Edgewater Casino losing $150,000 a week

Court documents show the owners of Vancouver's Edgewater Casino tried to sell off their bleeding operation to their biggest rivals, as well as Whitecaps owner Greg Kerfoot, who wants to build a new soccer stadium downtown.

A Las Vegas company that specializes in First Nations partnership casinos has inked an initial agreement to take over Vancouver’s struggling Edgewater Casino. Paragon Gaming hopes to have the deal wrapped up by the end of the summer, according to its VP of operations, Yale Rowe.

Edgewater has struggled since its launch last February, averaging operating losses of more than $150,000 a week, according to court documents.

They reveal owners Len Libin and Gary Jackson tried to sell off the struggling operation last year to its biggest rival – Great Canadian Gaming Corporation - as well as the reclusive owner of soccer's Whitecaps.

Libin and Jackson knew the casino needed help “shortly after opening day”. They had a tentative agreement with rivals Great Canadian, owners of Richmond’s successful River Rock Casino Resort. The deal would have been enough to pay off Edgewater’s debts, plus provide “several million dollars” to the casino’s shareholders, along with deferred payments kicking in a further $50 million.

But Great Canadian backed out at the last minute after seven months of negotiations, the documents claim, which was “financially devastating” for Edgewater and its creditors.

We've obviously put a lot of thought process into what we would do differently

After the deal collapsed, Greg Kerfoot, the media-shy owner of the Vancouver Whitecaps, entered into negotiations to buy part of Edgewater, taking on a chunk of the casino’s debts as part of an initial agreement.

But that deal too fell through and last month Kerfoot demanded his share of Edgewater’s debts be repaid – some $17.5 million.

The deadline was Tuesday evening, but a B.C. Supreme Court Justice granted Edgewater temporary relief from its creditors, allowing the casino to continue operations for now.

Up until now, Libin and Jackson funded the casino's day-to-day losses with loans through their affiliated companies. Since its opening last February until March 31, 2006, Edgewater Casino has tallied a net loss of $12.9 million, according to the company's unaudited statement of operations and deficit.

The disappointing numbers even had an impact on pocketbooks at the City of Vancouver, which sees a portion of the casino's revenues. At one point last summer, city financial staff were warning council they would have to dip into contingency funds to make up for a $1.5 million shortfall in revenue projections.

Libin and Jackson have been unavailable for comment this week, but insufficient parking, signage concerns, and the lack of a liquor license on the gaming floor have been cited for Edgewater's lethargic performance to date.

It's likely many gamblers have instead headed to Great Canadian's splashy River Rock in Richmond, which has more than doubled that municipality’s share of the local gaming market in two years, according to the B.C. Lottery Corporation.

Paragon's Yale Rowe said his company was obviously aware of Edgewater's problems, but would not speculate on how Paragon could turn the casino around.

"There's not a lot of detail I can share with you yet. We've obviously put a lot of thought process into what we would do differently," Rowe said.

Calls to Greg Kerfoot’s office were not returned by press time.

Great Canadian’s VP of media and entertainment, Howard Blank, declined comment.

Related posts:
Cities take a gamble on casino earnings
Casino profits plunge again

Tags: vancouver, casinos, gambling, slot machines, edgewater, great canadian, paragon gaming, whitecaps, greg kerfoot