As filed with the Securities and Exchange Commission on November 20, 2018

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Gateway Casinos & Entertainment Limited

(Exact Name of Registrant as Specified in its Charter)

Not Applicable

(Translation of Registrant’s Name into English)

Canada	7993	Not Applicable
(State or other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

4331 Dominion Street

Burnaby, BC V5G 1C7

(604) 412-0166

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Cogency Global Inc.

10 E. 40th Street, 10th floor

New York, NY 10016

(800) 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Christopher D. Lueking, Esq.
Zachary Judd, Esq.
Latham & Watkins LLP
330 North Wabash Avenue
Suite 2800
Chicago, Illinois 60611
(312) 876-7700 Alexander D. Lynch, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 (212) 310-8163

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)
Common shares, no par value per share	$100,000,000	$12,120

(1) Estimated solely for purpose of calculating the amount of registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended.

(2) Includes the aggregate offering price of additional common shares that may be acquired by the underwriters.

(3) Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued                     , 2018

                    Shares

GATEWAY CASINOS & ENTERTAINMENT LIMITED

COMMON SHARES

This is the initial public offering of Gateway Casinos & Entertainment Limited and no public market exists for our common shares. We are not selling any common shares in the offering. The common shares are being offered by investment funds managed by The Catalyst Capital Group Inc. and TOP V New World Holdings LLC, which we refer to herein as the selling shareholders. We will not receive any proceeds from the sale of common shares by the selling shareholders in this offering.

We anticipate that the initial public offering price will be between US$            and US$            per share.

We have applied to list our common shares on the New York Stock Exchange, or NYSE, under the symbol “GTWY”.

Upon the closing of this offering, we will be a “controlled company” within the meaning of the corporate governance rules of the NYSE and will be exempt from certain corporate governance requirements. See “Management—Director Independence.”

We are an “emerging growth company” and a “foreign private issuer” under applicable Securities and Exchange Commission rules and, as such, will be eligible for reduced public company disclosure requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company and a Foreign Private Issuer” and Management—Foreign Private Issuer Status”

Investing in the common shares involves risks. See “Risk Factors” beginning on page 52.

PRICE US$         PER SHARE

	Price to Public		Underwriting Discounts and Commissions(1)		Proceeds to Selling Stockholders
Per share		US$		US$		US$
Total		US$		US$		US$

(1) We have also agreed to reimburse the underwriter for certain FINRA-related expenses. See “Underwriters.”

The selling shareholders have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to an additional                common shares at the initial public offering price less the underwriting discount.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the common shares against payment on or about                 , 2018.

Morgan Stanley

                    , 2018

TABLE OF CONTENTS

INDUSTRY AND MARKET DATA	ii
MEANING OF CERTAIN REFERENCES	iii
PRESENTATION OF FINANCIAL MATTERS AND OTHER INFORMATION	iv
BASIS OF PRESENTATION	vi
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	vii
TRADEMARKS AND TRADE NAMES	viii
PROSPECTUS SUMMARY	1
OFFERING	36
SELECTED SUMMARY HISTORICAL FINANCIAL INFORMATION	38
RISK FACTORS	52
CURRENCY AND EXCHANGE RATE INFORMATION	83
USE OF PROCEEDS	84
DIVIDEND POLICY	85
CAPITALIZATION	86
DILUTION	87
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER DATA	88
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	93
BUSINESS	135

MANAGEMENT	173
EXECUTIVE COMPENSATION	185
PRINCIPAL AND SELLING SHAREHOLDERS	195
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	197
DESCRIPTION OF INDEBTEDNESS	200
DESCRIPTION OF SHARE CAPITAL	203
SHARES ELIGIBLE FOR FUTURE SALE	220
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS	223
MATERIAL CANADIAN INCOME TAX CONSIDERATIONS FOR NON-CANADIAN HOLDERS	229
UNDERWRITERS	231
LEGAL MATTERS	235
EXPERTS	236
CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT	236
ENFORCEMENT OF CIVIL LIABILITIES	237
EXPENSES OF THE OFFERING	238
WHERE YOU CAN FIND ADDITIONAL INFORMATION	239
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

We are responsible for the information contained in this prospectus and in any free writing prospectus we prepare or authorize. Neither we, the selling shareholders nor any of the underwriters have authorized anyone to provide you with different information, and neither we, the selling shareholders nor any of the underwriters take responsibility for any other information others may give you. We and the selling shareholders are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is only accurate as of the date of this prospectus. You should not assume that the information contained in this prospectus is accurate as of any date other than its date. Our business, financial condition, results of operations and prospects may have changed since that date.

i

INDUSTRY AND MARKET DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the regions in which we operate, including our general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent publicly available sources and reports provided to us (including reports from the British Columbia Lottery Corporation, or BCLC, the Alberta Gaming and Liquor Commission, or AGLC, the Alcohol and Gaming Commission of Ontario, the AGCO, (the Statistics Canada, the central statistical agency of the Province of British Columbia, or BC Stats, the Conference Board of Canada, or the CBC, the Canadian Gaming Association, Tourism British Columbia, Tourism Vancouver, Edmonton Tourism, Destination BC, the Ontario Lottery and Gaming Corporation, or the OLG, HLT Advisory Inc., or HLT, Oxford Economics, Asia Pacific Foundation of Canada, Edmonton Economic Development Corporation, Alberta Culture and Tourism, the University of Las Vegas Center for Gaming Research, or UNLV, and other industry publications, surveys and forecasts). Neither we, the selling shareholders nor any of the underwriters have independently verified the accuracy or completeness of any third-party information. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based upon our management’s knowledge of the industry, have not been independently verified. While we believe that the market data, industry forecasts and similar information included in this prospectus are generally reliable, such information is inherently imprecise. In addition, assumptions and estimates of our future performance and growth objectives and the future performance of its industry and the markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the heading “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

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MEANING OF CERTAIN REFERENCES

As used in this prospectus, “casino” means a gaming property with slot machines and/or table games and “CGC” means a community gaming center property in British Columbia with slot machines and/or bingo. References to the number of “slot machines” and revenue generated from “slot machines” in this prospectus include video lottery terminals, or VLTs, and electronic table games. References to the number of “table games” and revenue generated from “table games” in this prospectus include touch bet roulette and poker tables.

Additionally, as used in this prospectus, the following terms have the meanings set forth below:

• “Net Win” means the aggregate of Slot Win and the Table Win less free play and loyalty points redeemed;

• “Poker Rake” means the commission we earn from poker tables and is calculated as a fixed percentage of the amount wagered by our customers, up to a predetermined maximum amount, on every hand of poker played;

• “Slot Coin-in” means the aggregate amount of money customers have wagered on slots and other electronic gaming machines;

• “Slot Win” means the amount of Slot Coin-in retained and recorded as casino revenue;

• “Slot Win %” means the ratio of Slot Win divided by Slot Coin-in;

• “Table Drop” means the aggregate amount of money customers deposit to purchase casino chips to wager on table games, and is commonly computed as the aggregate amount of money counted in the table games’ drop boxes. Generally, the Table Drop is an indicator of our gaming business; however, over the short-term, the Table Drop is subject to shifts in customer behavior around buying, retaining and cashing-in of casino chips;

• “Table Win” means the amount of Table Drop retained and recorded as casino revenue; and

• “Table Win %” means the ratio of the Table Win divided by the Table Drop, which fluctuates with the statistical variations or volatility inherent in casino games, as well as with changes in customer behavior around buying, retaining and cashing-in of casino chips.

iii

PRESENTATION OF FINANCIAL MATTERS AND OTHER INFORMATION

IFRS

This prospectus includes our audited annual consolidated financial statements as well as our unaudited condensed consolidated interim financial statements, or the Financial Statements. Our audited consolidated financial statements for the years ended December 31, 2017 and 2016 were prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, the independent, private-sector body that develops and approves IFRS. None of the financial statements were prepared in accordance with generally accepted accounting principles in the United States.

Unless indicated otherwise, our financial information in this prospectus has been prepared on a basis consistent with IFRS as issued by the International Accounting Standards Board. In making an investment decision, investors must rely on their own examination of our results and consult with their own professional advisors.

Historical Financial Data Provided for the Ontario Properties

The audited historical financial information and results of the Southwest Ontario and North Ontario properties for their fiscal years ended March 31, 2017 and 2016 and the audited historical financial information and results of the Central Ontario properties for their fiscal years ended March 31, 2018 and 2017 are included in this prospectus and were prepared or provided by the OLG and consist solely of audited combined schedules of revenue and direct expenses. The unaudited interim financial data for the Southwest Ontario and North Ontario properties for the period of January 1, 2017 to May 8, 2017, and to May 29, 2017, respectively, and the unaudited interim financial data for the Central Ontario properties for the period of January 1, 2018 to July 17, 2018 are included in this prospectus under the heading “Selected Summary Historical Financial Information—Pro Forma Financial Data”. See “Risk Factors—Risks Related to Our Business—The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of unaudited combined schedules of revenue and direct expenses only and does not represent complete financial statements; care should be taken when relying upon such information”.

Non-IFRS Financial Measures

This prospectus refers to certain non-IFRS measures including financial measures commonly used by financial analysts in evaluating the financial performance of companies, including companies in the gaming industry. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

We use non-IFRS measures including “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Property EBITDA”, “Adjusted Property EBITDA Margin”, “EBITDA”, “Free Cash Flow”, “Free Cash Flow Conversion” and “Pro Forma Adjusted EBITDA”, which we collectively refer to as the Non-IFRS Financial Measures. For purposes of this prospectus, these terms are defined as follows:

• “Adjusted EBITDA” means EBITDA plus (i) share-based compensation (recovery), (ii) change in fair value of embedded derivatives, (iii) change in fair value of cross currency interest rate swaps, (iv) loss on debt extinguishment, (v) loss on debt modification, (vi) (gain) / loss on foreign exchange, (vii) gain on sale of property and equipment, (viii) non-cash deferred rent, (ix) tax adjustment for prior periods, (x) business acquisition, transaction, site pre-opening, restructuring and other, and (xi) write-down of non-financial assets.

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• “Adjusted EBITDA Margin” means the ratio of Adjusted EBITDA to total revenue.

• “Adjusted Property EBITDA” means the Adjusted EBITDA for each reporting segment or property, as applicable, excluding corporate costs.

• “Adjusted Property EBITDA Margin” means the ratio of Adjusted Property EBITDA for a reporting segment to total revenue of the reporting segment.

• “EBITDA” means, unless otherwise noted or the context otherwise indicates, income (loss) and comprehensive income (loss) for the period plus (i) amortization of intangible assets, (ii) depreciation of property and equipment, (iii) interest expense, net, less (iv) expense or recovery of income taxes.

• “Free Cash Flow” means Adjusted EBITDA less maintenance capital expenditures, interest expense, current taxes paid and mandatory debt principal repayments.

• “Free Cash Flow Conversion” means Free Cash Flow divided by Adjusted EBITDA.

• “Pro Forma Adjusted EBITDA” means the sum of the Adjusted EBITDA of the Company and the Ontario properties giving effect to the Ontario acquisitions and other transactions contemplated as if they occurred during the first day of the period presented.

These Non-IFRS Financial Measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Certain of the above Non-IFRS Financial Measures also remove the impact of certain non-routine, non-recurring, and/or non-cash items to enable management, investors and analysts to gain a clearer understanding of the underlying our financial performance and help to provide a more complete understanding of factors and trends impacting our business. We also believe that securities analysts, investors and other interested parties frequently use these Non-IFRS Financial Measures in the evaluation of issuers similar to us. In particular, EBITDA, Adjusted EBITDA, Adjusted Property EBITDA and Adjusted EBITDA Margin are non-IFRS financial measures commonly used by financial analysts in evaluating the financial performance of companies, including companies in the gaming industry. We believe Free Cash Flow and Free Cash Flow Conversion are non-IFRS measures that are meaningful to investors as they are useful measures of performance and we use these measures as an indication of the strength of our business model and our ability to generate cash. Our management also uses these Non-IFRS Financial Measures in order to facilitate operating performance comparisons on a consistent basis from period to period, to provide a more complete understanding of factors and trends affecting our business, to prepare annual operating budgets and forecasts and to determine components of management compensation. As there is no generally accepted method of calculating the Non-IFRS Financial Measures, the Non-IFRS Financial Measures as used herein are not necessarily comparable to similarly titled measures of other companies. The items excluded from EBITDA are significant in assessing our operating results and liquidity. The Non-IFRS Financial Measures have limitations as analytical tools and should not be considered in isolation from, or as an alternative to, net income, cash flow from operations or other data prepared in accordance with IFRS. Therefore, readers are cautioned that the Non-IFRS Financial Measures do not have a standardized meaning and should not be used in isolation or as a substitute for net (loss) income, cash flows from operating activities or other income or cash flow statement data prepared in accordance with IFRS.

For a presentation and reconciliation of the foregoing Non-IFRS Financial Measures to their most directly comparable measures under IFRS, see “Selected Summary Historical Financial Information”.

v

BASIS OF PRESENTATION

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Gateway,” the “Company,” “we,” “us” and “our” refer to Gateway Casinos & Entertainment Limited, together with its subsidiaries.

We publish our consolidated financial statements in Canadian dollars. In this prospectus, unless otherwise specified, all monetary amounts are in Canadian dollars, all references to “$” and “C$” mean Canadian dollars and all references to “US$,” “USD” and “dollars” mean United States dollars.

This prospectus includes our audited consolidated financial statements as of and for the years ended December 31, 2017 and 2016 presented in Canadian dollars and prepared in accordance with IFRS as issued by the IASB. This prospectus includes our unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 and 2017 presented in Canadian dollars and prepared in accordance with IAS 34. None of the financial statements were prepared in accordance with generally accepted accounting principles in the United States. As a result of the acquisition of the North and Southwest Bundles from the OLG (each as defined herein), the year ended December 31, 2017 may not be comparable to the year ended December 31, 2016.

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

vi

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Property Highlights” and “Our Growth Strategies.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “could,” “project,” “expect,” “aim,” “project,” “budget,” “estimate,” “intend,” “plan,” “goal,” “forecast,” “target,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions and the negative of such expressions.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the factors discussed under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Property Highlights” and “Our Growth Strategies”; our estimates regarding future revenue, expenses and needs for additional financing; and our ability to keep and retain key employees. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

vii

TRADEMARKS AND TRADE NAMES

This prospectus includes trademarks, such as “Grand Villa Casino,” “Starlight Casino,” “Cascades Casino,” “Lake City Casinos,” “Playtime,” “Halley’s Club,” ”Nova Bar,” “MATCH Eatery & Public House,” “Atlas Steak + Fish,” “Personas + Patio + Restaurant + Lounge,” “The Buffet” and “CHOW Lucky Noodle Bar,” which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this prospectus may appear without the ^® or ™ symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. All other trademarks used in this prospectus are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

viii

PROSPECTUS SUMMARY

This summary highlights principal features of the Offering and certain information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common shares. You should read this entire prospectus carefully, including the information presented under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. Please refer to “Meaning of Certain References” above” for a list of defined terms used herein, including certain industry terminology.

