By Tom Nightingale

For the Saskatchewan Indian Gaming Authority (SIGA), the challenges posed by the COVID-19 pandemic have hit a little differently than for most operators and regulators.

That’s because SIGA is not like most of its industry peers. The authority operates numerous gaming entertainment destinations in Saskatchewan, with the latest, Gold Horse casino, having opened in Lloydminster in 2018.  Rooted in First Nations history since its founding in the early 1990s, SIGA has grown to seven casinos and 2,000 employees over a quarter of a century. Today, those casinos generate more than $250 million in revenue and $80 million in net income annually.

But for SIGA, “sharing the wealth” is more than just an idiom. To say they pay it forward would be an understatement.

SIGA operates as a non-profit corporation under Saskatchewan law, meaning that 100 per cent of its profits go to the province’s First Nations and community development. 50 per cent goes to the First Nations Trust, which aims to support economic and social development, justice, health, education, recreation, culture, and other First Nations initiatives in the province. The Trust is administered by an independent board and monitored by the provincial Ministry of Government Relations. The other half is split evenly between the provincial government’s General Revenue Fund, which helps to finance initiatives supporting social and economic objectives such as health, education, and infrastructure, and Community Development Corporations (CDCs). Those CDCs fund charitable initiatives in communities where SIGA casinos are located and are run by independent boards in each community comprised of Tribal Council and local community representatives.

That profit-sharing model goes a long way, too; by October 2017, estimates were that SIGA has contributed in excess of $1 billion to the provincial economy. SIGA CEO Zane Hansen described the corporation’s operations as being built upon solid business principles but come year-end, “a non-profit in the truest sense of the word.”

Navigating spring closures

Saskatchewan has been an interesting case study when it comes to how provincial gaming industries have responded to the progression of the COVID-19 pandemic. Along with SaskGaming’s Casino Regina and Casino Moose Jaw, SIGA’s seven properties were forced to close down back in March as the full extent of the pandemic became apparent. It was truly unknown territory.

“From a company perspective, we were thankful that we had solidified our business/emergency continuity planning and we were able to quickly respond and evolve our business for the unprecedented situation,” Hansen recently told CGB. “During reopening, we took a very fluid and dynamic approach to the controls, processes, and offerings that SIGA can present, both on the floor and with back-of-house and central office processes.”

When the casinos opened again in July, the state of play at SIGA reflected that at other casinos around the province and the country. Limited slots and live games were on offer, capacity limits were in place, masks were mandated, and shows and events could no longer be offered. Hansen notes SIGA has adapted well, averaging around 80% of its normal slot machine volumes in November, but that it anticipates things “tightening up” heading into the winter months. Up to this point, the corporation has withstood the effects well.

Hansen acknowledges a strong base of loyal customers and the reduced alternative options for entertainment as factors in maintaining that level. “Players also seem to be staying playing longer average times with a game, perhaps because there are fewer playing spots available with our reduced capacity regulations.”

Pivoting service

The pandemic has accelerated certain trends across Canada’s gaming industry and one of those has been an uptick in Electronic Table Games play. That has been seen at SIGA’s properties, too, and Hansen calls the transition to increased ETG play “a positive move.” There are lessons to be learned not just now but moving forward beyond COVID-19. “Certainly, a situation like this makes one revisit how one can leverage technology to support business continuity,” notes the CEO.

The pandemic has also exposed the importance of not having a presence in online gaming, which has yet to be approved in Saskatchewan. SIGA has repeatedly stated the need for the province to modernize its gaming delivery channels. Saskatchewan is one of the last provinces to not have a regional iGaming site. With tangible progress to being made in Ontario and other provincial operators enjoying a spike in online casino traffic during land-based closures, Hansen highlights movement in the iGaming field as an aim moving forward.

Already, though, other steps forward are being taken. Hansen explains how the pandemic has helped SIGA to learn how to optimize capital and better manage overall expenses. “By throwing out the established book and re-inventing processes and controls, we managed to create a much leaner and efficient operational model,” he says. “As a collective, we’ve learned that even stronger teamwork across the organization was essential to navigate through COVID-19.”

RELATED: Resiliency and Progress the Name of the Game for SaskGaming

The impacts of a second shutdown

The primary concern of the spring shutdown, Hansen stresses, was the human dilemma of having to reduce the size of SIGA’s workforce due to the initial lockdown and then having to respond with diminished resources upon reopening. That had a profound effect on SIGA’s charitable operations. Casinos were ordered to close on March 16 and remained out of action until July 9; that was a long four months and hit SIGA and its First Nations affiliates hard, says Hansen.

