Casino | AGLC

I wanted to share with the group some due diligence and speculation I have done around Gamehost (TSX: GH). I want to start by saying that this is not a situation where you urgently need to buy this right now and ride up a wave, there will be no rocket ships on this post and I strongly encourage you to perform your own due diligence and see if you want to buy this stock. This is an extremely low volume stock and if you rush to buy it, the price will go up far past the supply of sellers. I do not intend to pump this but only to get critique.
Gamehost is an owner and operator of 3 casinos located in Alberta, 2 hotels in Grande Prairie and a retail store rented to a liquor store near one of the casinos. The 3 casinos are: Boomtown Casino in Fort McMurray, The Great Northern Casino in Grande Prairie and the Deerfoot Inn and Casino in Calgary which they own 91% of currently.
As you probably guessed by these locations, the casinos are cyclical and make a lot of money when oil prices are up and go through downturns when prices are low and projects stop. All 3 casinos are not destination type casinos like you would find in Las Vegas where people come from all around to visit, but are very reliant on their local communities. The Boomtown Casino is the only casino in Fort McMurray and the Great Northern Casino is the only proper casino in Grande Prairie with a much smaller limited one in town. The Deerfoot Inn and Casino is 1 of 7 (yes, 7!) casinos in the Calgary area. It primarily focuses on the Southeastern portion of the city and the surrounding suburbs and still serves a market of about 200,000 people in just that area. All 3 casinos are also very focused on live events and have become gathering points for live events and nights out for their communities.
Although all 3 casinos have been affected by oil downturns all 3 communities they serve have much higher median income than the country as a whole. The casinos have remained profitable throughout the entirety of the oil downturn and despite a dividend cut in 2016 they have still paid a consistently strong dividend until the COVID-19 pandemic (more on this later). Grande Prairie’s economy is more focused on natural gas extraction which has been consistently profitable. Calgary as a major city does have a diversified economy as well which leaves just Fort McMurray to be the lone straggler in dealing with oil prices. No new casinos have been built in Alberta since 2006, which has left people still coming to the doors of the casinos regardless of the economy. All three cities have seen consistent population growth greater than 10% from 2016 according to Statistics Canada’s estimates which is far greater than the national average. People are still coming to these cities and are still making a fairly high wage compared to the average Canadian.
The second thing that has likely come to your mind is why casinos when they have been shut down during the pandemic? As the vaccine is currently being implemented the orders will not last forever. When the casinos have been opened even with reduced services, they have remained profitable and the management has responded by using the pandemic as an opportunity. They have been consistently buying back thousands of shares every day and cancelling them. If you look at their SEDAR profile you can see that they have not missed a single day to cancel at least 2,000 shares per day. Since the company had 24.5 million shares issued, they have bought back about 1-2% of the float so far which has made the stock even harder to buy on the open markets due to the lack of volume. They have also been approved to expand the operations of the Deerfoot Inn and Casino which should be completed by the summer. The insiders have followed by accumulating many shares in their personal accounts over this period of weakness.
In the third quarter of 2020 the company posted EPS of 12 cents per share down from 16 cents a year ago. Revenue was down to $4.9 million from $6.7 million. This is with severe restrictions and limitations on the amount of people that can come in the casino and what they can do. All live events were cancelled, table games were restricted and yet the company was still making enough money to buy back significant shares and improve their existing assets. The management has essentially channelled the dividend into making the number of shares decrease in a time of strong price weakness.
There is interest in this space since the largest casino operator in the country Great Canadian Gaming was acquired recently for almost double what they were trading for in the spring. Private equity firms have been looking into casinos as a post-recovery play. Unlike companies in airlines or movie theatres, these do not have significant issues staying profitable during intense downturns, they only become less profitable with a sudden surge afterwards.
I am speculatively buying this stock on the idea that as COVID-19 restrictions are gradually lifted there will be an awkward window where people will be back almost to normal within Canada and will have a strong urge to go out and do activities that they have been restricted from doing for months. At the same time they will be unable to travel internationally due to different countries having different vaccination schedules, planes still operating at reduced capacity with many airlines being in trouble and governments being reluctant to remove limitations abroad. This will significantly bring business to casinos and other live event focused businesses within Canada. I anticipate that in the 12 months past restrictions being lifted that the business will see a significant bump in EPS. They will reinstate the dividend and the share price will grow significantly. My personal price target is $12 per share but I could see it being anywhere from $10-$15 per share. This is without oil prices budging at all.
In the long-term the price will be cyclical based on oil prices unless they start diversifying geographically. It is extremely difficult to get a licence to open a casino, which leaves the company with the only option of acquiring other casinos. This is a possibility down the road but something I will look more into once I see a significant bump in EPS due to increased demand.
I do believe that in the current market with the price having barely recovered from the March lows, that the stock is a very good contrarian play in the 12-24 month range. Holding after that could potentially be risky depending on your own views on how the oil industry will play out and if the management has what it takes to diversify. Online gambling is an even longer term threat but since these casinos are focused on live events and have become a staple of the communities that they are in, this is not likely to be a threat for some significant time.
Please let me know what you think, feel free to criticize. If you guys like my analysis I could do more on other small or mid cap companies. There have been a few I have kicked myself over missing.