OUR BUSINESS

Company Overview

We are one of the largest and most diversified gaming and entertainment companies in Canada, based on both number of properties and number of gaming positions. Our operations are currently comprised of 26 gaming properties in British Columbia, Ontario and Edmonton, Alberta, with 13,618 slot machines, 429 table games, including 48 poker tables, 561 hotel rooms, 80 food and beverage, or F&B, outlets and 8,500 employees. We have demonstrated a track record of successfully operating, developing and acquiring gaming properties and contributing to the communities in which we live and work.

We have a leading market position in each of the markets in which we operate. In British Columbia, we are one of the most diversified gaming and entertainment companies based on both the number of properties and gaming positions. Our British Columbia properties include 41% of all slot machines and 40% of all table games in the province. We provide operational services at six of the 14 properties in the Lower Mainland of British Columbia, a region encompassing the Sea-to-Sky Corridor, the Fraser Valley and British Columbia’s largest market, the Greater Vancouver Regional District, or the GVRD (recently renamed the Metro Vancouver Regional District). We also provide operational services at three of the nine gaming properties on Vancouver Island and are the only service provider with casinos in the Thompson-Okanagan region of British Columbia, where we provide operational services at properties located in Kelowna, Vernon, Penticton and Kamloops. In Alberta, we are one of the largest gaming operators in the Edmonton region, where we operate two properties in prime, high-traffic entertainment districts.

In May 2017, we became the exclusive service provider in the OLG’s North Ontario gaming bundle, or the North Bundle and Southwest Ontario gaming bundle, or the Southwest Bundle. With these acquisitions, we added nine properties and two new property development opportunities to our portfolio, diversifying our operations into Canada’s largest gaming market and establishing a significant platform for future growth. On July 18, 2018, we became the exclusive service provider for a third gaming bundle, located in Central Ontario, or the Central Bundle, containing two existing gaming properties and the opportunity to build a third additional property. As part of our Ontario expansion plan, we expect to develop two additional gaming properties in North Bay and the Kenora area in the North Bundle, which, along with the development of a third property in Wasaga Beach in the Central Bundle and a proposed new build in Delta, British Columbia, would bring our total number of properties to 30.

1

The following map presents our property footprint and key operating and financial highlights across British Columbia, Alberta and Ontario:

Notes:    (1) The financial information has been derived from our financial statements for the nine months ended September 30, 2018.

2

We have developed four principal casino brands: Grand Villa, Starlight, Cascades and Playtime. In March 2018, we launched our first Playtime property and are in the process of rebranding smaller properties into the Playtime brand. Each brand offers a distinct experience to our customers. We have also developed five proprietary F&B brands: Atlas Steak + Fish, or Atlas, MATCH Eatery & Public House, or MATCH, CHOW Lucky Noodle Bar, or CHOW, and The Buffet, and in 2018, we launched Halley’s Supper Club, our new supper club concept. Our properties are generally branded according to market size, market growth potential and local community character, with proximity to our other brands also playing a key role in the decision process. This proprietary branding strategy is meant to associate our properties with exciting local entertainment experiences, which serves to attract new customers and drive increased visitation and loyalty from existing customers. This branding strategy has been implemented at most of our British Columbia and Alberta properties and we are targeting full implementation in Ontario by 2020.

The figures below outline our principal casino and F&B brands, along with key characteristics of each brand:

Our Principal Casino Brands

• Focused in urban markets • Premium • Stylish	• Focused in urban markets • Contemporary • High energy	• Community focused • Casual • Approachable	• Community focused • Neighbourly • Relaxed

Our Principal F&B Brands

• Modern steakhouse • Elevated • Memorable	• Creative pub food • Lively sports bar • Welcoming	• Authentic Asian flavours • Exciting • Interactive	• Variety • Great value • Casual	• Modern supper club • Showcase theatre • Vintage cabaret

For the nine months ended September 30, 2018, we generated total revenue of $484.3 million, income and comprehensive income of $156.2 million and Adjusted EBITDA of $122.6 million. For the year ended December 31, 2017, we generated total revenue of $478.8 million, a loss and comprehensive loss of $65.1 million and Adjusted EBITDA of $144.2 million. For a reconciliation of Income (Loss) and Comprehensive Income (Loss) to Adjusted EBITDA and Schedules of adjustments, see “Summary—Selected Summary Historical Financial Information”.

PROPERTY HIGHLIGHTS

Current Properties Overview

In total, our current properties (including properties leased by us) have over one million square feet of gaming space in which we offer 13,618 slot machines, 429 table games, including 48 poker tables, and 866 bingo seats. Together with our business partners, we offer a wide range of amenities at or adjoining our properties to support our gaming operations and which differentiate us from our competition, including four hotels and convention centers (three of which we own), 80 F&B outlets and 26 venues which feature live entertainment. We actively look for opportunities to expand and enhance our existing properties and to acquire and develop additional properties.

The chart below summarizes some of the key attributes of each of our current gaming properties and the expiration date of the operating agreements that we have entered into with the BCLC and OLG and licenses from

3

the AGLC. Excluding the proposed new builds in Delta, BC, the Kenora area in Ontario, North Bay, Ontario and Wasaga Beach, Ontario, we operate in 20 casinos, five of which are owned and 15 of which are leased. We also operate in six CGC properties, three of which are owned and three of which are leased.

See “Risk Factors—Risks Related to Our Business—Renewal of lease agreements for our properties may not be obtained or if obtained, may be on less favorable terms.”

Property Name	Year Built/ Latest Renovation		Description(1)	Total Land Area (Acres)		No. of Slot Machines(2)		No. of Table Games(3)		Operating Agreement or Licence Expiration(4)		Properties Owned / Leased(5)
Grand Villa Casino Burnaby(6)		2018	Approximately 301,600 total square feet / 93,100 square feet of gaming space, Delta hotel and conference center and a show lounge and nine F&B outlets.		6.1		1,200		81		Apr. 2038		Leased
Cascades Casino Langley(7)		2018	Approximately 155,200 total square feet / 54,100 square feet of gaming space, a 420-seat theatre, Coast Hotel and convention center and four F&B outlets.		9.3		984		33		Apr. 2038		Leased
Starlight Casino New Westminster		2015	Approximately 164,700 total square feet / 103,700 square feet of gaming space, a newly renovated VIP area including private salons and five F&B outlets.		23.1		934		59		Apr. 2038		Leased
Total							3,118		173
Thompson-Okanagan
Cascades Casino Kamloops		2015	Approximately 66,100 total square feet / 33,900 square feet of gaming space and four F&B outlets.		6.0		442		16		Apr. 2038		Owned
Playtime Casino Kelowna(8)		2018	Approximately 36,800 total square feet / 26,000 square feet of gaming space and three F&B outlets.		N/A		437		16		Apr. 2038		Leased
Cascades Casino Penticton		2017	Approximately 57,600 total square feet / 32,500 square feet of gaming space and four F&B outlets.		1.7		400		11		Apr. 2038		Leased
Lake City Casino Vernon		2014	Approximately 32,000 total square feet / 24,200 square feet of gaming space and three F&B outlets.		3.4		400		9		Apr. 2038		Owned
Total							1,679		52
CGCs
Chances Mission		2010	Approximately 11,100 total square feet / 8,400 square feet of gaming space and one F&B outlet.		2.6		125		—		Apr. 2038		Leased
Chances Squamish		2013	Approximately 25,000 total square feet / 14,200 square feet of gaming space and two F&B outlets.		2.8		99		—		Apr. 2038		Leased

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Property Name	Year Built/ Latest Renovation		Description(1)	Total Land Area (Acres)		No. of Slot Machines(2)		No. of Table Games(3)		Operating Agreement or Licence Expiration(4)		Properties Owned / Leased(5)
Chances Abbotsford		2012	Approximately 22,400 total square feet / 16,800 square feet of gaming space and two F&B outlets.		5.0		211		—		Apr. 2038		Owned(14)
Chances Campbell River(9)		2018	Approximately 19,100 total square feet / 13,700 square feet of gaming space and two F&B outlets.		2.0		150		—		Apr. 2038		Owned
Chances Courtenay(10)		2018	Approximately 19,100 total square feet / 13,700 square feet of gaming space and two F&B outlets.		2.9		200		—		Apr. 2038		Owned
Playtime Gaming Victoria(11)		1994	Approximately 13,600 total square feet / 9,500 square feet of gaming space, electronic and traditional bingo centers and one F&B outlet.		1.9		—		—		Mar. 2019		Leased
Total							785		—
Ontario
Western Fair District London Slots		2002	Approximately 78,100 total square feet / 54,300 square feet of gaming space and two F&B outlets.		N/A		767		—		Mar. 2037		Leased
Point Edward Casino(12)		2018	Approximately 78,600 total square feet / 54,300 square feet of gaming space and two F&B outlets.		7.9		484		13		Mar. 2037		Owned
Woodstock Raceway Slots		2001	Approximately 14,000 total square feet / 12,300 square feet of gaming space and one F&B outlet.		N/A		224		—		Mar. 2037		Leased
Dresden Raceway Slots		2001	Approximately 14,000 total square feet / 11,600 square feet of gaming space and one F&B outlet.		N/A		154		—		Mar. 2037		Leased
Clinton Raceway Slots		2000	Approximately 14,700 total square feet / 12,000 square feet of gaming space, a racetrack and one F&B outlet.		N/A		123		—		Mar. 2037		Leased
Hanover Raceway Slots		2001	Approximately 15,000 total square feet / 13,600 square feet of gaming space and two F&B outlets.		28.9		189		—		Mar. 2037		Leased
Thunder Bay Casino		2000	Approximately 46,500 total square feet / 37,700 square feet of gaming space and two F&B outlets.		3.7		450		11		Mar. 2037		Owned
Sault Ste. Marie Casino		1999	Approximately 61,800 total square feet / 51,700 square feet of gaming space and two F&B outlets.		13.8		425		11		Mar. 2037		Owned
Sudbury Raceway Slots		1999	Approximately 45,600 total square feet / 33,000 square feet of gaming space and one F&B outlet.		158.0		427		—		Mar. 2037		Leased

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Property Name	Year Built/ Latest Renovation	Description(1)	Total Land Area (Acres)	No. of Slot Machines(2)	No. of Table Games(3)	Operating Agreement or Licence Expiration(4)	Properties Owned / Leased(5)
Gateway Innisfil	2001	Approximately 87,000 total square feet / 29,500 square feet of gaming space and two F&B outlet.	N/A	989	—	Jul. 2041	Leased
Casino Rama Resort	1996	Approximately 813,000 total square feet / 172,000 square feet of gaming space and nine F&B outlets.	N/A	2,517	101	Jul. 2041	Leased
Total				6,749	136
Edmonton
Grand Villa Casino Edmonton	2016	Approximately 62,600 total square feet / 39,600 square feet of gaming space and seven F&B outlets.	N/A	522	28	Aug. 2022	Leased
Starlight Casino Edmonton(13)	2018	Approximately 123,100 total square feet / 68,200 square feet of gaming space and six F&B outlets.	N/A	765	40	Aug. 2022	Leased
Total				1,287	68
Grand Total:				13,618	429

Notes:    (1) Gaming square footage includes back of house areas and excludes F&B and common areas and/or administrative and staff areas, as applicable.

(2) Number of slot machines includes VLTs and electronic table games, and relates to the count as at September 30, 2018. We provide operational services to the AGLC and the BCLC; however, the AGLC and the BCLC own or lease all of our slot machines, provide certain table game equipment and are responsible for most of the related capital expenditures. See “Regulatory and Licensing Matters”.

(3) Number of table games includes touch bet roulette and relates to the count as at September 30, 2018. Because live table games typically have six gaming positions, six touch bet roulette terminals are represented as one table game for the purpose of the table game count.

(4) See “Business—Regulatory and Licensing Matters”.

(5) See “Business—Our Properties”.

(6) Expansions to our Grand Villa Casino Burnaby were completed in 2017 and a refresh of the Delta hotel was completed in 2018.

(7) An expansion of the MATCH patio at our Cascades Casino Langley was completed in the first quarter of 2018. The addition of an Atlas restaurant, refresh and addition of gaming space, and a refresh of the Coast hotel is currently underway and is expected to be completed in phases beginning this year through to the second quarter of 2019.

(8) The Playtime Casino Kelowna is located within the Delta Hotels Grand Okanagan Resort. We recently added a MATCH restaurant at this location that opened in the first quarter of 2018.

(9) A MATCH restaurant was recently completed at Chances Campbell River.

(10) A MATCH restaurant was recently completed at Chances Courtenay.

(11) We continue to provide operational services for bingo at this location pursuant to a Bingo Operational Services Agreement, or BOSA, pending the conclusion of BCLC’s request for proposal for a new gaming property in the Greater Victoria Region.

(12) Renovations at our Point Edward casino are expected to be completed by the end of 2018.

(13) The redeveloped and rebranded Starlight Casino Edmonton (formerly the Palace Casino Edmonton) was completed in September 2018.

(14) On December 23, 2015, we acquired 69.3% of the Abby Joint Venture. Abby Properties Ltd. is the registered owner of the lands and premises upon which the Chances Playtime Abbotsford is located and was appointed bare trustee to hold legal title on behalf of PT Abbotsford Enterprises Ltd. (a predecessor of Playtime Gaming Group) and 0752529 B.C. Ltd., together as beneficial owners (pursuant to a joint venture agreement between Abby Properties Ltd., 0752729 B.C. Ltd. and PT Abbotsford Enterprises Ltd.), pursuant to a nominee agreement between all three parties.

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Grand Villa Casino Burnaby

The Grand Villa Casino Burnaby is our flagship property and has been in operation since 2008. Located in Burnaby, British Columbia and styled as a modern take on an “Italian Villa”, the Grand Villa Casino Burnaby is designed to provide customers with an inclusive, comfortable and exciting atmosphere. With approximately $218.5 million invested since 2001 (as of September 30, 2018), the Grand Villa Casino Burnaby is one of our largest contributors based on EBITDA. The Grand Villa Casino Burnaby has a wide array of gaming and non-gaming amenities, including hotel accommodations, meeting space, multi-function entertainment facilities, and multiple F&B outlets. The property includes the Delta Hotel, part of the Marriott International hotel chain, and benefits from its central location in the GVRD, which is in close proximity to Vancouver and surrounding suburban areas. The approximate 301,600 square foot casino contains approximately 93,100 square feet of gaming space and 1,200 slot machines, including a high-limit slot machine room and 81 table games, including 11 poker tables. We expect that the Grand Villa Casino Burnaby will continue to be the most significant contributor to our business in the GVRD. Under the Sale and Leaseback Transactions (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Sale and Leaseback Transactions”), one of our subsidiaries entered into a 20-year lease for the lands and premises constituting the Grand Villa Casino Burnaby, with one 10-year renewal term plus three 10-year option terms pursuant to an option agreement.

