Things are a bit dire in New Brunswick. Debt in the local premier casino center is on the rise. One of the region’s largest employers may shut its door.
The Grey Rock Entertainment Centre, located on the Madawaska Maliseet First Nation in Edmundston, has about 115 employees during peak operations. The pandemic is forcing a reconsideration of its status. Travel is restricted so visitors from Quebec and Maine are cut off, turning the casino floor quiet.
The owner, John Bernard, said that the center has unsustainable revenue-sharing agreements. The growing debt has reached $800,000 since the casino reopened in early July. It has in fact experienced a dip in revenues of 65%.
“Right now, we probably shouldn’t be open because we’re running up our debt.”
The revenue-sharing agreements are with both the Madawaska Maliseet First Nation and the New Brunswick government. In this regard, Grey Rock must pay each entity 20 percent of revenues. The deal also requires lump-sum payments to the province at the rate $44,000 per month regardless of profits. It has not been able to meet its obligations and monthly expenses.
“Absolutely worst case scenario,” Bernard said of the borders closing.
To date Grey Rock Entertainment Centre has paid $6 million under the agreement over its five years of operation. It has about one year to go for the lump-sum payments.
A new hotel next to the casino is promising to attract some new customers from southern New Brunswick. It will have to wait as Edmundston has been rolled back to the orange-level recovery phase.
The entire region has been facing economic challenges for months. Tucked between Maine and Quebec, its businesses are reliant on cross-border customers.
According to Cathy Pelletier, Executive Director of the Edmundston Chamber of Commerce, the potential closure of the casino is concerning, but not a surprise.
“It is important to the economic development and the economic situation
in our region…hopefully it’s going to be for a short period of time.”
She affirmed that relying on the U.S. makes everyone realize how important it is to stick in your region and to shop local and to buy local.
Bernard is seeking help from the provincial government and the Madawaska Maliseet First Nation to avoid laying off the 75 employees working at present. The province has offered to defer revenue-sharing payments until March 31. As for the First Nation, it is expected discuss changes to revenue sharing.
No break is coming to Grey Rock for the $44,000 monthly payments. Per Bernard,
“I really want the governments to come back and act like shareholders
and business partners, because we’re in this together.”
The plan is to try to stay open until New Year’s Day, after which he will assess very seriously where Grey Rock stands.
“We’ve done everything we can to stay open, we’ve cut back the hours
but understand we cannot cut back on security and surveillance — we’re a casino.”