Great Canadian Gaming (T.GC) has 25 gaming, entertainment and hospitality facilities in Ontario, B.C. and Atlantic regions of Canada.
Over 95% of the revenue & EBITDA comes from BC & Ontario, of which each province has signaled that casino's will be among the last things to open in their provinces. There is NO prospective reopen date!
Heading into this weekend Great Canadian shares are off just 30% YTD without a dollar of revenue for almost 4 months and no visibility on when revenue or profitability will return.
In comparison, Gamehost Inc (T.GH), which operates casinos in Alberta that are open is also off 30% YTD. MGM Resorts (MGM), which also has its casinos open is off 42% YTD and Las Vegas Sands (LVS) which also has its casinos open is down 30% YTD.
Additionally, when the Casinos can reopen, one can expect very stringent rules that reduce revenues and increase costs, such as when Atlantic City Casinos reopened this weekend. Rules, are likely to include temperature checks on entering, mandatory wearing of masks, half capacity at table games, no smoking, drinking, or eating while inside the casinos and a cap on overall capacity of 50% occupancy.
This feels like a solid candidate to short sell over a medium time horizon. Any opinions from the community?

I've volunteered to build a PC for our community association office ( which only has one computer used by one administration lady). It doesn't need to be a super fast gaming PC, but they want it fast enough that it doesn't feel like it's crawling in 6 years (they don't have a lot of money and won't be able to replace this one for quite a while). The system they have now is absolutely ancient and will be heading for the recycle centre when I get the new system, so the user (who is an elderly lady) will probably be super impressed with whatever I give her, but I want to build something that will outlast her. :-) The problem is that I haven't built my own PC in about 6 years and really haven't kept up with the changes that have been happening with CPU/MB/etc, so when I was trying to piece together a system, I kind of felt like I've been out of the loop too long, so I thought I would pass my selections by you guys first for some feedback. Here is the list I've put together so far: https://pcpartpicker.com/list/JPkzyk I've essentially just picked the cheapest parts from each category that has the best reviews.

1. ⁠What will you be doing with this PC? Be as specific as possible, and include specific games or programs you will be using. Basically, this will just be a system for spreadsheets, burning DVDs for archiving, and browsing websites, so don't need a lot of horsepower, but I need it to be quite versatile when it comes to upgrading it in the future if it feels like it's running slow, rather than replacing it. Maybe some graphics or video editing, but that would probably be the most demanding.
2. What is your maximum budget before rebates/shipping/taxes? Like I mentioned, this is a non-profit with not a lot of money, but we ran a casino night a while ago which garnered us some funds and would like to replace the office PC as it's getting so slow that nobody can use it (I'm talking "click to open a program and get a coffee" slow). They've told me to try to keep it around $800 (that's Canadian BTW, so that works out to about $600 US) with a monitor. I might be able to find a used, cheaper monitor on Kijiji, but the rest I'd like to buy new.
3. When do you plan on building/buying the PC? Note: beyond a week or two from today means any build you receive will be out of date when you want to buy. There's really no rush, but they'd like to get it within a month or two. They'd like to see an estimate sooner so the bookkeeper knows what to expect.
4. What, exactly, do you need included in the budget? (ToweOS/monitokeyboard/mouse/etc) I can probably find new peripherals on my own for a good price, but for now we basically just need everything in the tower. Maybe a mouse/keyboard combo if anyone knows of a smoking deal?
5. Which country (and state/province) will you be purchasing the parts in? If you're in US, do you have access to a Microcenter location? Alberta, Canada.
6. If reusing any parts (including monitor(s)/keyboard/mouse/etc), what parts will you be reusing? Brands and models are appreciated. Nothing really can be reused. The monitor is so bad that (and VGA) we're going to toss it, and the mouse, keyboard are probably still PS/2.
7. Will you be overclocking? If yes, are you interested in overclocking right away, or down the line? CPU and/or GPU? Nope, don't need it for what she'll be doing. Maybe down the line if the system gets really old and slow.
8. Are there any specific features or items you want/need in the build? (ex: SSD, large amount of storage or a RAID setup, CUDA or OpenCL support, etc) Just an SSD for performance, she doesn't need a lot of storage or RAID or anything excessive. I'm going to try to set up some cloud storage so all of our files are safe and easier to share.
9. Do you have any specific case preferences (Size like ITX/microATX/mid-towefull-tower, styles, colors, window or not, LED lighting, etc), or a particular color theme preference for the components? Full tower for options to upgrade.
10. Do you need a copy of Windows included in the budget? If you do need one included, do you have a preference? Yeah, we will need Windows 10 64 bit.
11. Extra info or particulars: If I could get a MB with onboard video, that would help us reduce the cost so we don't need to buy a video card, but when I was pricing out the parts, a lot of the motherboards say "Depends on the CPU" so I'm not really sure if the MB I chose has onboard video even though it has an HDMI port.