We have invested the majority of an approximately $14.2 million allocated to the expansion of the Grand Villa Casino Burnaby premises. We have completed the addition of 47 slot machines, up to ten table games (including four high limit tables, four poker tables and two regular table games), an Atlas (replacing the EBO restaurant), the Bistro restaurant and a CHOW, along with improvements to the hotel.

We have a 10-year contract with Delta Hotels Limited to manage the Delta Hotel and Conference Centre located at the Grand Villa Casino Burnaby, or the Management Agreement, which expires in December of 2019 and has two five-year renewal options. Under the Management Agreement, Delta Hotels Limited operates the hotel and manages the staff of the hotel. In addition, Delta Hotels Limited provides a reservation service and engages in various marketing activities. Pursuant to the terms of the Management Agreement, we pay a management fee for these services. We are in the process of negotiating an agreement to become a franchised property once a definitive franchise agreement is negotiated and takes effect.

Cascades Casino Langley

The Cascades Casino Langley is located in downtown Langley, British Columbia. With approximately $86.5 million invested since it was built in 2005 (as of September 30, 2018), the property offers a variety of gaming and non-gaming amenities, including several of our signature F&B amenities, hotel and spa accommodations and a convention space. Serving a growing area with a combined population of over 924,000 according to BC Stats, Cascades Casino Langley is situated 40 kilometers east of downtown Vancouver and within 16 kilometers of the Canada–U.S. border. Under the Sale and Leaseback Transactions, one of our subsidiaries entered into a 20-year lease for the lands and premises constituting the Cascades Casino Langley, with one 10-year renewal term plus three 10-year option terms pursuant to an option agreement.

The approximate 155,200 square foot Cascades Casino Langley offers approximately 54,100 square feet of gaming space, featuring 984 slot machines and 33 table games, including five poker tables, and 185 bingo seats.

In 2014, we completed a floor refresh and reinvention of our F&B offerings at Cascades Casino Langley that included, among other things, the addition of MATCH. During 2018, we expanded the MATCH patio and began an expansion of the property to increase gaming space and add an Atlas. The expansion is expected to be completed by the end of the second quarter of 2019.

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Cascades Casino Langley Coast Hotel & Convention Centre

We have a franchise agreement in place with Coast Hotels for the hotel located at the Cascades Casino Langley, or the Franchise Agreement. Under the Franchise Agreement, Coast Hotels provides franchise services, including identifying the hotel on its website, toll-free reservation services and participation in Coast Hotel marketing initiatives. However, unlike our arrangement with Delta Hotels Limited, the management of the hotel remains our exclusive responsibility. On October 12, 2015, the Franchise Agreement was automatically renewed on the same terms and conditions for an additional five years ending October 13, 2020. The Franchise Agreement will automatically renew for a further period of five years, provided that we are in compliance with terms of the Franchise Agreement and neither party elects to terminate the Franchise Agreement.

During 2018, we completed a refresh of the convention center and expect to complete hotel renovations in the fourth quarter of 2018.

Starlight Casino New Westminster

The Starlight Casino New Westminster features the latest gaming options in a contemporary property. As of September 30, 2018, approximately $138.7 million has been invested in the property since 2001 and we have completed various upgrades, including renovations to our high-limit table area in 2011 and 2014, and improvements to our onsite restaurants between 2014 and 2016. The Starlight Casino New Westminster is easily visible and accessible as it is situated 24 kilometers southeast of downtown Vancouver, beside the interchange of a major provincial highway and is in close proximity to Richmond, British Columbia (that has a high demographic of Asian patrons) and surrounding suburban areas. Under the Sale and Leaseback Transactions, one of our subsidiaries entered into a 20-year lease for the lands and premises constituting the Starlight Casino New Westminster, with one 10-year renewal term plus three 10-year option terms pursuant to an option agreement.

The approximate 164,700 square foot Starlight Casino New Westminster offers approximately 103,700 square feet of gaming space, which features best-in-class gaming equipment and entertainment amenities, and contains 934 slot machines and 59 table games, as well as several F&B outlets, including MATCH, The Buffet and the Red Bar Lounge.

Thompson-Okanagan Casinos

Cascades Casino Kamloops

The Cascades Casino Kamloops is located in Kamloops, British Columbia, the second largest city in the British Columbia interior according to BC Stats. Previously operating under the Lake City brand name, the Cascades Casino Kamloops was rebranded and relocated to its current location off Highway 1 in 2015. In its new location, the Cascades Casino Kamloops is part of a $51.0 million gaming and entertainment destination in Kamloops. The approximate 66,100 square foot property has approximately 33,900 square feet of gaming space, 442 slot machines and 16 table games, including two poker tables, as well as four F&B outlets (a MATCH, The Buffet, an Atlas and a Glacier Bar).

Playtime Casino Kelowna

The Playtime Casino Kelowna, formerly the Lake City Casino Kelowna, is located within the 257-room Delta Hotels Grand Okanagan Resort in Kelowna, British Columbia. According to BC Stats, Kelowna is the largest city in the British Columbia interior, and boasts a thriving tourism sector. In addition to its desirable location in the Grand Okanagan Resort, the Playtime Casino Kelowna benefits from its proximity to the Prospera Place, a 6,886 seat multi-purpose sporting and entertainment facility in downtown Kelowna. The approximate

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36,800 square foot property has approximately 26,000 square feet of gaming space, 437 slot machines and 16 table games, including four poker tables, as well as three F&B outlets and a Prestige Beach House hotel nearby. In March 2018, we completed an approximate $4.1 million renovation and F&B expansion, including a MATCH and The Buffet, and rebranded as a Playtime casino. The current lease at this site is due to expire on May 31, 2029 and has two five-year extension options.

Cascades Casino Penticton

The Cascades Casino Penticton, formerly the Lake City Casino Penticton, was relocated to the South Okanagan Events Centre in 2017. Construction on the new property started in May 2016, and the property opened in April 2017. The new, approximate 57,600 square foot property has approximately 32,500 square feet of gaming space, includes four F&B outlets (including MATCH and The Buffet), 400 slot machines and 11 table games, including one poker table. The current land lease at this site is due to expire on May 3, 2036 and has two approximately 10-year extension options.

Lake City Casino Vernon

The Lake City Casino Vernon is located in Vernon, British Columbia. The Lake City Casino Vernon was relocated to its current location in 2009, significantly increasing its size. In January 2014, we purchased the land on which the Lake City Casino Vernon is located. The current property is situated across the street from Vernon’s main shopping center and has good visibility and accessibility from Vernon’s principal highway. The approximate 32,000 square foot property consists of approximately 24,200 square feet of gaming space and includes 400 slot machines, 9 table games and three F&B outlets (a MATCH, The Buffet and a grab & go outlet).

CGCs

Our CGCs provide alternative gaming options, mainly in the form of slot machines, in smaller communities without casinos. In the Lower Mainland, we provide operational services for Chances Mission (Mission, British Columbia), Chances Squamish (Squamish, British Columbia), and Chances Abbotsford (Abbotsford, British Columbia). In the Vancouver Island region we provide operational services for Chances Campbell River (Campbell River, British Columbia), Chances Courtenay (Courtenay, British Columbia) and Playtime Gaming Victoria (Victoria, British Columbia). In total, our CGCs offer approximately 110,300 total square feet of space and 76,300 square feet of gaming space, accommodating 785 slot machines and 681 bingo seats.

We lease the premises for Chances Mission, which lease expires on September 30, 2019 with one remaining five-year extension option. Chances Squamish opened in January of 2010. We lease the premises for Chances Squamish, which lease expires on January 30, 2030 and has two 20-year extension options. We lease the premises for Playtime Gaming Victoria, which lease expires on December 31, 2018.

We invested approximately $7.5 million to expand Chances Courtenay and Chances Campbell River to add a MATCH and refresh the gaming floors.

Ontario Casinos

Western Fair District London Slots

The Western Fair District London Slots property is a slots property attached to a racetrack situated in London, Ontario, 190 kilometers from Windsor, Ontario (to the west) and the Greater Toronto Area (to the east). The approximate 78,100 square foot Western Fair District London Slots property is equipped with a new GMS, 767 slot machines and approximately 54,300 square feet of gaming space. The large, open casino floor includes

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two F&B outlets (a full service casual Getaway Restaurant and a casino bar). The Western Fair District London Slots property also has over 220,000 square feet of convention space, a sports complex with four ice surfaces and a Yuk Yuks comedy club. Additionally, the Western Fair District hosts several large concert events in the racetrack facilities and is home of “The Western Fair”.

Pending OLG and the necessary government approvals, we have significant plans for investment in the London market. We expect to invest approximately $80.0 million to develop a new facility at one of two sites we have identified within the City of London. Based on management’s estimates, this full service entertainment property is expected to host over 40,000 square feet of gaming space (excluding back of house) with over 900 slot machines and 46 table games. Non-gaming amenities are expected to include a MATCH, an Atlas, The Buffet and a large casino bar. The lease at the current Western Fair site is due to expire on March 31, 2020 and has two five-year extension options.

Point Edward Casino

The Point Edward Casino is one of our four casinos in the Province of Ontario and is currently the only site in the Southwest Bundle that offers live table games. It is situated on the banks of the St. Clair River, across the U.S. border from Port Huron, Michigan, and is just three kilometers from downtown Sarnia, Ontario. The approximate 78,600 square foot Point Edward Casino has approximately 54,300 square feet of gaming space and is equipped with 484 slot machines, 13 table games, including two poker tables. There are two F&B outlets at the Point Edward Casino, including a MATCH and The Buffet.

We are investing approximately $25.9 million in the Point Edward market and major renovations of this property are currently underway. This site was rebranded as Starlight Casino Point Edward and a MATCH was opened in July 2018. When completed in November 2018, this full service entertainment property is expected to host an expanded 24,000 square feet of gaming space (excluding back of house) with approximately 492 slot machines and 25 table games. A new GMS is also expected to be installed at the property.

Woodstock Raceway Slots

The Woodstock Raceway Slots property is a slots property attached to a racetrack, situated approximately 55 kilometers east of London, Ontario and 140 kilometers west of the Greater Toronto Area. The approximate 14,000 square foot property is equipped with a recently installed new GMS, 224 slot machines and approximately 12,300 square feet of gaming space and includes a small grab and go F&B outlet called The Getaway Express.

There is very little investment planned for this location in the immediate future. It is expected that this site will be rebranded as a Playtime Casino and the property will undergo minor renovations. The current lease at this site is due to expire on March 31, 2021.

Dresden Raceway Slots

The Dresden Raceway Slots property is a slots property attached to a racetrack, situated approximately 115 kilometers west of London, Ontario and 110 kilometers east of Windsor, Ontario. The approximate 14,000 square foot property is equipped with 154 slot machines and approximately 11,600 square feet of gaming space and includes a small grab and go F&B outlet called The Getaway Express.

We plan to relocate the existing gaming property within the same Municipality of Chatham-Kent, from Dresden to a newly built gaming and entertainment property, in an up-and-coming entertainment district with

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new restaurants, and a hotel and convention center. We expect to invest approximately $36.1 million in the new property. This site will be rebranded as the Cascades Casino Chatham and is expected to have over 17,400 square feet of gaming space (excluding back of house) with approximately 330 slot machines, based on management’s estimates, and table games along with a new GMS. Non-gaming amenities at this property are expected to include a MATCH, The Buffet, a grab & go outlet and a casino bar. Development of the new property began in July 2018 and is expected to be completed in the third quarter of 2019. The current lease at this site is due to expire on March 31, 2019.

Clinton Raceway Slots

The Clinton Raceway Slots property is a slots property attached to a racetrack, situated 80 kilometers northwest of London, Ontario. The approximate 14,700 square foot property is equipped with 123 slot machines and approximately 12,000 square feet of gaming space and includes a small grab and go F&B outlet called The Getaway Express.

It is expected that this site will be rebranded as a Playtime Casino. A new GMS system was installed in July 2018 and the property is currently undergoing a floor renovation and product refresh. The current lease at this site is due to expire on March 31, 2020 and has two five-year extension options.

Hanover Raceway Slots

The Hanover Raceway Slots property is a slots property attached to a racetrack, situated 105 kilometers northwest of Kitchener, Ontario and 60 kilometers south of Owen Sound, Ontario. The approximate 15,000 square foot property is equipped with 189 slot machines and approximately 13,600 square feet of gaming space. There are two F&B outlets, including the Coachman Restaurant and a casino bar.

Subject to OLG and the necessary government approvals, we plan to relocate the existing gaming property to an adjacent building. It is expected that this site will be rebranded as a Playtime Casino, a new GMS was installed in July 2018 and the property is currently undergoing renovations. We expect to invest approximately $18.0 million in the Hanover Raceway Slots. Work on the project began in July 2018 and is expected to be completed by the first quarter of 2019. The current lease at this site is due to expire on March 31, 2020.

Thunder Bay Casino

The Thunder Bay Casino, along with the Sault Ste. Marie Casino, is currently one of two sites in the North Ontario bundle that offers live table games. The approximate 46,500 square foot property is equipped with a recently installed new GMS, 450 slot machines and 11 table games, including two poker tables, and approximately 37,700 square feet of gaming space. There are two F&B outlets, including the full service casual Getaway Restaurant and a casino bar.

There is very little investment planned for this location in the immediate future. It is expected that this site will be rebranded as a Cascades Casino and the property will undergo minor renovations. Future plans may include conversion of the existing F&B outlet to a MATCH.

Sault Ste. Marie Casino

The Sault Ste. Marie Casino is one of our four casinos in the Province of Ontario and, along with the Thunder Bay Casino, is currently one of two sites in the North Ontario bundle that offers live table games. It is situated on the banks of the St. Mary’s River, minutes away from the shores of Lake Superior. The approximate 61,800 square foot property is equipped with 425 slot machines and 11 table games, including three poker tables, and approximately 51,700 square feet of gaming space. There are two F&B outlets, including the full service casual Getaway Restaurant and a casino bar.

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There is very little investment planned for this location in the immediate future. It is expected that this site will be rebranded as a Playtime Casino, a new GMS will be installed and the property will undergo minor renovations.

Sudbury Downs Slots

The Sudbury Downs Slots property is a slots property attached to a racetrack, situated 23 kilometers northwest of downtown Sudbury, Ontario in a small town called Chelmsford. The approximate 45,600 square foot property is equipped with 427 slot machines and approximately 33,000 square feet of gaming space and includes a small grab and go F&B outlet.

