RE:RE:Public Enquiry B.C. I am not sure if the analysis or time spent on typing this up or going through the numbers is worth it or not. But the panic seems to quite widespread and a sudden drop in share price does do that especially if you are not sure why you bought the stock (or even if you had a pretty good idea - you may start to question your thesis). I have a fair bit of money in GC and have done my research and have been following the company since 2009. Maybe the following helps to show some of the folks how the media and shorters can shake the weak hands and make profits irrespective of the company doing good or not.
Sorry to hear about the loss dazedandconfused73 especially as you are retired. Good luck and best wishes to you for the retired years ahead.
I am one of those lucky (not) investors who bought into Amazon in 1998 and sold in 2007 (around $42 or so) with a 40% loss after a 9 year hold (and no dividend of course). If I had held another 12 years that would be worth a lot of money :-(
>>> I sincerely hope management is NOT a bunch of crooks as you stated. Numbers have been good up to now but has that been due to fraud and money laundering. <<<
Management is not a bunch of crooks. They are good at what they do. With regards to the money laundering issues in BC - they followed the rules in place. If the rules that are set in place by the regulators are not good enough - upto the regulators to change the rules. It is not the casino's job and place to change the rules or do anything extra other than follow the rules in place. There will be growing pains as there is plenty of execution risk - but if GC and Brookfield cannot pull this one then probably no one can.
There seems to be a lot of importance placed by BNN and Bloomberg article on the 12.4% drop in table games revenue in BC hurting the profit of GC. The host on BNN took great pains to mention this and the carefully worded article from Bloomberg also puts the blame squarely on the table drop as per the headline of the article.
Let us look at that in detail. Also you can notice (or not) how the media cleverly focusses on table drop but not the table hold. The table drop in 2019 Q1 was 12.4% lower ($282.8M) vs 2018 Q1 ($322.9M). Of course the whales were playing bacarrat which has one of the lowest house edge. So most of the loss of table hold is in a game which has the lowest hold % in the casino and the remainder of the table drop has stayed constant at games with higher casino hold %. You can see the change in table hold % through the years (page 15 - 2019 Q1 - MD&A) from Q1 2017 (~ 14%) to Q1 2018 (17%) to Q1 2019 (19%).
As a result of less bacarrat played in BC - the table hold % has gone up and if you compare the actual revenue (table hold) for table games from BC - it was $55M in Q1 2018 and was $53.8M in Q1 2019 for a drop of $1.2M OR 2.1% drop in actual revenue to GC - Quarter (2019) over Quarter (2018)
Looking at Q1 since we know the Q1 numbers for 2017, 2018 and 2019.
In 2017 (Q1) - The table hold towards GGR in Q1 in BC was $64.2 Million and Slot Win was 136.8 million. Total revenue for BC for gaming (GC share) was $65.4M. So table games contributed 31.94% towards BC revenue (approx $20.88 M)
BC contributed 60.22% ($65.4 M) of the total GC gaming revenue ($108.6 M) for 2017 Q1 out of which approximately. So for the company as a whole - BC tables contributed around 19.22% of the total GC revenue for Q1 2017.
In 2018 (Q1) - The new rules from BCLC for the high rollers took effect on Jan 1, 2018 and GTA bundle was included for 68 days (table revenue for GTA bundle only from Blue Heron).
The table hold towards GGR in Q1 in BC was $55.0 Million and Slot Win was 145.3 million. Total revenue for BC for gaming (GC share) was $65.7M. So table games contributed 27.45% towards BC revenue (approx $18.03 M)
BC contributed 43.73% ($65.7 M) of the total GC gaming revenue ($150.22 M) for 2018 Q1. So for the company as a whole - BC tables contributed around 12.00% of the total GC revenue for Q1 2018.
In 2019 (Q1) - The new rules from BCLC for the high rollers have been in effect for a year. The GTA and GTA West bundles are included and table games have been at the GTA bundle since September. GTA West came in on May 1 and Brantford had some tables. Mohawk and Flamboro just started late December with no market as per CC (expenses of course for the added dealers).
The table hold towards GGR in Q1 in BC was $53.8 Million and Slot Win was 148.3 million. Total revenue for BC for gaming (GC share) was $66.5M. So table games contributed 26.62% towards BC revenue (approx $17.70 M)
BC contributed 34.17% ($66.5 M) of the total GC gaming revenue ($194.60 M) for 2019 Q1. So for the company as a whole - BC tables contributed around 9.09% of the total GC revenue for Q1 2019.
** for the curious ones - regarding the math in ON - GC does not break down the revenues as per the different bundles so some assumptions have been made where the East bundle has same revenue in Q1 2018 as Q1 2017 and slightly higher in Q1 2019 (even though two new build casinos have come in at Beleville and Peterborough). I have also taken a flat 50% of GC share for remainder of the revenue - GC share may be higher because they get 55% from GTA West and 49% from GTA bundle - but 50% average should work).
*** Also note that the revenue in 2019 Q1 in ON was reduced due to the extreme weather. In reality - If the reliance on BC table drop is even more diminished than the numbers above.
The trend is pretty clear that the revenue from table games in BC account for a much smaller portion of total revenue than before and their % share will decline in the future as table games open up at the different casino's in Ontario. This is not to say that BC does not count at all but the fact remains that if BC table hold is lower by 2.1% (Q1 2019 vs Q1 2018) and it represents around 10% of the total revenue in Q1 2019 - the negative impact to GC will be around 0.2 - 0.3% on total revenue. Hardly worthy of a 30% drop.
In the end the same thing will happen in GTA and GTA West bundles that happened in the GTA East Bundle where the outstanding loans will be paid off through internal cash generated. Once the debt is paid off - either GC will start a dividend (due to tremendous cash flow) or get bought out or taken private.
GLTA
dazedconfused73 wrote: I'm so disappointed in this stock - I've only had it since the last breakout at $55 - fortunately I only paid $50 so could have been worse. However @ 1000 shares I lost a lot as I hung in there until today. I'm retired and am not all that well off, and take full responsibility for my actions - that's the stock market. I sincerely hope management is NOT a bunch of crooks as you stated. Numbers have been good up to now but has that been due to fraud and money laundering. Who knows. I'm relieved to be out but I hope this company regains it's good standing over time. Just for the record, I am one of those that goes to the casino with $100 once in a while - Victoria, BC. When buying this stock I felt safe going with the "house". Just didn't work out.
dazedconfused73 wrote: I'm so disappointed in this stock - I've only had it since the last breakout at $55 - fortunately I only paid $50 so could have been worse. However @ 1000 shares I lost a lot as I hung in there until today. I'm retired and am not all that well off, and take full responsibility for my actions - that's the stock market. I sincerely hope management is NOT a bunch of crooks as you stated. Numbers have been good up to now but has that been due to fraud and money laundering. Who knows. I'm relieved to be out but I hope this company regains it's good standing over time. Just for the record, I am one of those that goes to the casino with $100 once in a while - Victoria, BC. When buying this stock I felt safe going with the "house". Just didn't work out.