“As a result of the shutdown, First Nations communities already had experienced a significant financial loss,” Hansen explains. It’s worth mentioning here that 65 per cent of SIGA’s employees are of a First Nations descent. That only intensifies the pain felt by tough decisions that have needed to be made, such as the one at the end of August which saw 550 positions permanently eliminated at SIGA as the company underwent restructuring to better survive the pandemic. Hansen notes the company is thankful it was able to take advantage of the federal wage subsidy program to help offset some payroll costs and support employees who were placed on leave during times of disruption.

SIGA had braced well for the continued impact of the pandemic. However, as has been the way in areas of Canada throughout the pandemic, things have changed drastically again in recent days. On Monday, December 14, Saskatchewan announced all casinos and gaming centres must close from December 19 until January 15 at the earliest.

Hansen emphasizes that policy makers do not understand how safe and clean casino properties actually are, and he laments that these new closures will result not only in further financial loss for the company but “a disproportionately negative impact” on provincial First Nations communities. A previous public health order which required SIGA to limit casino capacity to 30 patrons per site meant placing 500 employees on leave; the latest will extend that to another 400-plus employees. “This public health order coming one week before Christmas will only make putting these employees on leave that much more difficult,” Hansen says.

Moving forward through troubled waters

In all, while SIGA is immensely proud of its First Nations and charitable links, Hansen notes that the pandemic has certainly exposed the flaws in the system. “Our current gaming framework agreement is a positive relationship, but it does reflect a vulnerability to the organization in that 100% of the net income is distributed,” he continues. “This leaves little opportunity for reinvestment without borrowing, and certainly creates a cashflow crisis without cooperation to adjust distribution terms in times like these.”

Hansen estimates it will take two years to get back to anything resembling normal pre-pandemic levels of business. He expects to see necessitated restricted operations until a vaccine is widely implemented. Thankfully, progress is finally being made on that front. As for how to progress, the CEO suggests that there are pockets of opportunity for development and First Nation gaming has clearly demonstrated it is in the best position to deliver on these opportunities.

By Tom Nightingale

There are stories to be told all over Canada when it comes to gaming in 2020. In Saskatchewan, there’s been a clear focus when it comes to casinos and gaming. The province has looked to position itself so that the industry – and public health – remains resilient to the virus while ensuring that things don’t slow to a standstill.

In part one of a two-part focus on gaming in Saskatchewan in 2020, Canadian Gaming Business spoke to SaskGaming, the provincial government-owned and Saskatchewan Liquor and Gaming Authority-regulated corporation that owns Casino Regina and Casino Moose Jaw.

For the corporation, it’s been a case of pressing on safely and securely through difficult waters. The pace with which the industry has had to adapt has been remarkable.

“You can spend years planning for this type of crisis situation, but even the best planning doesn’t prepare you for how quickly you need to respond and evolve,” SaskGaming President and CEO Susan Flett tells CGB. “If you had told us in January that we’d be forced to close our doors for nearly four months, I would have told you you’re crazy! But that was our reality and it’s something in our nearly 25 years of operation we’ve never had to do.”

Difficult Decisions

It certainly hasn’t been easy. In the best interest of their local communities and the province on the whole, Casinos Regina and Moose Jaw were closed just two weeks before the 2019-20 fiscal year ended at the start of April. In that short period alone, SaskGaming believes it lost between $5.2 million and $5.8 million due to the closures. Overall, the estimated loss of revenues for the two casinos was $30 million, by a late-October estimate.

There were personnel impacts, too, with nearly 600 workers laid off at the start of April in what Flett calls one of many “difficult decisions that no employer likes to make.” SaskGaming looked out for its employers as best it could, says Flett. She notes that the company continued to pay all employees for two weeks following the shutdowns and continued full benefits coverage for all temporarily laid-off workers. The temporary nature of many of the layoffs also meant that workers could return when the properties reopened but could access critical supports like EI and the CERB in the meantime. Ultimately, about 250 of those workers were able to be brought back for the initial reopening, and 35 more returned as table games reopened in October.

Shutting the casinos also had a wider social impact. SaskGaming’s revenue goes towards supporting the province’s General Revenue Fund which helps, among other groups, Saskatchewan’s First Nations and Métis communities. The loss of that revenue stream was by no means a loss felt only by the company itself.