The lease at the current site is due to expire on March 31, 2020. In June 2017, we began the planning and approvals process for a multi-step, $55.5 million redevelopment and relocation of this property. We intend to relocate the existing gaming operation to a newly built gaming entertainment property located in Greater Sudbury and are in discussions with a landowner in Sudbury in respect of the acquisition and development of lands, which, subject to OLG and the necessary governmental approvals, will be located in the up-and-coming True North Strong entertainment district. While we have received initial municipal approval for the relocation of this property, an appeal of that decision has been filed in the Local Planning Appeal Tribunal by certain individuals and community groups which, if successful, would delay the proposed relocation pending further appeals or court challenges. Subject to extension by the tribunal, a first hearing is expected in summer 2019 with a decision due (at the earliest) by September 2019. There is no certainty over whether these individuals and community groups will be partially or wholly successful in obtaining the relief sought.

If relocation to the proposed site is approved, it is expected that this property will be branded as a Starlight Casino and have over 32,000 square feet of gaming space (excluding back of house) with approximately 600 slot machines and 21 table games along with a new GMS. Non-gaming amenities at this new Starlight Casino are expected to include a MATCH, a The Buffet, an Atlas and a casino bar.

See “Risk Factors—Risks Related to Acquisitions and Capital Projects—The expansion, rebranding and/or relocation of the Cascades Casino Langley, Chances Mission, Dresden Raceway Slots, Point Edward Casino, Western Fair District London Slots, Sudbury Downs Slots, Hanover Raceway Slots and Gateway Innisfil may not be completed on a timely basis, on anticipated terms or at all.”

Gateway Innisfil

Located in the community of Innisfil, Ontario, approximately 15 kilometers south of Barrie, Ontario, the approximate 87,000 square foot Gateway Innisfil property, formerly the OLG Slots at Georgian Downs, opened in November 2001 and currently offers approximately 29,500 square feet of gaming space, featuring 989 slot machines, live harness racing, simulcast wagering and two F&B outlets. Gateway Innisfil is the smaller of the two existing properties in the Central Bundle; however, the maximum allowable positions for slots and table games is expected to increase to 1,200 and 100, respectively, pursuant to the OLG’s modernization plan.

Subject to OLG and necessary government approvals, we intend to renovate and rebrand the Gateway Innisfil property as a Cascades Casino, eventually increasing slot machines to over 1,100 later in the year and adding approximately 26 table games, based on management’s estimates. We also plan to upgrade the current GMS system at the site. Construction began in the fourth quarter of 2018 and is expected to be completed in the first quarter of 2019. Total capital expenditure at Gateway Innisfil is expected to be approximately $5.0 million, based on management’s estimates.

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Casino Rama Resort

Casino Rama Resort is the larger of the two existing Central Ontario properties. It is located on reserve lands of the Chippewas of Rama First Nation, approximately five kilometers from the Trans-Canada Highway 12 (north of Lake Simcoe, Ontario). The Casino Rama Resort property opened in July 1996. The approximate 813,000 square foot property currently offers approximately 172,000 square feet of gaming space, featuring 2,517 slot machines and 101 table games, including 10 poker tables. In addition to gaming operations, Casino Rama Resort has a 289-room hotel with amenities, a 5,000-seat entertainment venue and nine F&B outlets. A new GMS will be installed at the property.

We intend to maintain the Casino Rama Resort brand.

Edmonton Casinos

Grand Villa Casino Edmonton

The Grand Villa Casino Edmonton is located in the new ICE District (which is expected to include over 1,300 multi-family units in three preliminary residential towers by 2020) and is the sole casino in downtown Edmonton, Alberta. Adjacent to Rogers Place and accessible by light rail transit, we have invested approximately $38.2 million in this property to enhance our gaming and entertainment amenities. The approximate 62,600 square foot Grand Villa Casino Edmonton offers approximately 39,600 square feet of gaming space, including 522 slot machines and 28 table games. It has several F&B outlets, including MATCH and Atlas. The current lease at this site is due to expire on September 30, 2036.

Starlight Casino Edmonton

The Starlight Casino Edmonton is situated in the West Edmonton Mall located in Edmonton, Alberta. The West Edmonton Mall is one of the world’s largest shopping centers with 30.8 million visitors annually and 24,000 employees, which drives considerable gaming traffic to the Starlight Casino Edmonton.

In September of 2018, we completed a $69.9 million rebranding and redevelopment of the Starlight Casino Edmonton (formerly the Palace Casino Edmonton). The redeveloped Starlight Casino Edmonton is approximately 123,100 square feet, including an expanded gaming floor of approximately 68,200 square feet, and feature 765 slot machines, 40 table games, including eight poker tables, and an electronic table game area with 47 gaming positions, in addition to entertainment and six F&B outlets. The current lease at this site is due to expire on August 31, 2037.

Our Proposed New Builds

Delta, British Columbia

The BCLC announced on September 7, 2017 that we were authorized to relocate our existing license in Newton to a new casino in Delta, British Columbia, subject to municipal approval. The Delta city council held a number of public hearings on the matter, and the proposed project received final municipal approval in August 2018. In conjunction with a third-party hotel contractor, we expect to jointly invest approximately $75.0 million in the project, with us investing approximately $55.0 million. Based on management’s estimates, construction is expected to start in the first quarter of 2019, following final approval from the BCLC, and be completed in late 2020. The new property is expected to have approximately 40,000 square feet of gaming space, include multiple F&B outlets, approximately 500–600 slot machines and 30 table games, including six poker tables. We expect to engage a third party to build and operate a hotel at the property. The Delta property is expected to be branded a Cascades casino. We have entered into an option to lease and plan to enter into a 30-year lease with three 10-year renewal options that will commence once the construction starts.

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Kenora, Ontario

The City of Kenora is located in the far northwest corner of Ontario near the Manitoba border. There are no existing casinos within this market area. There are two major access routes to the area, Trans-Canada Highway 17 traversing through Kenora and King’s Highway 17A (Kenora By-Pass). Given Kenora’s unique location on the north shore of Lake of the Woods, it is also positioned to capture existing tourism to the region. Known as the premier boating community in North America, the Kenora District attracts over 700,000 visitors annually and 20,000 cottagers who are seasonal residents in the region in addition to approximately 15,000 full-time residents.

Subject to OLG, and necessary government approvals, we plan to build a new 19,000 square foot Playtime Casino in the Kenora area (Playtime Casino Kenora), with 6,200 square feet of gaming space, including 200 slot machines. We plan to install a MATCH overlooking the gaming floor. Playtime Kenora is anticipated to open in January 2020, with total capital expenditure expected to be approximately $21.0 million based on management’s estimates.

North Bay, Ontario

The City of North Bay, which does not have an existing gaming property, is the eastern-most location in the North Ontario bundle. It is located 125 kilometers from the property being proposed in Sudbury, Ontario and it is anticipated that the two properties will share a certain portion of their respective databases. Located 330 kilometers north of Toronto, Ontario, North Bay is situated on the north shore of Lake Nipissing. The City of North Bay contains approximately 56,000 eligible adult gamers, comprising 81% of the overall population.

Subject to OLG, and the necessary government approvals, we plan to construct a new 37,000 square foot Cascades Casino in North Bay, with approximately 14,100 square feet of gaming space, including 300 slot machines and 10 table games. We plan to install a MATCH, as well as a bar and The Buffet. Cascades North Bay is anticipated to open in the first quarter of 2020, with total capital expenditure expected to be approximately $31.3 million.

Wasaga Beach

There is currently no gaming property located in the Wasaga Beach gaming zone. The gaming zone covers parts or all of the communities of Collingwood, Ontario, Wasaga Beach, Ontario, Springwater, Ontario and Clearview, Ontario, with a combined regional adult population of approximately 33,000. Pursuant to the OLG’s modernization plan, allowable slot machine and table game positions for this gaming region are 300 and 120, respectively.

Subject to OLG and necessary government approvals, we intend to construct a Playtime property in Wasaga Beach, on the southern edge of Georgian Bay, including an expected 10,560 square foot gaming floor, 273 slot machines and 10 table games. Based on management’s estimates, the proposed Wasaga Beach property is also expected to include a MATCH and The Buffet. Management expects construction to begin in the first quarter of 2019 and the new property is expected to become operational in the third quarter of 2020. Based on management’s estimates, the total capital expenditure for our proposed Wasaga Beach property is expected to be approximately $30.0 million.

The preceding property descriptions discuss current and projected acquisitions. See “Risk Factors—Risks Related to Acquisitions and Capital Projects—While we intend to complete the gaming properties in Kenora, North Bay, Delta and Wasaga Beach on schedule, these properties may not be completed on a timely basis, on anticipated terms or at all due to unforeseen factors.”

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OUR INDUSTRY

The Canadian gaming market is comprised of casino gaming, lottery, online gaming and horse racing. We operate in the casino gaming segment, which consists of slots, table games and bingo. The casino gaming market in Canada is characterized by several unique features.

Public-Private Relationships Create a Stable Regulated Environment

In British Columbia, Ontario and Alberta, provincial Crown corporations (the BCLC, OLG and AGLC, which we collectively refer to as the Gaming Authorities) and regulatory bodies (the GPEB, AGCO and AGLC, which we collectively refer to as the Gaming Regulators) oversee the gaming industry and license private service providers to operate casinos within each of their respective provinces. Casino gaming generates considerable revenue for the provinces and supports a wide range of local volunteer and community-based initiatives. As a result, provincial governments are significant stakeholders in the Canadian casino gaming industry, creating a mutually beneficial and collaborative relationship between public and private sector participants. During the year ended March 31, 2017, the provincial governments in British Columbia, Ontario and Alberta earned the following profits from casino gaming operations:

Casino Gaming Profits Attributable to the Province⁽¹⁾

(in $ millions)

Source: BCLC, OLG & AGLC.

Note:    (1) Represents BCLC net income for casino and community gaming segment (British Columbia), OLG net income plus Win contribution for Resort Casinos Segment and Slots and Casinos Segment (Ontario) which later became the Land-based Gaming Segment (Ontario) and AGLC gaming net operating result / contribution to the Alberta Lottery Fund (Alberta).

In British Columbia and Alberta, the BCLC and AGLC, respectively, are responsible for providing and maintaining slot machines located within each private gaming service provider’s properties. To maximize revenue from these machines, policies have been created and implemented to manage competition between gaming properties. In Alberta, the AGLC has declared an indefinite moratorium on granting new casino licenses. In British Columbia, the BCLC, in conjunction with host local governments, controls the implementation of new gaming positions to ensure that markets are neither over saturated nor under served. In Ontario, the OLG manages competition by delineating geographic gaming zones in which only a single gaming property may be operated. These gaming zones have been grouped together into larger gaming bundles, where one service provider is granted the exclusive right to provide gaming services. New casino properties must also be approved at the municipal level. This process involves considerable consultation with the public, including one or more public hearings.

Long-Term Operating Agreements and Licenses Provide Visibility into Stable Future Operating Environment

The long-term operating agreements (in British Columbia and Ontario) and licenses (in Alberta) under which service providers are engaged by the Gaming Authorities are mutually beneficial for Gaming Authorities and service providers. Gaming Authorities benefit from long term partnerships with reliable and experienced

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service providers that maintain high quality gaming properties and the ability to expand them to meet increases in market demand. Service providers benefit from a stable, long-term operating environment, which reduces property investment risk. The terms of the licenses and operating agreements also provide service providers with basic information necessary to forecast future gaming taxes, commissions and competitive conditions, which can be analyzed to develop effective future operating and investment strategies.

Gaming Markets in Canada Are Attractive and Resilient

We operate in the provinces of British Columbia, Ontario and Alberta. These provinces account for approximately 64% of the Canadian population and are the three largest Canadian gaming markets with private sector participation.

Over the past five years, the markets in which we operate have experienced growth in gaming revenue comparable to both the Las Vegas Strip and U.S. locals markets. However, Canadian gaming markets tend to be much more localized as compared to more tourist-driven markets such as the Las Vegas Strip. Locals-driven markets generally attract a more consistent flow of casino patrons over time, leading to greater stability as measured by total wagers net of prizes paid, or Win. While Ontario’s historical gaming revenue growth has been muted, the recent opening of the market to private service providers is expected to accelerate growth in the province’s gaming industry. The following chart demonstrates the resilience (as indicated by lower peak to trough declines relative to more tourist-based U.S. gaming markets) and growth of the Canadian gaming markets in which we operate:

Comparison of Our Markets to Top Five U.S. Locals-Driven Markets and Las Vegas Strip

Sources: OLG, BCLC, AGLC, UNLV, Nevada Gaming Control Board, Pennsylvania Gaming Control Board, Louisiana Gaming Control Board, Illinois Gaming Board.

Notes:    (1) 2017 U.S. gaming revenue is presented for the last twelve months as of March 31, 2017 and assumes an exchange rate of $1.31 per US$1.00, representing the average exchange rate from April 1, 2016 to March 31, 2017.

(2) Peak to trough decline is calculated as the percentage change between fiscal year 2010 and fiscal year 2008 for the change between calendar year 2009 and calendar year 2007 for the U.S. markets. Canadian fiscal year end is March 31.

(3) Alberta data includes VLTs.

(4) Five largest locals driven markets include Nevada (excluding contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey. The data for Pennsylvania, Louisiana, Illinois and New Jersey is presented for the last twelve months as of March 2017.

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British Columbia Market

According to the BCLC, the British Columbia gaming industry consists of 15 casinos, two racehorse casinos, 18 CGCs and five commercial bingo halls. As of March 31, 2018, the casinos and racehorse casinos operated 10,717 slot machines and 528 tables, while the CGCs operated 2,871 slot machines.

During the twelve-month period ended March 31, 2018, the casino sector accounted for approximately 60% of total gaming industry revenue of approximately $3.3 billion. This represents a $123.2 million year-over-year increase. Slot machines consisted of approximately 70% of total casino sector revenue, table games consisted of approximately 25% of total casino sector revenue with the remainder coming from poker and bingo. Revenue from slot machines grew $88.8 million representing a 6.9% year-over-year increase while revenue from tables increased $4.6 million, representing a 0.9% year-over-year increase.

In fiscal years 2017 and 2018, 51% of adults in British Columbia (ages 19 and up) played a BCLC game at least once a month. This is consistent with strong acceptance and participation numbers in previous years.

Alberta Market

Alberta has a population of over 4.3 million people, and has had an average annual population growth rate of 2% from 2007–2017.

According to the AGLC, in fiscal years 2016–17, there were 19 traditional casinos, four racing entertainment centers, or RECs, five host first nation casinos and 22 bingo facilities throughout Alberta. Six of these facilities were located within Edmonton. Throughout Alberta there were 14,281 slot machines (including RECs), with 4,616 slots within Edmonton. This represents 32% of the total slots throughout the Alberta region. In total, Alberta generated $1.4 billion in net revenue from provincial gaming with casino gaming terminals generating $1.1 billion in net sales.

Ontario Market

Ontario has a population of over 14 million people, has had an average annual population growth rate of 1% from 2007–2017 and is Canada’s most populous province with approximately 39% of the country’s population. Ontario’s unemployment rate was 5.4% in July 2018, the lowest level since July 2000, and was 5.6% as of October 2018. Real GDP growth rate is forecast to be 2.7% in 2017 and 2.0% in 2018.