A friend who usually has his facts correct posted this on FB recently. He said that the money generated by casinos for charities is now going to go to the government.
Is there any truth to this? I skimmed the bill for AGLC, charity, or a few other relevant terms with no results. OF course if it's contained in a clause that was deleted, I'd have to read the previous text.
Anyways, just curious.
Edit: An update
As ddogwood points out, this came in bill 20. It says that the Alberta lottery fund revenue will now be dumped into general revenue, rather than being managed separately. This money is a portion of the profits from VLTs, lotteries, and pull tickets. However, it does not appear to include casino (i.e. table game) revenue.
The UCP has said that this is just a way of $13M through efficiency (out of a profit of over $1.2B!) and that they will continue to allocate the money to charities the same as before. That's what they say.

Ok /Calgary, here it is again! Let us know what you are going to be doing this week. Any special events, concerts, or anything at all that you want to add? Need a few guys for a rec hockey team or something? Feel free to post anything at all that you plan on doing. Also don't forget to go through the comments to see if there is anything you want to do that someone else suggests. Also lets not limit this to just Calgary, if you know of something going on in Okotoks, Cochrane, Airdrie, or any surrounding area then let us know!
Oct. 20th - 26th
Music & Shows
Oct. 20 - Dierks Bentley @ the dome. GL getting last minute tickets for this one if you want to go, haha.
Oct. 20 - 25 - Pumphouse Theatre is performing Jack the Ripper Monster of Whitechapel ($25 general, $20 seniors) and Frost/Nixon ($24.15 general, $19.95 student)
Oct. 21 - Rural Alberta Advantage + guests @ Macewan Hall on UofC campus. - $20
Oct. 22 - Boreal Sons with be joined by guests, I Am The Mountain and Walden, for a night of beautiful music and philanthropy. All the profits from the concert will support sending teens to summer camp at Young Life Canada's property, RockRidge Canyon. - Tickets are $15 in advance through Eventbrite or $20 at the door.
Oct. 22 - Chromeo @ Flames Central - $40 on ticketmaster
Oct. 23 - Five Alarm Funk is playing at Dickens. - $14
Oct. 23 - Jeremy Fisher @ Gateway bar on SAIT campus. - $15 ADV on Campus or Sloth / $18.50 ADV Ticketmaster / $25
Oct. 23 - Miranda Sings with Colleen Ballinger @ Macewan Hall on UofC campus - Appears to be sold out, ask around if you want tickets.
Oct. 24 - Jim Jefferies at the Jack Singer Concert Hall. Says $42.50, but I have no idea about ticket availability.
Oct. 24 - 26 -Richards Scarry's Busytown the Musical from Storybook Theatre. One Act Musical - 55 minutes. Ages 3 & Up ($21 adult, $16 child)
Oct 24 - Wakcutt @ TEN Nightclub
Oct 24 & 25 - Cowtown Opera presents Cowtown Cabaret at Festival Hall in Inglewood. 7:30pm. $38 general, $20 students 2 short. Pocket operas "Wrecking Balls" and "The Bachelor", as well as dance, film noir, parkour, and more! Tickets here
Oct 25 - JPod + Wood n Soo @ TEN Nightclub
Oct. 25 - Heartland's Halloween Hootenanny, celebrate halloween with the cast of Heartland. All proceeds going toward Autism Calgary. @ at Hexter’s Rock ‘n Blues Lounge in Bowness. - $20
Oct. 25 - Shenandoah @ Deerfoot Inn & Casino. $39.00 or $ 59.00 for the first 10 rows
Oct. 26 - Boy and Bear @ Gateway bar on SAIT campus. - $20 ADV on Campus/Sloth/Ticketmaster or $25 Doors
Sports
Oct. 21 - Flames vs Lightning @ 7PM. Big home game streak coming up for the flames.
Oct. 23 - Flames vs Hurricanes @ 7PM.
Oct. 25 - Flames vs Capitals @ 8PM.
Oct. 26 - Hitmen vs Prince George Cougars @ 4PM for a Sunday afternoon game.
Other
Oct. 24 & 25 - Scream Fest! at Stampede Grounds. According to the webpage this is an adult focused Halloween festival, but is rated PG13. Scream Fest has always been a good time in the past, I recommend this. $25 at the door, and open every Friday and Saturday night until Nov. 1st
Oct. 25 - Calgary Woman's Show -www.calgarywomansshow.com - at the BMO centre in stampede park.
Oct. 25 & 26 - Extra Life Calgary, Participate in a 24 hour marathon to support the Alberta Children's Hospital. Join the Calgary Team or Donate! Follow them on Twitch, Facebook, Twitter and Instagram!

