Eagle River Casino seeks bankruptcy protection
Whitecourt, Alberta casino to run out of cash by mid-February, report says
The Eagle River Casino, majority owned by the Alexis First Nation, northwest of Edmonton, is in the midst of bankruptcy proceedings aimed at allowing the casino to continue operating while it restructures its debt.
Bankruptcy trustee documents obtained by CBC News show the casino, located about 10 kilometres west of Whitecourt on Highway 43, owes about $100 million and has assets of about $57 million.
The documents show the casino, hotel and truck stop has been consistently losing money recently and has been unable to pay down its debts.
A report by bankruptcy trustee, PricewaterhouseCoopers, says the casino will have exhausted it cash reserves by mid-February.
No one from Alexis First Nations, or any of the major creditors, returned calls to CBC News.
The Eagle River Casino is 60 per cent owned by Alexis and 40 per cent by the Las Vegas-based private casino company, Paragon Gaming.
The bankruptcy documents show Paragon Canada Alexis, the company that manages the casino, owes American private equity firm, Silverpoint Finance about $82 million.
It also owes Diana Bennett, the chief executive officer and co-founder of Paragon, about $18 million.
Lawyers representing the casino and its creditors are in an Edmonton court today seeking a deal to that would allow the casino to continue operating.
Yale Belanger is an associate professor of Native American Studies at the University of Lethbridge who specializes in First Nations' gaming.
Belanger said the Eagle River Casino has never produced the revenue or jobs that were projected. But he thinks the casino will survive.
"I think that the casino will remain operational," he said. "It will still provide employment internally. But once again, the optics are bad. People will take a look at this and they may raise eyebrows at yet another First Nations operation that in their minds, is not operating quite up to snuff," he said.
"That could impact other communities, not only in terms of the revenues that perhaps flow to them from casinos that might take a bit of a hit, but in terms of investors coming into their communities and [being] willing to leave money behind in partnership arrangements."
The Alberta Gaming and Liquor Commission licenses the casino. In an emailed statement, spokesperson Jody Korchinski confirmed “that at this time, there is no impact on the gaming licence which resides with the Alexis Casino Limited Partnership.
"The casino remains open to customers.”
The Eagle River Casino opened on Jan. 31, 2008 on the Alexis Nakota Sioux First Nation. The band had hoped it would become a tourist attraction while creating jobs for its people.
- A previous version of this story said Eagle River was the first casino in Alberta to seek bankruptcy protection. In fact, Calgary's Silver Dollar Casino filed for bankruptcy in 2009. The story has been corrected.Jan 24, 2014 5:09 PM MT