In early 2012, the OLG announced a “Modernizing Lottery and Gaming in Ontario” initiative, or the OLG Modernization Plan, with the goal of increasing revenue for the Province of Ontario. As a result, the OLG bundled all slots at racetracks and casino operations, with the exception of Caesars Windsor, into eight gaming bundles. The Southwest, North and Central Bundles were awarded to us. As of October 2018, each of the eight bundles has been awarded to various proponents. A strategy for Caesars Windsor is currently under development.

We have the exclusive right to operate casino gaming within the geographic boundaries of the gaming zones in the gaming bundles for which we are the service provider, subject to certain limited rights of OLG to permit charitable and other gaming within such zones and to modify the boundaries of such zones, all as more particularly set out in each casino operating and service agreement, or COSA.

According to the OLG, in fiscal year 2017–18, the OLG generated approximately $7.58 billion in total revenue and approximately $2.49 billion in net profit for the province of Ontario. Forty-seven percent of total revenue was generated from land-based gaming. Thirty-seven-point-seven million patrons visited Ontario’s land-based gaming facilities representing a year-over-year increase of 1.1%.

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Significant Growth Opportunity for Private Service Providers in Ontario

Although casino gaming has been a popular form of entertainment in Ontario since the OLG opened its first casino in 1994, until recent years, casino gaming win in the province was stagnant, as illustrated in the following chart:

Historical Casino Gaming Win in Ontario – Last Ten Years⁽¹⁾⁽²⁾

(in $ billions)

Source: OLG.

Notes:    (1) Represents OLG combined revenues for the Resort Casinos Segment and Slots and Casinos Segment. In fiscal years 2017–2018, OLG reported Resort Casinos and Slots and Casinos as a single business line referred to as Land-Based Gaming.

(2) Results for fiscal years 2009 and 2010 were prepared in accordance with Canadian GAAP and were before promotional allowances. Results for fiscal years 2011 to 2018 were prepared in accordance with IFRS.

In 2010, the Government of Ontario directed the OLG to begin a strategic review of the province’s gaming industry. This review resulted in several recommendations, including that the OLG become more customer-focused and expand regulated private sector delivery of casino gaming. In particular, the OLG noted that several properties are currently located in remote, sparsely populated areas. Furthermore, many properties currently contain slot machines, but lack table games and have minimal entertainment or F&B options, lowering their appeal to players under the age of 45.

To date, the OLG has grouped 28 gaming zones into eight gaming bundles and has commenced the process of awarding service providers the exclusive right to provide gaming services in each of these bundles through a competitive procurement process. The first OLG bundle was awarded to a private service provider in September 2015 and, as of the date of this prospectus, all eight bundles have been awarded.

Under the new model, the service provider for a particular bundle can add additional slot machines and table games up to the maximum limits prescribed in the applicable operating agreements. In addition, the service provider can propose to add table games to a slots-only property, relocate an existing property, where permitted, within the zone it serves or build a new property in a zone without an existing property, subject to the approval of OLG and the Ontario provincial government of a viable business case. Also, municipal approval is required before table games are added to a slots-only property or development begins on a new property or a relocated property.

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British Columbia

British Columbia is Canada’s third largest province with an estimated population of over 4.9 million people as of September 2018. The province is also one of Canada’s largest casino gaming markets with $1.8 billion in aggregate casino and CGC Win for the year ended March 31, 2017. For this period, the BCLC generated revenue from the following activities:

Total Gaming Win by Channel	Casino Revenue Before Prizes by Channel

Source: BCLC.

Casino Win in British Columbia grew at a CAGR of 2.7% for the 10 year period ended March 31, 2017 and the BCLC is forecasting a CAGR of 1.5% from the year ended March 31, 2017 to March 31, 2020. The following chart presents annual gaming revenue in British Columbia:

Historical and Forecast Casino Revenue Before Prizes Win in British Columbia⁽¹⁾

(in $ billions)

Source: BCLC 2018/19-2020/21 Service Plan dated February 2018.

Notes:    (1) Represents BCLC revenues for the casino / CGC segment.

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As of September 30, 2018, there are 39 gaming properties in the province of British Columbia. According to the BCLC, our British Columbia properties include 41% of all slot machines and 40% of all table games in casinos within the province. British Columbia can be further divided into five distinct gaming markets. The total number of gaming positions in the province, along with our share of positions in each market, is highlighted in the table below:

Gateway British Columbia Gaming Positions as a Percentage of Total Regional Market as of September 30, 2018⁽¹⁾

Market	Total Gaming Positions		Gateway Gaming Positions		Gateway % of Total
Lower Mainland		10,386		4,484		43.17	%
Thomson-Okanagan		2,590		1,949		75.25	%
Vancouver Island		2,000		350		17.50	%
Northern BC		1,346		0		0.00	%
Kootenays		359		0		0.00	%
Total British Columbia		16,681		6,783		40.66	%

Notes:    (1) This table includes poker tables and assumes six gaming positions per table.

The BCLC owns all slot machines in the province and enters into agreements with private service providers to establish and provide operational services at the properties in which these slot machines are hosted for periods of up to 20 years (with an option to extend for an additional five years, exercisable by the BCLC and subject to certain terms and conditions). Service providers and the BCLC share Win from slots and other games in prescribed percentages based on the type of gaming activity. Other non-gaming revenue streams generated at gaming properties in British Columbia, including F&B, hotel and entertainment, are 100% attributable to the service provider. This division is outlined below:

Notes:    (1) Bingo games win calculated as 90% of weekly bingo games win on the first $10,000 of weekly bingo games win; 45% of weekly bingo games win in excess of $10,000 bingo games win; 60% of weekly bingo paper side games win; and 25% of weekly electronic pull tabs (BETS) win.

(2) 25% of slot machine win, less 25% of BCLC’s cost to lease slot machines and electronic gaming tables.

(3) 40% or 42.5% of standard table games win, as prescribed by the BCLC. 42.5% for regular limit table games win and 40% for high limit table games win.

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Under Facility Development Commission, or FDC, and Accelerated Facility Development Commission, or the AFDC, programs, British Columbia service providers were eligible to receive an additional 3% and 2%, respectively, of net win generated at their properties up to the amount of total eligible development expenditures incurred, including expenditures related to non-gaming amenities. Pursuant to the new OSAs, the Minimum Investment Requirement (“MIR”) program has replaced the FDC and AFDC programs. Under the MIR program, service providers are required to make minimum investments (generally in an amount equal to 5% of Net Win for the year ended March 31, 2018 multiplied by 20 years) in their properties throughout the terms of the OSAs and in return, the BCLC will pay an additional commission to service providers at a rate of 5% of Net Win.

Ontario

Ontario is Canada’s largest province with an estimated population of over 14.3 million people as of September 2018. Ontario is also Canada’s largest gaming market and North America’s fourth largest gaming market, generating $3.46 billion in annual casino Win and $7.5 billion in total revenue (gaming and non-gaming) for the year ended March 31, 2017. The following chart illustrates the division of OLG total revenues by gaming activity:

OLG Total Revenue by Channel

(year ended March 31, 2017)

$7.5 billion total revenue

Source: OLG.

The OLG currently generates revenue from four large casinos targeting destination visitors, which we refer to as the Resort Casinos Segment, and 22 casinos oriented towards the local market, which we refer to as the Slots and Casinos Segment. The OLG has played a central role in the development and operation of the Slots and Casinos Segment gaming properties since their inception and has only recently begun to increase the role of private sector service providers.

Due to a lack of investment, slot machine focus and increased cross-border competition, casino Win in Ontario declined between the fiscal years ended March 31, 2006 and March 31, 2015, primarily within the Resort Casino Segment. Casino Win in the more locally focused Slots and Casinos Segment was flat over the same period, though investment in these properties was also minimal. In the two fiscal years since March 31, 2015, casino revenue before prizes has grown at a 5.0% CAGR.

The OLG forecasts that gaming revenue in its Resort Casinos Segment will decline at a CAGR of 0.9% for the four-year period to March 31, 2021 while revenue in its Slots and Casinos Segment will grow at a CAGR of 6.4% over the same period. This equates to an overall CAGR of 3.7% for all Ontario casino gaming operations.

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The following chart presents annual casino revenue before prizes in Ontario for the 10-year period ended March 31, 2017 as well as the forecast to March 31, 2021:

Historical and Forecast Casino Revenue Gaming Win in Ontario⁽¹⁾⁽²⁾

(in $ billions)

Source: OLG.

Notes:    (1) Represents OLG combined revenues for the Resort Casinos Segment and Slots and Casinos Segment. In 2017-2018, the OLG reported Resort Casinos and Slots and Casinos as a single business line referred to as Land-based Gaming.

(2) Results for fiscal years 2009 and 2010 were prepared in accordance with Canadian generally accepted accounting principles, or Canadian GAAP, and were before promotional allowances. Results for fiscal years 2011 to 2018 were prepared in accordance with IFRS.

The Ontario market is relatively underpenetrated compared to the other Canadian gaming markets in which we operate. As illustrated in the chart below, for the year ended March 31, 2017, gaming revenue per capita was 104% higher in Alberta than in Ontario and 50% higher in British Columbia:

OLG Modernization Plan

As a result of declining casino gaming receipts, in 2010 the OLG launched a strategic business review that included consultations with stakeholders and an extensive business analysis. The resulting modernization report identified multiple factors explaining declines in land-based gaming revenue, including:

• an orientation towards slot machines, which have less appeal than table games to patrons under 45;

• a lack of investment in technology to keep pace with the industry; and

• a decline in cross border patrons due to increased competition from casinos in bordering U.S. states.

The strategic review reached the conclusion that the role of private sector service providers should be expanded. To implement this recommendation, the OLG divided 28 gaming zones into eight gaming bundles and awarded these bundles to service providers through a competitive procurement process. Within each bundle, the OLG awards the winning service provider the exclusive right to operate gaming properties.

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According to the new policies implemented under the OLG modernization plan, gaming proceeds are shared between services providers and the OLG as follows:

Roles of Service Providers and OLG in Ontario

The COSA contains a covenant by Gateway to realize revenue in each operating year that is equal to or greater than a set “Threshold”, or to pay to OLG the difference. The Threshold for each of the first 10 operating years is a fixed amount that was set out by Gateway during the RFP process and incorporated into the relevant COSA. After the initial ten years, the threshold for each subsequent year of the operating term is calculated based on a formula that takes into account the revenue generated in prior years, the difference between the Threshold for prior years and the revenue generated in such years, and inflation.

Alberta

Alberta is Canada’s fourth largest province with an estimated population of over 4.3 million people as of September 2018. Alberta is also the third largest casino gaming market in Canada. Alberta generated annual Win in excess of $2.1 billion dollars for the year ended March 31, 2017. Win during this period was generated from the following activities:

Total Gaming Win by Channel(1)	Charity Gaming Win by Channel(2)

Source: AGLC.

Notes:    (1) Slots represents credits played less credits won for casino gaming machines as reported by AGLC.

(2) Represents total gross less prizes / winnings. Table games represents casinos segment of AGLC charitable gaming segment.

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The following chart presents annual Win in Alberta for the 10 year period ended March 31, 2017:

Historical Gaming Win in Alberta⁽¹⁾

(in $ billions)

Source: AGLC.

Notes:    (1) Represents AGLC reported credits played less credits won from casino gaming terminals, VLTs and electronic bingo plus total gross less prizes / winnings for charitable gaming.

The AGLC licenses the operation of casinos to third-party gaming service providers and licenses charities to hold casino gaming events. In return for operating gaming properties and conducting casino events on behalf of licensed charities, service providers receive a certain percentage of Win, with the remainder distributed to the Alberta Lottery Fund/AGLC and the charity whose gaming event is being facilitated.

The following figure illustrates the commission on gaming proceeds received for operations in the Edmonton, Alberta market:

Roles of Service Providers and AGLC in Alberta

Prospective service providers are able to apply for a gaming license in Alberta through an eight-step process. However, since 2008, the AGLC has deferred consideration of any new casinos and racing entertainment centers in the province. In February 2015, the AGLC announced that it would be extending this moratorium on new licenses indefinitely.

Within Alberta, we operate exclusively within the city of Edmonton. As of March 31, 2017, the AGLC reported that there were a total of eight casinos in the city of Edmonton and 5,692 casino slot machines. We operate two of these casinos, both of which are located in prime, high-traffic entertainment districts.

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INVESTMENT HIGHLIGHTS

Leading and Diversified National Gaming Footprint

We are one of the largest and most diversified gaming and entertainment companies in Canada, with an attractive portfolio of gaming and entertainment properties. We have a leading market position in each of the markets in which we operate:

• British Columbia: According to the BCLC, our British Columbia properties include 41% of all slot machines and 40% of all table games in the province and we are one of the largest gaming service providers based on both number of properties and gaming positions. We provide operational services at six of the 14 gaming properties in the Lower Mainland (which includes the largest population center in British Columbia, the GVRD). We also provide operational services at three of the nine gaming properties on Vancouver Island and are the only service provider with casinos in the Thompson-Okanagan region of British Columbia, where we provide operational services at properties located in Kelowna, Vernon, Penticton and Kamloops.

• Ontario: We are currently the exclusive service provider in three gaming bundles in Ontario (the North, Southwest and Central Bundles), containing 11 properties in total and the right to develop two new gaming properties in the North bundle (in North Bay and the Kenora area), which we expect to open in the first quarter of 2020, and a third gaming property in the Central Bundle (in Wasaga Beach), which we expect to open in the third quarter of 2020. Upon completion of the North Bay, Kenora area and Wasaga Beach properties, we will operate 14 properties in Ontario.

• Edmonton: We are one of the largest casino operators in the Edmonton region, where we operate the Starlight Casino Edmonton and the Grand Villa Casino Edmonton, which together contain 22% of the region’s slot machines. The Starlight Casino Edmonton, which completed a major renovation and expansion in September 2018, is located in the West Edmonton Mall, North America’s largest mall with approximately 30.8 million visitors per year and 24,000 employees. The Grand Villa Casino Edmonton is the only casino in downtown Edmonton and is located within the new ICE District, adjacent to the recently constructed Rogers Place, home of the Edmonton Oilers.

As illustrated in the following charts, our recent expansion into the Ontario market has greatly diversified our revenues by region:

Revenue by Region as at December 31, 2016⁽¹⁾⁽²⁾ (as % of revenue for twelve months ended December 31, 2016)     Revenue by Region as at December 31, 2017 (as % of revenue for twelve months ended December 31, 2017)  

Notes:    (1) Lower Mainland properties include Grand Villa Casino Burnaby, Starlight Casino New Westminster, Cascades Casino Langley, Chances Mission, Chances Squamish, Chances Playtime

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Abbotsford, Newton Community Gaming Centre (which ceased operations effective April 2018) and Chances Playtime Langley (which ceased operations effective February 2018).

(2) The financial information on which this graph is based has been derived from our financial statements for the year ended December 31, 2016.