Queen’s Park, Ontario/Victoria, British Columbia
Reg Hearsay/Canadian Press
A nationwide uproar has emerged over the monopolies provinces are creating around the impending legalization of cannabis.
Bill C-45, drafted by the federal Liberal government, will permit citizens to buy, possess, and grow their own marijuana. Passage is expected in late summer of 2018.
Many are accusing governments across the nation of rushing to cash in on a revenue opportunity few expect will be seen again in their lifetimes.
The Premiere of Ontario - Ms. Kathleen Wynne - hastily called a news conference to decry to the suggestion that the Ontario government was using the legalization of cannabis as a ‘major tax grab’.
What she described as ‘blatant partisanship’, she dismissed concerns about monopolizing cannabis distribution by the province.
“This is not simply about keeping children safe. Because we always keep children safe. Honest. This is about cannabis being treated the same as alcohol and gambling. Making profits from people choosing to pursue individual activities is in the interest of public policy. And the most profitable of those activities are in our interests. So, we will keep those revenues, and keep ensuring your children are safe.”
She bristled at the suggestion that cannabis - and by extension, that ‘sin’ taxes on alcohol and gambling - are viewed as a cash cow by governments.
“If it wasn’t for us delivering the services that Ontarian’s demand, we’d have to raise taxes, or let the people do it themselves. How in the world do you expect us to balance a budget without those revenues?”
“Why would you want your grandmother doing her own dialysis? Why do you suggest that?” Premiere Wynne added before leaving the podium, holding up a triacta ticket she’d purchased on the way to the news conference.
On the West coast, British Columbia's Premier John Horgan faced his own line of questioning in the lobby of the Legislative Assembly in Victoria. When asked about the low payout rates of the BCLCB (Liquor and Gaming Commission) on games of chance and how cannabis sales are expected to follow the same trajectory, Horgan said “It’s in the interests of all British Columbians to come together and support the government, whether through voluntary or involuntary means.”
“Our monopolies create jobs in Victoria and allow us to pay licensing fees to foreign corporations that would otherwise be paid by businesses. There’s no need for that. We do it all. And you’re welcome.”
A reporter who stated that if the current payout ratios from Keno and the province wide poker game - available in convenience stores and gas stations across the province - were offered in Nevada, a casino license holder would be subject to racketeering laws and felony charges of gangsterism - was blackjacked and forcibly removed by security.
Our fact checkers have verified these claims .
This reporter attempted to query the Alberta government on their reliance on liquor and gaming revenues - but was unsuccessful in obtaining a response by press time.
Alberta’s notorious ‘VLT’s’ (video lottery terminals) have an average payout of 92%, 4 percentage points lower than Nevada’s minimum for acquiring a casino license on slot machines.
Premier Rachel Notley’s office did not reply to questions from reporters, but she was spotted drinking a tequila Cesear in Nixx Pub on Edmonton Trail in Calgary. Ms. Notley had spent spent several hours playing ’Magic Sparkle Moonbeams’ on a VLT machine for $0.20 a spin, selecting 4 lines. Ms. Notley constantly encouraged the lady next to her to ‘go for broke’ and ‘hit it big’ by betting the maximum $5 per spin - or $0.25 on all 20 lines available.
The VLT's have an average of 3 seconds per spin, and betting the maximum, one can gamble more than $6,000 per hour on these machines. That's the equivalent of betting $75 per hand on a blackjack table, with loss ratios almost twice that of the popular card game.
A representative of the bar refused to divulge any further information about Ms. Notley's visit other than to say ‘We’re out of pickled beans and celery"....paused, and then added: "We're out of tequila now too. But we have plenty of Worcestershire sauce left."
John Horgan walked away from the podium after the physical altercation with the journalist by encouraging attendees to visit the Parliamentary Gift Shop on the way out, which provides the only exit possible from the Assembly. Access to the back door is restricted to MLA's and their officials and delegates only.
Other premiers have not responded to our emails as of time of writing. The Irving family was asked about their plans and their instructions to the Premiers of Atlantic Canada, but simply issued a terse statement through a spokesperson that they had 'No comment on the size of the pie slices yet'. The spokesperson added: "We'll tell our people when they need to know".

