clients throughout North America and is one of the go-to companies for custom seating. If you go into the Great Canadian Casino in Halifax or in Sydney or into the Charlottetown Riding Park in PEI or the brand-new Casino Moncton that opened a year ago now, it s all our seating, he adds. Accro isn t the only small Canadian company keen to work with casinos; there are many others, including Spielo, a Moncton-based company that designs and manufactures gaming machines and software for casino operators worldwide, and Amaya Gaming, based out of Quebec, which designs, develops, manufactures and distributes technology-based gaming products in Canada and further abroad. They most recently launched SMS lottery in Kenya. 1 / 5

2 But the gaming industry, with its booming potential for small businesses, is not an easy one to crack. It s what Paul Burns, vice-president of the Canadian Gaming Association, calls 'privileged,' meaning, to sell to a casino or to a gaming company one must be licensed, and go through the provincial regulator and be approved as a supplier. The industry, it has its past, and it s a way to ensure that we never go back to that past, as an industry. Regulators have set bars for entry into the business, so they want to know who you are, and character, and who owns the business and where the money may go to, if they re selling product, Mr. Burns explains. Some jurisdictions are more regulated than others. In Ontario, for instance, a company must be licensed to be a supplier, even of non-gaming related items, such as a slot or blackjack chair. It s rigorous, says Mr. Clark, but it ensures them that everything is above-board and on the level and not just perceived, but actual. Accro s license is renewed annually, and every four years they undergo an internal audit as part of that process. The company executives who deal with the Ontario Lottery and Gaming Corporation (OLG) are fingerprinted and criminally investigated. But Mr. Clark doesn t seem to have a problem with jumping through all the hoops. It s a condition of doing business, and it levels the playing field every supplier has to go through that, Mr. Clark said. And the paperwork doesn t seem to be hampering growth of the industry., the total economic impact of the gaming industry in Canada was $16,016,401,000 for Back in 2006, the economic impact was $15,318,567,000 a 4.6 per cent increase over a four-year period. 2 / 5

3 The recession hammered the industry in Eastern Canada, but there was solid growth in most of the Western provinces. And while lottery business has picked up, aspects of the casino gaming industry have fallen off. The gaming industry in Canada is maturing; I think that s what we re seeing. The fact is, expansion is more modest, more strategic, Mr. Burns said. While no new major gaming facilities are currently being built in Canada, Mr. Burns points out that many facilities have improved or expanded, and are trying to round out the entertainment experience for guests. In Las Vegas, North America s gambling Mecca, for example, much of the growth is actually fuelled by activities that are off of the gaming floor. A decade ago, they made 80 per cent of their money from gambling. Today, it s about 45 per cent. But they ve had a huge growth in revenue. Where does it come from? Food and beverage, shopping, and entertainment, Mr. Burns said. He also points to Casino New Brunswick, which opened in May 2010, as an example of a modern, well-rounded gaming facility in Canada. They looked at the broader impact on tourism, and built not only a casino, but also a hotel, spa as well as convention and entertainment facilities. Hugh Mitchell, CEO of Western Fair in London, Ontario, has been involved in the racing and gaming industry in Canada for almost two decades. He agrees that gaming facilities now need to create a richer experience to attract new visitors. I think the industry needs to embrace other forms of entertainment, other forms of gaming, packaging it up, bundling it up and presenting a multi-faceted approach to the entertainment market, Mr. Mitchell said. 3 / 5

4 Western Fair has evolved into much more than just a gaming operation in the past ten years: the facility now hosts trade and consumer shows and a major annual fair, and boasts farmers market, four-pad arena complex, in addition to harnessing racing and slot machines. Mr. Mitchell attributes much of Western Fair s recent growth to a private-public partnership with the OLG, which began in 1999 and saw slots introduced at their facility. The revenue from the slots program allowed them to reinvest in the facility and programs at a level, he says, his organization has never seen before. Many small businesses in the area have benefited from Western Fair s growth, as well. When we had done an independent economic impact study a few years back, we learned that the trickle-down economic impact of all of our activities at Western Fair is $115-million annually, Mr. Mitchell said. The gaming industry s slower pace of growth has also forced small companies, like Accro, to change their approach. They have shifted from primarily creating custom seating for new facilities, to refurbishing and servicing existing facilities. The hospitality industry, the entertainment industry, relies on ideas to attract customers, and so even restaurants, hotels, convention centres and so on, the facilities get tired, and if they want to attract new customers, they will refurbish, update and give themselves new interiors, new seating, Mr. Clark explained. And they have some new competition from the States to contend with, as well. There are a dozen major players south of the border that normally didn t bother with the Canadian business because its smaller scale, and they usually had a pricing disadvantages, but with the dollar in Canada s favour... the Americans can be quite competitive up here, says Mr. Burns. 4 / 5

5 But he s confident that the gaming industry will continue to grow as the economy strengthens and the pace of technological innovation picks up. The gaming industry was never considered leading edge in technology, and that s because everything has to be tested and approved for its integrity, so you want to make sure it works before you put it out there for the customer, in essence. 5 / 5