(3) The information presented in this chart is based on our unaudited pro forma financial statements, which have been derived in part from financial information prepared or provided by the OLG. See “Risk Factors—Risks Related to our Business—The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of unaudited combined schedules of revenue and direct expenses only and does not represent complete financial statements; care should be taken when relying upon such information.”

Attractive and Resilient Industry

Long-term licenses (in Alberta) and operating agreements (in British Columbia and Ontario) contribute to the stability of our markets while providing us with high visibility into our future operating environment.

The markets in which we operate are also locals-driven with strong growth characteristics. Based on our carded customer database, on average, 88% of our play in British Columbia comes from within 30 km of the property, with 95% for Grand Villa Casino Burnaby and 96% for Starlight Casino New Westminster. In Ontario, excluding Casino Rama, approximately 80% of our carded play comes from within a 40 km radius. We consider the local area in Ontario to have a wider radius than in British Columbia, as properties are located in rural communities and there is a greater distance between properties. Given this, and our knowledge of our patrons, we believe that the vast majority of our patrons come from each property’s local area and that this provides us with greater stability in our revenue as compared to other gaming companies that operate primarily in tourist-oriented gaming markets.

Proven Strategies to Enhance the Experience of Our Local Customers

To serve our primarily local gaming customers, we integrate gaming, F&B and other entertainment offerings to create exciting local entertainment destinations. In particular, we design marketing strategies to attract new or casual players to our properties while increasing frequency of visit and spend per visit of our core gaming customer segment. This also allows us to diversify our revenue streams.

Central to our strategy of attracting new and casual players to our properties are our proprietary F&B brands. For example, MATCH serves as an important attractor in local markets, providing a family-friendly environment with live entertainment, a focus on sports programming and contests, and outdoor patio spaces positioned at the front of properties where possible.

Over recent years, we have successfully integrated MATCH and other proprietary F&B offerings into several of our properties across Western Canada. At our Starlight Casino New Westminster, Cascades Casino Langley and Lake City Casino Vernon properties, we have spent an aggregate of $12.9 million, 95% of which was recoverable under the BCLC’s former FDC and AFDC programs to construct and implement our proprietary F&B focused projects. Our minimum investment requirements under the BCLC’s new Minimum Investment Requirement, or MIR, program in effect as of April 1, 2018 are reduced by an amount equal to our carry forward balance under the FDC and AFDC programs. Relative to the four quarter period prior to construction start, the four quarter periods following construction completion have shown average increases in annual revenue of 15.7%, including a 10.3% average increase in our gaming revenue.

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We have also developed targeted marketing and loyalty programs that are central to retaining the loyalty of our core gaming customers. These strategies have been instrumental in increasing visitation and spend per visit among customers in our core gaming segment:

• Targeted Marketing Initiatives Using Player Data: Our gaming management system, or GMS, is our single most powerful marketing and analytics tool. It allows us to analyze player data to better understand our customers, so that we can tailor marketing initiatives and rewards to individual players based on their playing patterns. We are in the process of implementing a new GMS in Ontario, which began with implementation at our Gateway Casino Woodstock property in February 2018. Rollout of GMS to our remaining Ontario properties is expected to continue through 2019.

• Promoting Customer Loyalty Programs to Increase Visitation: In British Columbia, we participate in the BCLC’s “Encore Rewards” customer loyalty program. Through this program, we market targeted product offerings to our player database to encourage repeat visits to our properties. This program also contributes to our understanding of our customers’ play patterns and allows us to target marketing messages and reward specific groups of players through our player database. In Ontario, we currently participate in the OLG’s “Winner’s Circle” program at sites that have not converted to our GMS. Under this program, participants earn tier points and cashback points based on their play at our Ontario properties (1 of each point per $10 played at slots, $20 played at video poker and $40 played on select electronic table games). Tier points allow players to earn cashback and F&B comps that increase based on whether they are in the “Rewards”, “Silver” or “Gold” tier. We are in the process of launching our own proprietary loyalty program in Ontario, called My Club Rewards, to coincide with the introduction of the new GMS and we have launched at Woodstock, London, Hanover, Clinton and Thunder Bay. The Winner’s Circle program is expected to end fully at our properties in the fall of 2019.

Our marketing initiatives, combined with organic market growth and property enhancements, have contributed to a significant increase in slot revenue in recent years. For example, our Slot Win has increased by 40.9% over the four-year period ended September 30, 2018 at our three GVRD casinos (Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley). Our Slot Coin-In, for carded customers only, at our three GVRD casinos also increased by 54.9% and carded visits increased by 20.8% over the same period.

Since the acquisition of the North and Southwest Bundles, we began introducing marketing and loyalty programs based on our proven approach in Western Canada. In the North and Southwest Bundles, we have increased the active customer base from approximately 181,000 members as of April 30, 2017, to approximately 221,500 members as of October 31, 2018, an increase of 22.6%. We attribute this increase to new sign-ups, more effective use of the database and improved customer segmentation. Since the acquisition of these bundles, our promotions have realized an overall redemption rate of 55%, the percentage of loyalty program points redeemed stands at 98%, Average Monthly Net Win for loyalty program participants has increased from $16.6 million to $19.3 million, an average increase of 16% per month, and average monthly visitation has increased from approximately 200,942 to approximately 206,325, an average increase of 2.7% per month.

Strong Free Cash Flow Conversion

We have a strong Free Cash Flow Conversion ratio. For the nine months ended September 30, 2018, we generated total revenue of $484.3 million, income and comprehensive income of $156.2 million, Adjusted EBITDA of $122.6 million and Free Cash Flow of $72.1 million, resulting in Free Cash Flow Conversion of 58.8%. For the year ended December 31, 2017, we generated total revenue of $478.8 million, a loss and comprehensive loss of $65.1 million, Adjusted EBITDA of $144.2 million and Free Cash Flow of $69.4 million, resulting in Free Cash Flow Conversion of 48.1%. This can be partially attributed to the following aspects of our business:

No Obligation to Purchase or Maintain Slot Machines in British Columbia and Alberta: As the BCLC and the AGLC own or lease all slot machines in our British Columbia and Alberta properties, we incur significantly

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lower expenses related to the maintenance of gaming equipment as compared to gaming companies that are required to purchase, finance or lease their own gaming equipment (such as many of our North American peers). Assuming a refresh cycle of six years, management estimates that we save approximately $20.0 to $30.0 million per year on slot machine equipment and maintenance at our British Columbia and Alberta properties.

Additional Commissions Related to the Majority of Our Growth Capital Expenditures in British Columbia. All of our British Columbia properties (other than Playtime Gaming Victoria) are entitled to earn additional commissions from the BCLC for both eligible gaming and other eligible capital expenditures at a rate of 5% of Net Win through the MIR program. These commissions are captured as revenue and they increase Adjusted EBITDA, but they do not affect reported capital expenditures, the commissions therefore increase our Free Cash Flow profile but do not improve our Free Cash Flow Conversion ratio. The commissions described above replace the BCLC’s FDC and AFDC programs, which entitled us to be compensated at a rate of up to 5% of Net Win for eligible capital expenditures that occurred prior to April 1, 2018. From 2011 through March 31, 2018, we have spent $204 million on capital expenditures, $180 million (representing 88%) of which entitled us to compensation under the FDC and AFDC programs. Historically, we have been reimbursed 100% of the approved FDC and AFDC expenditures by the BCLC to the extent of 3-5% of Net Win. Our minimum investment requirements under the new MIR program are reduced by an amount equal to our carry forward balance under the FDC and AFDC programs.

For our operations in Ontario, we are entitled to Permitted Capital Expenditures Allowance, payable by the OLG, for approved and eligible capital expenditures incurred in the Southwest, North and Central Bundles, as per the terms set forth in the COSAs. Permitted Capital Expenditures are recorded as part of gaming revenue.

We believe Free Cash Flow and Free Cash Flow Conversion are meaningful to investors as they are useful measures of performance and we use these measures as an indication of the strength of our business model and our ability to generate cash. For more information about Free Cash Flow Conversion and Adjusted EBITDA, see the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in this prospectus. See “Selected Summary Historical Financial Information” for a reconciliation of the foregoing non-IFRS measures to their most directly comparable measures calculated in accordance with IFRS.

Experienced Management Team and Dedicated Employees with a Proven Track Record

We have a highly experienced senior management team with a proven track record. Our management team, led by our President and Chief Executive Officer, Tony Santo, has over 100 years of combined experience in the gaming industry. Mr. Santo has over 35 years of experience in the gaming industry, including in senior management positions at Caesars Entertainment Inc. and Harrah’s Entertainment Inc. Together with our dedicated employees, we have an impressive track record of growing our business by expanding existing properties, developing new properties and completing accretive acquisitions. Critical to this success is a team that brings a deep understanding of the Canadian gaming and entertainment landscape combined with excellent relationships with various levels of government and the communities in which we operate. Over the past five years, our team has grown our portfolio from 12 to 26 gaming properties and led our successful expansion into new markets in Ontario and Vancouver Island.

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OUR GROWTH STRATEGIES

Expand, Relocate, Renovate and Improve our Existing Properties in Western Canada

We expect to continue to expand and diversify our revenue stream through property expansions, relocations, renovations and the deployment of proprietary F&B offerings. We have generally been able to drive significant improvements in customer experience and to increase traffic and average Win per visit through these types of capital projects. We expect these efforts to ultimately result in increased gaming, F&B and entertainment revenues at our properties.

The following table outlines initiatives currently in progress at our operations in British Columbia and Alberta. Overall, we plan to spend a total of $25 million to $30 million (including amounts spent to date in 2018), which is expected to be funded through a combination of cash on hand and operating cash flow, to complete these initiatives. We anticipate funding the planned capital expenditures by using cash on hand plus operating cash flow as well as the available capacity under our revolver to manage timing differences in cash flow. We do not anticipate requiring additional capital to complete these initiatives.

Growth Projects Currently Underway in Western Canada

Property	Growth Initiative	Anticipated Property Impact										Estimated Completion		Estimated Spend
		Total ft2 Added			Increase in Slots			Increase in Tables			New F&B
Cascades Casino Langley	Expansion and hotel renovation		12,000			75	(1,2)		3	(2)	•  Atlas		Q2 2019	$	18.6 million
Mission	Relocation and expansion		32,000	(3)		100	(2)		6	(2)	•  MATCH •  The Buffet		Q4 2019	$	8.0 million

Notes:    (1) As of the third quarter of 2018, 50 slot machines have already been installed.

              (2) Slot and table game numbers for the proposed growth projects are subject to BCLC final approval.

              (3) Represents new building square footage.

We will continue to employ strategies designed to improve operational efficiency at our existing properties. We regularly analyze our product mix, floor layout, Slot Win per machine, Table Win per day, occupancy rates and traffic patterns to optimize revenue and maximize floor space at our properties. For example, as part of a broader renovation at the Grand Villa Casino Burnaby, we expanded our gaming area, which allowed us to add 47 new penny slot machines and up to 10 new table games. Within the first six weeks of implementing these changes, the new penny slots produced almost twice the floor average Win per slot machine.

Deploy Proven Strategies at Our Recently Acquired Ontario Properties

We believe we have significant opportunities to increase revenue and Adjusted Property EBITDA at our Ontario properties by implementing our proven marketing, operational and development strategies. We are currently undertaking the following initiatives to grow gaming revenue and improve profitability at our Ontario properties:

• Introducing the Industry’s Newest Slots and Adding More Premium Branded Games. As was identified by the OLG’s modernization report, the gaming technology used in Ontario gaming properties has failed to keep pace with the industry. In the limited time we have owned these properties, we have already experienced positive results by updating our Ontario gaming equipment. Changes made to our slot strategy and product at our refreshed Southwest Ontario and North Ontario properties have driven our Slot Win rate up by approximately 3.1% year over year, for the twelve months ended September 30, 2018.

• Implementing Proven Marketing Strategies at Recently Acquired Properties. We increased our active member database by 22.6% compared to the pre-transition period, which we partially attribute to our

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marketing strategy. We plan to deploy many of the GMS applications that we currently use in British Columbia, with the added benefit that we also own the GMS and have exclusive use of the player data within it in Ontario. We are also implementing our own loyalty program in Ontario, which will be integrated with our F&B amenities.

• Renovating and Rebranding Properties. Most of the Ontario properties we acquired, with the notable exception of Casino Rama, derive their revenue almost exclusively from slot machines. We plan to add table games where there is market potential, optimize floor layout and implement our successful branding and F&B strategies in order to transform our Ontario properties into the vibrant local entertainment destinations for which our brands are already well known in British Columbia and Alberta. We anticipate that this will increase F&B revenue and help to attract the new and casual gamer segment that has historically been underserved by many of these properties.

• Relocating Select Properties to Higher Density Urban Centers. Partly as a function of their historical ties to the Ontario horse racing industry, some of the Ontario properties we acquired are located in relatively remote areas. However, the gaming zones that these remote properties serve also include denser urban centers, providing us with an opportunity to relocate the properties to better locations within the gaming zone. We anticipate that by relocating our Sudbury Downs Slots and Dresden Raceway Slots (Chatham) properties to higher density areas, we can attract greater traffic, allowing us to build properties with greater scale. See “Risk Factors—Risks Related to Acquisitions and Capital Projects—The expansion, rebranding and/or relocation of the Cascades Casino Langley, Chances Mission, Dresden Raceway Slots, Point Edward Casino, Western Fair District London Slots, Sudbury Downs Slots, Hanover Raceway Slots and Gateway Innisfil may not be completed on a timely basis, on anticipated terms or at all.”

We purchased the North and Southwest Bundles for $144.4 million (excluding cash, cash equivalents, non-cash working capital and taxes) and spent $62.6 million to acquire the Central Bundle (excluding cash, cash equivalents, non-cash working capital and taxes). Going forward, we plan to spend between $200 million and $230 million in total through 2020 to complete these initiatives at our existing Ontario properties. These costs are expected to be funded through a combination of cash on hand and operating cash flow. The following table summarizes our major near-term capital projects at our existing Ontario properties:

Major Growth Projects at Our Existing Ontario Properties

Property	Growth Initiative	Anticipated Property Impact				Estimated Completion		Estimated Spend(1)
		Gaming ft2 Added	Slots (Current / Planned / Max)	Tables (Current / Planned / Max)	New F&B
Chatham (currently Dresden Raceway Slots)	Relocation and rebranding as Cascades	14,144	154 /330 / 400	0 / 10 / 20	•  MATCH •  The Buffet		Q3 2019	$	36.1 million
Point Edward	Renovation and rebranding as Starlight	4,257	484 /492 / 600	13 / 25 / 40	•  MATCH •  The Buffet		Q4 2018	$	25.9 million
Western Fair	Redevelopment and rebranding as Starlight	34,115	767 /900 / 1,200	0 / 46 / 50	•  MATCH •  Atlas •  The Buffet		Q3 2020	$	80.0 million
Sudbury	Relocation and rebranding as Starlight	21,598	427 /600 / 600	0 / 21 / 30	•  MATCH •  Atlas •  The Buffet		Q2 2020	$	55.5 million
Hanover	Redevelopment and rebranding as Playtime	8,225	189 /300 / 300	0 / 8 / 20	•  MATCH •  The Buffet		Q1 2019	$	18.0 million
Innisfil	Renovation and rebranding as Cascades	3,600	989 /1,100 / 1,200	0 /26 /100	•  MATCH •  The Buffet		Q1 2019	$	5.0 million

Notes:    (1) Based on management’s estimates.

