Shares of Great Canadian Gaming Corp. (TSX: GC) are trading at an all-time high on Tuesday following news that the Ontario Lottery and Gaming Corp., or "OLG," named the company, along with Brookfield Business Partners (TSX: BBU.UN)(NYSE: BBU) and other institutional partners as the new operators of select casinos around Toronto.
OLG is the Crown corporation responsible for Ontario’s lotteries, charity and Aboriginal casinos, commercial casinos, and slot machines at horse-racing tracks. The agreement with Great Canadian, Brookfield and partners is part of a broader plan of OLG to modernize its casinos. The plans are to turn the assets over to other companies to renovate and add leading-edge gaming, conference facilities, entertainment venues and accommodations.
Per the deal, Great Canadian and Brookfield will form a new 49%-49% partnership, planned to be called Ontario Gaming GTA LP, and acquire the gaming assets of OLG Slots at Woodbine, OLG Slots at Ajax Downs and Great Blue Heron Casino located in the Mississaugas of Scugog Island First Nation. Clairvest Group will control the other 2% of the new company.
The agreement affords Ontario Gaming GTA the exclusive right to operate the facilities for at least 22 years. Officially, Great Canadian will be the operator of the gambling venues, which are comprised of more than 2,200 staffers, 4,000 slot machines and 60 table games and cumulatively generated more than $1 billion in revenue last year.
The previous all-time high for shares of GC was $26.20, printed last November. The bar has been raised with today’s trading following the news, with shares soaring more than 15%, printing as high as $29.49 and holding near those highs early in the afternoon session.
Shares of BBU are also closing in on the record high at $29.94 from the company’s third day of trading as a public entity on the NYSE back in June 2017. The stock is up about 6.3% so far today at $29.28 and printed as high as $29.53 in earlier trading.