All member presales will take place at http://muse.tickets.musictoday.com. Full details below:
Tuesday, October 9th – 10am to 10pm local time
January 21 | San Diego, California | Valley View Casino Center
January 23 | Los Angeles, California | Staples Center
January 28 | Oakland, California | Oracle Arena
February 22 | Ft. Lauderdale, Florida | BankAtlantic Center
February 23 | Tampa, Florida | Tampa Bay Times Forum
February 25 | Orlando, Florida | Amway Center
February 28 | Cleveland, Ohio | Quicken Loans Arena
March 2 | Detroit, Michigan | Joe Louis Arena
March 8 | St. Louis, Missouri | Chaifetz Arena
March 10 | Tulsa, Oklahoma | BOK Center
April 12 | Boston, Massachusetts | TD Garden
April 19 | E. Rutherford, New Jersey | IZOD Center
Wednesday, October 10th – 10am – 10pm local time
February 3 | Edmonton, Alberta | Rexall Place
February 4 | Calgary, Alberta | Scotiabank Saddledome
February 6 | Vancouver, British Columbia | Rogers Arena
March 4 | Chicago, Illinois | United Center
March 7 | Minneapolis, Minnesota | Target Center
April 9 | Toronto, Ontario | Air Canada Centre
April 15 | New York, New York | Madison Square Garden
April 23 | Montreal, Quebec | Bell Centre
April 26 | Quebec City, Quebec | Colisée Pepsi
You will need your unique code to create a username and password for the muse.mu member pre-sale. Your login for www.muse.mu is separate and will not automatically work as a login for the pre-sale. For tips on creating your account, see below. We suggest visiting the pre-sale site in advance to create your account expediting your future ticket purchase.
How do I create an account with my access code?
• Click the "Log In" link in the upper right hand corner of http://muse.tickets.musictoday.com.
• Create a New Account by clicking the "Continue" button in the LEFT half of the screen.
• Create your username and enter it in the "username" field.
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• Important: Write down the username and password you create, along with your Access Code and put it in a safe place. You will need your Username, Password, and Access Code to login and buy tickets.
• Finally, enter your Access Code in the "Access Code" field and click "continue."
Please note: Some seat locations offered in the member presales will only be available for Will Call pickup and NO NAME CHANGES will be allowed. We feel restricting the delivery method to Will Call only ensures that genuine Muse fans have the opportunity to purchase pre-sale tickets and limits buyers from purchasing and reselling their tickets for profit. Some venues will be offering a “paperless ticket” for seats located within premium areas. Any lines or signage referring to "paperless tickets" do not involve orders placed during the muse.mu member pre-sales. If your delivery method is Will Call, your order will be waiting for you at the venue box office.

To Whom It May Concern
I am in the process of forming a professional gambling team and am presently soliciting investments for said team's bankroll. The minimum investment is $100 with no maximum. Our primary focus will be counting cards playing blackjack and it will be a very tight knit team with only myself and perhaps one close friend representing the players. Profits will be split on a straight 50/50 basis between investors and players after the bankroll has been doubled.
Counting cards represents a completely legal means of obtaining an advantage against the casino. Using the powerful blackjack simulator we can see (image included below) that under ideal conditions with a great cut, liberal rules (in particular the valuable option to early surrender against a ten which is prevalent throughout Alberta) we can see that with a $50,000 bankroll our team would be able to make on average $350 an hour with only 1.1% ROR (risk of ruin is the chance of going broke prior to doubling your bankroll). Unfortunately conditions are not always this optimal and we would also be playing in games where the hourly rate is lower. ROR is also understated because expenses are not accounted for in this simulation.
In a blackjack shoe game every card that is played alters the odds. When small cards come out of the shoe the player's advantage increases; face cards and aces improves the odds for the house. By keeping track of what is played a skilled gambler can adjust his wager accordingly and beat the game honestly.
If you would like to invest or have any questions please do not hesitate to contact me via this advertisement right away. Serious inquiries only please.
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