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We are confident in our ability to execute our growth initiatives in Ontario, particularly given our recent success in integrating properties that we acquired from the Playtime Gaming Group in December 2015. At the time of acquisition, the profitability of these properties was hampered by an ineffective marketing strategy, lack of F&B amenities and suboptimal gaming operations. We successfully applied our proven marketing concepts, installed our branded F&B amenities, optimized operations and made a series of property improvements.

Development in New Markets

Based on our management team’s significant gaming and entertainment operations experience and our strong financial position, we believe we are well positioned to realize new growth opportunities as they arise. These opportunities may include the acquisition or development of new gaming properties, as well as other growth opportunities in the gaming and entertainment industry. We regularly consider attractive opportunities to consolidate the gaming industry in our markets and to diversify our operations into new regions.

Among our long-term expansion projects are four potential new builds (subject to municipal and other approvals) located in Delta, British Columbia, the Kenora area in Ontario, North Bay, Ontario and Wasaga Beach, Ontario. We plan to spend between $130 million and $145 million in total to complete these initiatives. Highlights of these projects are illustrated below:

New Casino Build Opportunities

Property		Proposed Property Details				Estimated Completion	Estimated Spend(1)
	Branding	Gaming Floor (ft2)(1)	Slots(1)	Tables(1)	F&B
Delta	Cascade Delta	40,000	500—600	30	•  MATCH •  The Buffet	Q3 2020	$	55.0 million
Kenora	Playtime Casino	6,200	200	—	•  MATCH	Q1 2020	$	21.0 million
North Bay	Cascades Casino	14,100	300	10	•  MATCH •  The Buffet	Q1 2020	$	31.3 million
Wasaga Beach	Cascades Casino	10,560	273	10	•  MATCH •  The Buffet	Q3 2020	$	30.0 million

 Notes:    (1) Based on management’s estimates.

Risks Associated with Our Business and to Acquisitions and Capital Projects

Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under the “Risk Factors” section of this prospectus in deciding whether to invest in our securities. Among these important risks are the following:

• our business is subject to extensive governmental gaming regulation. Changes to the regulatory regime governing our business, our inability to renew or obtain new contracts governing our existing gaming operations or our inability to obtain new casino licenses could adversely affect us;

• we may be subject to change to the contracts and licenses related to our existing operations and our contracts or licenses may be revoked or may not be renewed;

• our ability to obtain additional casino licenses or operating agreements is not guaranteed;

• liquor laws and associated liquor licenses in British Columbia, Ontario or Alberta may affect our operations;

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• the historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of unaudited combined schedules of revenue and direct expenses only and does not represent complete financial statements; care should be taken when relying upon such information;

• the pro forma financial statements included in this prospectus are presented for illustrative purposes only and may not be an indication of our financial condition or results of operations following the Ontario acquisitions;

• changes in accounting standards could affect our reported results;

• the gaming industry is highly competitive and we may lose market share to our local competitors;

• if we fail to successfully implement our growth strategies, which includes acquiring new properties and expanding, renovating and relocating our existing properties, our ability to increase our revenues could be adversely affected;

• we compete with online gaming and entertainment companies that provide gaming and entertainment experiences, which could adversely affect our future casino gaming revenue;

• we cannot assure that our anti-money laundering and anti-corruption policies will be effective in preventing the occurrence of money laundering or other illegal activities;

• our casino gaming revenue is currently concentrated in the GVRD area and Ontario, which makes us especially subject to economic and competitive risks associated with the conditions in those areas;

• our business is particularly sensitive to reductions in discretionary consumer and corporate spending as a result of global and regional economic conditions;

• global economic conditions may have a material adverse effect on our business, financial condition and results of operations.

• changes to our customer base may adversely affect our business and results of operations;

• unusual weather, natural disasters, geo-political events or acts of terrorism could adversely affect our operations and financial results;

• we face the risk of fraud or cheating commonly faced by the gaming business, which could adversely affect our results of operations;

• we are subject to the reputational challenge of operating in the gaming industry;

• we may not realize the anticipated benefits from an acquisition, including the Ontario acquisitions;

• we may pursue additional acquisition opportunities and our efforts to integrate recent acquisitions and complete future acquisitions may not be successful and such efforts may subject us to considerable business and financial risks;

• while we intend to complete the gaming properties in Kenora, North Bay, Delta and Wasaga Beach on schedule, these properties may not be completed on a timely basis, on anticipated terms or at all due to unforeseen factors;

• the expansion, rebranding and/or relocation of the Cascades Casino Langley, Chances Mission, Dresden Raceway Slots, Point Edward Casino, Western Fair District London Slots, Sudbury Downs Slots, Hanover Raceway Slots and Gateway Innisfil may not be completed on a timely basis, on anticipated terms or at all;

• construction may interfere with our operations;

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• our efforts to grow through the acquisition, location, relocation and development of new gaming operations may not be successful;

• we may experience difficulties with our internal systems and controls during periods of growth; and

• our capital projects may not receive the required resources.

Implications of Being an Emerging Growth Company and a Foreign Private Issuer

As a company with less than $1.07 billion in gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements for up to five years that are otherwise applicable generally to public companies. These provisions include, among other matters:

• requirement to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in this prospectus;

• exemption from the auditor attestation requirement on the effectiveness of our system of internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;

• exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

• exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, requiring mandatory audit firm rotation or a supplement to the auditor’s report, in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

• an exemption from the requirement to seek non-binding advisory votes on executive compensation and golden parachute arrangements; and

• reduced disclosure about executive compensation arrangements.

We will remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering unless, prior to that time, we have more than $1.07 billion in annual gross revenue, have a market value for our common shares held by non-affiliates of more than $700.0 million as of the last day of our second fiscal quarter of the fiscal year and a determination is made that we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act, or issue more than $1.0 billion of non-convertible debt over a three-year period, whether or not issued in a registered offering. We have availed ourselves of the reduced reporting obligations with respect to executive compensation disclosure in this prospectus and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of that extended transition period and, as a result, we plan to comply with new and revised accounting standards on the relevant dates on which adoption of those standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

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As a result of our decision to avail ourselves of certain provisions of the JOBS Act, the information that we provide may be different than what you may receive from other public companies in which you hold an equity interest. In addition, it is possible that some investors will find our common shares less attractive as a result of our elections, which may cause a less active trading market for our common shares and more volatility in our stock price.

In addition, upon consummation of this offering, we will report under the Exchange Act, as a non-U.S. company with foreign private issuer status. As a foreign private issuer, we may take advantage of certain provisions in the New York Stock Exchange, or NYSE, Listing Rules that allow us to follow Canadian law for certain corporate governance matters. See “Management—Foreign Private Issuer Status.” Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

• the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

• the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

• the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and

• Regulation Fair Disclosure, or Regulation FD, which regulates selective disclosures of material information by issuers.

Corporate Information

Our predecessor, Gateway Casinos & Entertainment Inc., or Old Gateway, was formed on November 16, 2007 in connection with an acquisition by Macquarie Group Limited and Publishing and Broadcasting Limited (now known as Consolidated Media Holdings Limited) through New World Gaming Partners Ltd., of all of the outstanding units and convertible debentures of Gateway Casinos Income Fund, substantially all of the assets of Gateway Casinos Inc. and all of the outstanding shares of Star of Fortune Gaming Management (B.C.) Corp. On May 18, 2010, we were incorporated under the Canada Business Corporations Act, or the CBCA, (initially as 7555237 Canada Ltd., which was changed to “Gateway Casinos & Entertainment Limited” on July 6, 2010) in connection with the restructuring of Old Gateway by an ad hoc group of lenders (led by The Catalyst Capital Group Inc., or Catalyst) pursuant to a plan of arrangement under the CBCA that became effective on September 16, 2010. Under the plan of arrangement, we acquired substantially all of the assets and business of Old Gateway.

In connection with the restructuring in 2010, our articles were amended on July 19, 2010, September 14, 2010 and June 25, 2012 to include restrictions on transfers of common shares in order to comply with the regulations and policies of the Gaming Authorities and Gaming Regulators and to effect a consolidation of our common shares. In addition, our articles were further amended on July 1, 2017 to effect the Internal Corporate Reorganization (as defined below).

On July 1, 2017, we completed an internal corporate reorganization, or the Internal Corporate Reorganization, pursuant to which several of our wholly owned subsidiaries were amalgamated with us, with us continuing as the newly amalgamated corporation. Following the Internal Corporate Reorganization, on October 18, 2017, we acquired all of the issued and outstanding shares of 7588674 Canada Inc., or 7588674, which held registered legal title to certain real property beneficially owned by us and acted as nominee on our behalf.

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Our principal office is located at 4331 Dominion Street, Burnaby, British Columbia V5G 1C7 and our telephone number is (604) 412-0166. Our website address is www.gatewaycasinos.com. Information contained on, or accessible through, our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference.

Our Sponsor

Catalyst is a private equity investment firm founded in 2002 and had an estimated $4.6 billion in assets under management as of September 30, 2018. The Catalyst team collectively possesses more than 110 years of extensive experience in restructuring, credit markets and merchant and investment banking in Canada, the United States, Latin America and Europe. Catalyst focuses generally on building businesses and specifically on bringing operational improvements to its investment companies as it leads them through restructurings and other forms of improvement and repositioning.

Since Catalyst acquired control of us under the September 2010 restructuring, we have undertaken a number of strategic initiatives through our disciplined execution and capitalization of growth opportunities. We have expanded into a new market, Ontario, where we successfully bid on three gaming bundles from the OLG, the Southwest Bundle, North Bundle and, most recently, the Central Bundle. From 2010 to 2018 we have increased the number of gaming properties from nine to 26 and the number of F&B outlets from 23 to 80. During that period, we have also completed renovations and improvements (and, in several cases, relocations) at all of our properties to optimize our operating performance and better serve our markets. Our revenues and profitability have also grown during that period as a result of strategic acquisitions and property optimization initiatives, including the implementation of new systems, processes and controls across our business to increase organic growth and cash generation. For the fiscal year ended December 31, 2011, our first full fiscal year following the restructuring, we had revenues of $254.0 million as compared to $478.8 million for the year ended December 31, 2017, an increase of 88.5%. We have increased our number of employees from approximately 2,800 at the end of 2011 to approximately 8,500 as of September 30, 2018.

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OFFERING

Issuer:	Gateway Casinos & Entertainment Limited.
Selling shareholders:	The Catalyst Capital Group Inc. and investment funds managed by it and TOP V New World Holdings LLC.
Common shares offered by the Selling Shareholders:	common shares (              common shares if the underwriters’ option to purchase additional shares from the selling shareholders is exercised in full).
Common shares to be outstanding immediately after this offering:	common shares
Underwriters’ option to purchase additional common shares:	The selling shareholders have granted the underwriters an option, exercisable in whole or in part, at any time for a period of 30 days from the closing of this offering, to purchase up to an additional              common shares (being equal to 15% of the common shares sold as part of this offering) at the offering price.
Common shares held by the selling shareholders after this offering:	Upon completion of this offering, based on the midpoint of the estimated price range set forth on the cover page of this prospectus, the selling shareholders will, collectively, directly or indirectly own or control     % of the issued and outstanding common shares (    % if the underwriters’ option is exercised in full).
Use of Proceeds:	We will not receive any proceeds from this offering. We expect the selling shareholder to receive net proceeds of approximately $        million (or $        million if the underwriters exercise in full their option to purchase additional common shares), based upon the initial public offering price of $        per common share, after deducting underwriting discounts. Please read “Use of Proceeds” and “Principal and Selling Shareholders.”
Principal and selling shareholders:	Upon completion of this offering, affiliates of Catalyst will continue to own a controlling interest in us. Accordingly, we currently intend to avail ourselves of the “controlled company” exemption under the NYSE Listing Rules. See “Management—Director Independence” and “Principal and Selling Shareholders.”
Dividend Policy:	We do not anticipate paying any cash dividends on our common shares in the foreseeable future.

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Risk Factors:	An investment in our common shares is speculative and involves a high degree of risk. Prospective purchasers of common shares should carefully consider information set forth under the heading “Risk Factors” beginning on page 42 and all other information set forth in this prospectus before deciding to invest in our common shares.
Listing:	We have applied to list our common shares on the NYSE under the symbol “GTWY”.

The number of our common shares to be outstanding after this offering is based on                 common shares outstanding as of                  and excludes:

• common shares reserved for future issuance under our equity compensation programs as described in “Executive Compensation—Equity-Based Compensation.”

Unless otherwise indicated, all information contained in this prospectus assumes:

• no exercise by the underwriters of their option to purchase additional shares in this offering; and

• an initial public offering price of $        per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

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SELECTED SUMMARY HISTORICAL FINANCIAL INFORMATION

The following table sets forth our summary historical consolidated financial data as at and for the periods indicated below and are not necessarily indicative of the results to be expected for any other period. This information should be read together with our financial statements and the related notes and the discussion under “Use of Proceeds”, “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” included elsewhere in this prospectus.

The summary historical consolidated financial information for the years ended December 31, 2017 and December 31, 2016 was derived from our audited consolidated financial statements and related notes for such periods, which were prepared in accordance with IFRS and are included elsewhere in this prospectus. The summary historical consolidated financial information for the nine months ended September 30, 2018 and September 30, 2017 and balance sheet data as at September 30, 2018 was derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited historical financial information has been prepared on the same basis as the audited historical financial information and, in management’s opinion, reflects all adjustments necessary for the fair presentation of the financial information set forth therein.

The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Historical results of operations and trends that may be inferred from the following financial information may not necessarily indicate future results from operations and the results of operations from any interim period are not necessarily indicative of the results to be expected for the full year or any future period.

