Casino, lottery and video lottery revenues seem to be surviving reasonably well in Quebec

Casino de Charlevoix


Quebec, unlike some other parts of Canada, is holding its own against the blows of the global recession, which has a lot to do with the strength of its knowledge-based industries and its commodities exports. Besides, urban Quebecers share a deep-rooted sense of joie de vivre that depends on spending money, not lavishly, but freely. And if it takes an evening out for dinner, some entertainment and gaming at a casino to make them feel good, that’s what they do.

Bottom line, it’s easier these days to get seated in the better Montreal restaurants. And though more shops have their windows papered over, casino, lottery and video lottery revenues seem to be surviving reasonably well.

That doesn’t mean the province hasn’t been bruised by the downturn. The last annual provincial budget predicted a fiscal deficit for the first time in seven years, with forecasts of more of them to come over the next five years. In the 12 months that ended March 31, revenues from all forms of gambling were roughly flat year over year at C$3.87 billion and considerably off their 2006 peak of $4.02 billion. The province’s casinos - Casino de Montreal, Casino de Charlevoix and Casino du Lac-Leamy - accounted for 22.5 percent of the 2009 total. Revenues at the three were up 2.3 percent to C$915.4 million. Slots and table games generated about 89 percent of that, and visitors from outside the province accounted for more than 16 percent of total win. But American visitation is noticeably down, a sign that hard-pressed U.S. consumers are opting for closer-to-home casinos in the U.S. border states, and this is presenting “enormous competition” for Quebec casinos, says Jean-Pierre Roy, a spokesman for Loto-Québec, the public corporation that governs all gambling in the province.

But Loto-Québec and its operating subsidiary Société des casinos du Québec believe in the potential. The gambling offering was expanded last year to include Texas Hold ’em poker. June saw the opening of a fourth casino, the $66.5 million Casino de Mont-Tremblant. And the province has committed to a $305.7 million remodeling of its flagship Casino de Montreal, which commences this year and is considered vital to the property’s ability to compete against the Northeast U.S. markets. Casino de Montreal, the largest in Quebec with more than 3,000 slots and 120 table games, generated $595.6 million in turnover in 2008-09, a 2.1 percent increase. During the four-year renovation period, an overall decline of $34 million in revenue is expected. But when the work is completed revenue is expected to increase by $60 million annually.

Casino de Mont-Tremblant opened in June with plans to leverage a prime location in one of Canada’s most popular ski resorts.

Casino de Mont-Tremblant, about a two-hour’s drive north of Montreal, is located in the most popular skiing and winter sports resort in eastern Canada, an area with the drawing power of Aspen or Vail. Prior to the full impact of the global downturn it was projected that the casino would attract 700,000 visitors a year and generate annual revenues of $50 million. It is a destination-scale property geared to a convention and vacation clientele in a region dotted with upscale condos, hotels, entertainment and shopping, and there is golfing as well in the warm weather months. A new airport accommodates charter flights and private jets. The property features 400 slot machines, 25 table games and five Texas Hold ’em tables. There are also two private lounges, a 125-seat bar and plenty of food and beverage offerings.

Meanwhile, Casino du Lac-Leamy in Hull, within sight of the federal Parliament buildings in Ottawa, Ontario, and Casino du Charlevoix in eastern Quebec are doing reasonably well. No surprise. Both are located in superb settings - one a short drive from the nation’s capital, the other in a remote and unspoiled wilderness overlooking the St. Lawrence River.

Casino du Lac-Leamy trades on its proximity to the national capital in Ottawa.

Casino du Lac-Leamy, the first of Quebec’s casinos built from the ground up, occupies an old quarry near Lake Leamy. It opened in March 1996 after a $210 million expansion and renovation of the original Casino Hull on the site. It features 60 gaming tables, more than 1,900 slot machines and 12 Texas Hold ‘em tables. In 2001 a 350-room Hilton Lac-Leamy, a convention center and theater were added. Total revenues in 2008-09 were up 2.4 percent to C$267 million.

Casino de Charlevoix opened in June 1994 at what was previously a summer theater and a hotel, Manoir Richelieu, on Pointe-au-Pic, high above the St. Lawrence River. It was upgraded four years later in partnership with Canadian Pacific Railway and Solidarity Fund QFL when they acquired the property from Fairmont Le Manoir Richelieu and brought it to its present state. Though the smallest Quebec casino (20 gaming tables, 850 slot machines and five poker tables) it offers beautiful views of the densely forested cliffs and the broad river below. Turnover was up a healthy 3.9 percent last year to C$52.8 million.

A $305 million facelift is expected to boost turnover at Casino de Montreal by $60 million a year.

‘IT IS TIME'

Yet, Loto-Québec hasn’t always come out rolling sevens and 11’s. Four years ago the company proposed developing an entirely new Casino du Montreal at a projected cost of C$1.2 billion, the goal being to attract some 6 million visitors a year and at the same time save the $5 million to $10 million a year required to try to keep the old facility fresh.

The existing casino dates back to 1996 and is located in what had been the French and Quebec pavilions built for Expo 67. The new casino would have added a hotel, a cabaret and a Cirque du Soleil-themed theater complex to a prime waterfront location in the historic Old City - Montreal’s most popular tourist destination - and where Cirque du Soleil was born and where it still maintains its headquarters.

“It was not to be,” says Roy. The plan was killed off by a toxic blend of political hesitancy and a consultant’s lukewarm opinion, and in the end by government-foot dragging. Provincial authorities insisted on taking 18 months to make up their minds. Cirque du Soleil couldn’t or wouldn’t wait that long.

Roy says the project “would have made [Casino de Montreal] a competitive place for at least the next decade” (or much longer, given Cirque’s international popularity). Moreover, the federal port authority was prepared to sell its 70 percent share of the intended site to Loto-Québec, which owns the other 30 percent, so there wouldn’t have been any prolonged haggling over price or thorny zoning issues to resolve. Needless to say, Loto-Québec was “bitterly disappointed,” says Roy, to lose an opportunity to develop what would have been one of Canada’s most glamorous casino destinations.

But the corporation is determined to move forward and focus on remaking the existing venue, consoling itself with the fact that at least it has 13 years of familiarity going for it, which should continue to prove a draw for Canadian and U.S. visitors who like its gaming mix and glitz.

The renovation is designed to solve a “number of problems we’ve tried to live with,” says Roy. One of the biggest is that the casino is spread over nine different floors with restaurants and kitchens scattered throughout. “We’re going to simplify access to gaming by locating various types of games in clusters,” he says. “We’ll also improve parking, create more space around the tables and slots, replace three separate entrances with a more inviting and efficient single central atrium entrance and also make it easier to monitor guests for underage and self-excluded gamblers.”

The game mix will remain unchanged, but the high-limit rooms will be enlarged. (The demand is there, even in a recession.)

Loto-Québec President and CEO Alain Cousineau has said the authority is encouraged by the “very high number of casinos in the Northeastern United States and in Canada, with many having undergone recent major facelifts.”

“The general trend is for casinos to be upgraded every 10 years, more or less,” he said. “Fifteen years after it first opened, and with more than 90 million visits logged, it is time for the Casino de Montreal to follow suit.”