A Safe Reopening

Casinos Regina and Moose Jaw both reopened in early July for the first time since mid-March 16 with the kind of stringent health and safety procedures that have been seen in reopened casinos across Canada, as per the Reopen Saskatchewan plan. Those include capacity and service limits, screenings, social distancing measures, increased sanitization and cleaning (particularly regarding high-touch surfaces), Plexiglas barriers, and mandatory masks.

Through careful management and all due consideration from operators, regulators, public health, and the Saskatchewan population, they have been able to stay open ever since. Table games restarted with limited capacities in early October but, in order to limit the risk of the virus spreading, all bets are placed by dealers after receiving verbal commands or hand signals. Guests cannot handle cards or chips, no food or beverages are allowed at tables, and spectators may not congregate at the tables.

The 24-hour weekend operations that had been introduced last year had to be scrapped to allow for ample time to clean thoroughly and fully each night. Earlier this month, too, alcohol service was halted after 10 p.m. at both casinos in compliance with Saskatchewan’s curfew on alcohol sales. That will last until at least mid-December.

With every cloud, though, comes a silver lining. A quirk of timing meant that renovations on Casino Regina that were already underway were able to continue during the temporary closure. As Flett notes, this allowed SaskGaming to contribute to supporting the local construction industry and related trades during the shutdown. Refurbishment of the on-site restaurant at Casino Regina was completed just as the pandemic hit, but capacity limits and health concerns mean it won’t be reopened for business until January 2021 at the earliest. Meanwhile, the Casino Regina Show Lounge is not expected to reopen until at least April.

Establishing a New Normal

SaskGaming’s properties may have been able to reopen relatively swiftly and remain in operation, a better scenario than has been seen in some other provinces, but it’s very much not business as usual. The current setup has slot machines limited to every third machine, table games restricted to three players, and Plexiglas barriers all over the floors. To help stay vigilant and continue to foster consumer confidence, too, guests can request their slot machine, touch-bet terminal, or table game to be cleaned on-demand.

“From our perspective, the last six months has been about adapting to the constant change that has been brought on by COVID-19,” says Flett, noting that the company has been determined to be proactive instead of reactive in pivoting its service and operations. Saskatchewan, like most of Canada, is getting deep into the expected second wave of COVID-19 this fall. It remains near-impossible to predict exactly how things will pan out for the remainder of the year and beyond. But come what may, SaskGaming is vowing to be ready to act in the best possible manner to whatever lies on the road ahead.

Certainly, being based in Saskatchewan rather than, say, the hustle and bustle of Southern Ontario’s Golden Horseshoe has some advantages. Flett acknowledges the province has performed quite well throughout the pandemic, and currently has the lowest unemployment rate in Canada. Measures have been brought in to help away from casinos, too, such as increasing VLT commissions paid to bars and restaurants for the remainder of 2020.

On the flip side, though, is that Saskatchewan, unlike Ontario and other provinces, has no electronic gaming portfolio to offer as an immediate alternative to casino gambling. “It’s clear that those provinces with online gambling channels have been better positioned to weather this pandemic because their land-based players have been able to pivot and take their play online,” Flett says. She hopes there will be provincial progress on that front in the near future, noting a spike in demand for electronic gaming in the midst of the pandemic. In the meantime, Casinos Regina and Moose Jaw’s electronic table games have seen year-over-year increases and the demand for touch-bet terminals also keeps climbing.

Putting Their Best Foot Forward

Discretionary spending, as one would expect, remains down amid economic uncertainty. SaskGaming’s casinos saw great turnout when they reopened – both Regina and Moose Jaw maxed out their lowered capacities within hours of reopening in July – but overall revenue and visitation is understandably lower than the same period in 2019-20.

Overall, though, Flett has been heartened by the response from SaskGaming’s core of patrons, saying that it was “amazing to see their loyalty.” She also emphasizes that navigating a crisis brought out “the absolute best” in SaskGaming and the casinos’ employees.

Moving forward, she is cautiously optimistic of being able to continue the company’s priorities of modernization and continued financial sustainability, as well as supporting local industries. Flett notes that as gaming revenues continue to increase again, the corporation will further support local non-profit and charitable organizations in their communities and help to stimulate Saskatchewan’s economy on the path to recovery.

It’s a long road and tough terrain the industry is walking right now, but SaskGaming seems to be finding the right path, and better times are on the horizon.