Consolidated Statement of Financial Performance

	Nine Months Ended September 30,				Year Ended December 31,
(In thousands of $)	2018		2017		2017		2016
Consolidated statement of operations and comprehensive income (loss):
Revenues
Gaming	$	399,620	$	270,571	$	383,069	$	248,049
Food and Beverage		52,243		47,955		65,975		55,409
Hotel		12,203		10,648		13,501		12,492
Automated teller machines		13,099		6,518		10,667		8,332
Other		7,112		3,276		5,609		3,883
Total Revenues		484,277		338,968		478,821		328,165
Costs and Expenses
Cost of Food and Beverage Service		28,604		22,736		31,828		22,718
Human Resources		200,443		142,459		204,453		142,142
Marketing and Promotion		24,636		17,642		23,092		24,485
Occupancy		64,013		23,939		35,017		17,587
Operating		50,332		27,085		44,482		24,898
Share-based compensation (recovery)(1)		8,441		17,741		19,631		(3,111	)
Depreciation of property and equipment		31,559		32,288		44,793		27,570
Amortization of intangible assets		20,951		40,112		53,506		55,661

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	Nine Months Ended September 30,						Year Ended December 31,
(In thousands of $)	2018			2017			2017			2016
Writedown of non-financial assets(2)		—			167			23,588			35
Other(3)		28,248			11,289			15,209			5,872
Total Costs and Expenses		457,227			335,458			495,599			317,857
Operating Income/(Loss)		27,050			3,510			(16,778	)		10,308
Other Expenses (Income)
Interest expense, net		41,664			43,368			58,887			35,449
Foreign exchange loss (gain)		25,480			(53,066	)		(49,034	)		—
Gain on sale of property and equipment		(192,373	)		(5	)		(36	)		(2,201	)
Change in fair value of embedded derivatives		(4,110	)		(3,759	)		(9,280	)		(700	)
Change in fair value of cross currency interest rate swaps		(21,891	)		37,167			31,991			—
Loss on debt extinguishment		15,124			16,135			16,135			—
Loss on debt modification		6,264			—			—			—
Income/ (Loss) before income taxes		156,892			(36,330	)		(65,441	)		(22,240	)
Current income tax expense		(1,321	)		(686	)		(1,780	)		(45	)
Deferred income tax recovery		661			574			2,147			1,829
Income (loss) and comprehensive income (loss)	$	156,232		$	(36,442	)	$	(65,074	)	$	(20,456	)

Notes:    (1) For detail on share-based compensation, see “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 10” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 15”.

(2) Represents write-down of non-financial assets associated with the Grand Villa Casino Edmonton facility (2017—$22.6 million), write-down of non-financial assets associated with the old Lake City Penticton facility (Q3 2017 and 2017—$0.2 million) and a suspended OSA for a community gaming center (2017—$0.8 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 6” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 10 and Note 11”.

(3) Represents costs associated with restructuring (Q3 2018—$4.4 million; Q3 2017—$0.8 million; 2017—$0.8 million; 2016—$0.8 million), business acquisitions (Q3 2018—$2.3 million; Q3 2017—$3.9 million; 2017—$7.0 million; 2016—$2.2 million), transaction costs (Q3 2018—$16.3 million; Q3 2017—$1.8 million; 2017—$5.2 million; 2016—$0.3 million), site pre-opening costs (Q3 2018—$3.7 million; Q3 2017—$0.9 million; 2017—$1.6 million; 2016—$2.1 million) and other expenses (Q3 2018—$1.5 million; Q3 2017—$3.8 million; 2017—$0.6 million; 2016—$0.5 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 12” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 17”.

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Balance Sheet Data

The following table provides balance sheet data as of the dates indicated.

(In thousands of $)	September 30, 2018			December 31,
				2017			2016
Cash and cash equivalents	$	210,567		$	97,385		$	37,453
Property and equipment		446,021			334,038			486,690
Intangible assets		239,592			236,226			267,992
Total assets		1,005,543			1,036,370			812,531
Long-term debt		882,266			881,291			476,864
Total liabilities		1,050,915			1,096,523			617,743
Total shareholders’ (deficiency)/equity attributable to our shareholders		(47,425	)		(62,257	)		192,617

Other Data

The following table provides Adjusted EBITDA and total Adjusted Property EBITDA for the periods indicated:

(In thousands of $)	Nine Months Ended September 30,				Year Ended December 31,
	2018		2017		2017		2016
Adjusted EBITDA(1)	$	122,635	$	108,984	$	144,206	$	96,335
Corporate Costs		24,972		15,473		24,909		14,524
Total Adjusted Property EBITDA(1)	$	147,607	$	124,457	$	169,115	$	110,859

Notes:

(1) For more information about these non-IFRS measures, see the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in this prospectus. For a reconciliation of Adjusted EBITDA to its most directly comparable measures calculated in accordance with IFRS, see the table immediately below.

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Reconciliation of Income (Loss) and Comprehensive Income (Loss) to Adjusted EBITDA and Free Cash Flow

	Nine Months Ended September 30,						Year Ended December 31,
	2018			2017			2017			2016
Income (loss) and comprehensive income (loss)	$	156,232		$	(36,442	)	$	(65,074	)	$	(20,456	)
Amortization of intangible assets		20,951			40,112			53,506			55,661
Depreciation of property and equipment		31,559			32,288			44,793			27,570
Interest expense		41,805			44,031			59,566			35,477
Interest income		(141	)		(663	)		(679	)		(28	)
Income tax expense (recovery)		660			112			(367	)		(1,784	)
EBITDA(1)	$	251,066		$	79,438		$	91,745		$	96,440
Writedown of non-financial assets (2)		—			167			23,588			35
Other(3)		28,248			11,289			15,209			5,872
Share-based compensation (recovery)(4)		8,441			17,741			19,631			(3,111	)
Change in fair value of embedded derivatives(5)		(4,110	)		(3,759	)		(9,280	)		(700	)
Change in fair value of cross currency interest rate swaps(6)		(21,891	)		37,167			31,991			—
Loss on debt extinguishment(7)		15,124			16,135			16,135			—
Loss on debt modification(8)		6,264			—			—			—
Foreign Exchange (loss)/gain(9)		25,480			(53,066	)		(49,034	)		—
Gain on sale of property and equipment(10)		(192,373	)		(5	)		(36	)		(2,201	)
Non-cash deferred rent(11)		6,386			1,124			1,504			—
Tax adjustment for prior periods(12)		—			2,753			2,753			—
Adjusted EBITDA(1)(13)	$	122,635		$	108,984		$	144,206		$	96,335
Adjusted EBITDA Margin(1)		25.3	%		32.2	%		30.1	%		29.4	%
Free Cash Flow adjustments(1)
Less maintenance capital expenditures(14)		3,872			2,916			4,140			3,834
Less interest expense(15)		41,805			44,031			59,566			35,477
Less cash taxes paid(16)		3,250			—			—			45
Less mandatory debt repayments(17)		1,598			9,448			11,114			25,410
Free Cash Flow(1)	$	72,110		$	52,589		$	69,386		$	31,569
Free Cash Flow Conversion(1)		58.8	%		48.3	%		48.1	%		32.8	%
Revenue		484,277			338,968			478,821			328,165

Notes:    (1) For more information about these Non-IFRS Financial Measures, see the “Presentation of Financial Matters and Other Information—Non-IFRS Measures” section in this prospectus.

(2) Represents write-down of non-financial assets associated with the Grand Villa Casino Edmonton facility (2017—$22.6 million), write-down of non-financial assets associated with the old Lake City Penticton facility (Q3 2017 and 2017—$0.2 million) and a suspended OSA for a community gaming center (2017—$0.8 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 6” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 10 and Note 11”.

(3) Represents costs associated with restructuring (Q3 2018—$4.4 million; Q3 2017—$0.8 million; 2017—$0.8 million; 2016—$0.8 million), business acquisitions (Q3 2018—$2.3 million; Q3 2017—$3.9 million; 2017—$7.0 million; 2016—$2.2 million), transaction costs (Q3 2018—$16.3 million; Q3 2017—$1.8 million; 2017—$5.2 million; 2016—$0.3 million), site pre-opening

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costs (Q3 2018—$3.7 million; Q3 2017—$0.9 million; 2017—$1.6 million; 2016—$2.1 million) and other expenses (Q3 2018—$1.5 million; Q3 2017—$3.8 million; 2017—$0.6 million; 2016—$0.5 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 12” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 17”.

(4) Includes non-cash share-based compensation.

(5) Represents changes in fair value of embedded derivatives on long-term debt. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 9 and Note 14” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 14 and Note 19”.

(6) Represents changes in fair value of cross currency interest rate swaps associated with long-term debt. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 9 and Note 14” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 14 and Note 19”.

(7) Represents loss on extinguishment of debt. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Financial Statements—Note 9” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 14”.

(8) Represents loss on modification of debt during Q3 2018. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 9.”

(9) Represents the (gain) loss on foreign exchange related to the long-term debt.

(10) Represents the gain on property and equipment disposed of or sold.

(11) IFRS requires rental expense for leases to be recognized on a straight-line basis over the life of the leases, rather than the cash paid for the leases. This adjustment removes the non-cash portion of rental expense.

(12) Represents tax adjustments related to GST/HST on ATM fees for fiscal years 2010 to 2015, which was accrued for in Q3 2017.

(13) Adjusted EBITDA for the nine months ended September 30, 2018:

(i) does not give effect to the full period impact of the results for the Central Bundle acquired on July 18, 2018 for the nine months ended September 30, 2018. The financial statements presented above include approximately $13 million of Adj. EBITDA contributed from the Central Bundle from July 18, 2018 through September 30, 2018.

(ii) does not give effect to the full period impact of the new OSAs. The new OSAs that became effective on April 1, 2018 include changes that increased our share of gaming revenue related to table games. Regular-limit table games and poker increased from 40% of Net Win to 42.5%, and from 75.0% to 77.5%, respectively. The new OSAs also eliminated the 0.6 MTA fee from the GVRD Casinos and allow us to save 1.0% on table and poker expenses. In addition to the new OSAs, the BCLC increased the free play caps to 2.5% of commissionable Net Win for slots and 1% of commissionable Net Win for tables (including High Limit Tables), retroactive to April 1, 2018. Had the new OSAs and free play cap changes been in effect since the beginning of the year, we estimate that our Adjusted EBITDA would have been higher than reported by approximately $2 million.

(iii) reflects losses relating to the labor strike in the Thompson Okanagan Region. Beginning June 29, 2018, workers at the Thompson-Okanagan properties were on strike, which resulted in reduced gross gaming revenue, increased labor costs, and increased marketing spend. An agreement to settle the strike has been ratified, and the properties are in the process of resuming normal operations. We estimate that the labor disruption in the Thompson-Okanagan region had an estimated $7 million adverse impact on EBITDA.

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(iv) reflects losses related to the now-resolved GMS issues in the Ontario region. From June until August 2018, the Company’s new GMS experienced eight outages at key properties in the North and Southwest Ontario regions, which caused gaming floor disruptions due to slot machine inoperability. The outages impacted peak hours of operations, the Canada Day Holiday weekend, and several mid-week promotional nights. We estimate that the GMS problems in the Ontario region caused an estimated $5 million adverse impact on EBITDA. The issues with the GMS have been addressed, and the system has been stable since mid-August 2018.

The estimates noted above are based in part on assumptions and estimates of prospective results and actual results might have differed from such estimates materially. Furthermore, the achievement of such estimated impacts in future periods are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control. As a result, no assurances can be made that the estimated impacts will be realized in the amounts expected in future periods. See “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors—Risks Related to Acquisitions and Capital Projects” and “Risk Factors—Risks Related to Our Business—A significant portion of our labor force is covered by collective bargaining agreements. Wage and/or benefit increases resulting from new collective bargaining agreements or our inability to reach an agreement with the unions could have an adverse impact on our operations.”

(14) Represents maintenance capital expenditures. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 6” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 10”. For Q3 2018 of the $97,053, $93,181 related to capital expenditures associated with projects implemented primarily to drive business growth and the remaining amount of $3,872 is related to maintenance capital expenditures. For 2017 of the $99,784, $95,644 relates to capital expenditures associated with projects implemented primarily to drive business growth and the remaining amount of $4,140 is related to maintenance capital expenditures. For 2016 of the $70,543, $66,709 relates to capital expenditures associated with projects implemented primarily to drive business growth and the remaining amount of $3,834 is related to maintenance capital expenditures.

(15) Represents interest expense related to our long-term debt, amortization of deferred transaction costs and premium on long-term debt and non-deductible interest and penalties. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 13” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 18”.

(16) Represents cash taxes paid. See “Index to Condensed Consolidated Interim Financial Statements—Condensed Consolidated Interim Statement of Cash Flows” and “Index to Consolidated Financial Statements—Consolidated Statements of Cash Flows”.

(17) Represents our mandatory debt repayments. See “Index to Condensed Consolidated Interim Financial Statements—Condensed Consolidated Interim Statement of Cash Flows” and “Index to Consolidated Financial Statements—Consolidated Statements of Cash Flows.” For the nine months ended September 30, 2018, we excluded the repayment of US$402,975 and $81,601 to discharge our old credit facility and a mortgage attached to our Langley property, respectively, pursuant to the refinancing completed in March 2018. For the year ended December 31, 2017, we excluded the repayment of $500,850 made to discharge our old credit facility and senior secured notes pursuant to the refinancing completed in February 2017. See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 9” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 14”.

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Pro Forma Financial Data

The following table provides our unaudited pro forma combined statement of operations and comprehensive income for the nine months ended September 30, 2018 and has been prepared by management for illustrative purposes using our historical consolidated statement of operations and comprehensive income and the pro forma schedule of revenue and direct expenses for the Central Bundle, which is based on the combined schedules of revenue and direct expenses for the Central Bundle, prepared and obtained from the OLG for the year ended March 31, 2018, and adjusted to give pro forma effect to the acquisition of the Central Bundle, the Sale and Leaseback Transactions, the 2018 Refinancing, and the Term Loan Upsize, as further described below, as if they had occurred on January 1, 2018:

a) Acquisition of the Central Bundle

On July 18, 2018, we signed a 23-year COSA with the OLG for the operation of the Central Bundle. Under the Central Bundle TAPA, we purchased the assets of the Central Bundle and entered into leases for Casino Rama Resort on Chippewas of Rama First Nation’s Lands and OLG Slots at Georgian Downs (subsequently renamed Gateway Innisfil), and have the opportunity to develop a casino in either Wasaga Beach or Collingwood. The purchase price for the Central Bundle properties was $89,332, including net working capital of $26,732, comprised of cash, prepaids, inventory and accrued liabilities. For a description of certain limitations regarding the financial information provided by the OLG and the related pro forma information, see “Risk Factors—Risks Related to Our Business—The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consist of combined schedules of revenue and direct expenses only and do not represent complete financial statements; care should be taken when relying upon such information.”

b) Sale and Leaseback Transactions

On December 15, 2017, we entered into a definitive agreement with Mesirow Realty Sale-Leaseback, Inc., or the Purchaser, for the sale of the lands and premises constituting the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley (in addition to certain adjacent properties), collectively, the SLB Properties, for approximately $503.6 million, subject to certain customary adjustments, and the leaseback of the SLB Properties to Gateway. The Sale and Leaseback Transactions closed on March 12, 2018, and resulted in an approximate gain on sale of $192.4 million.

Under the Sale and Leaseback Transactions, certain of our subsidiaries entered into long-term leases, as tenants, for each of the SLB Properties. Annual lease payments under the long-term leases total $35 million in the first year of the leases, and increase at a rate of 2.25% per annum for the term of the leases.

The proceeds from the Sale and Leaseback Transactions, net of fees and expenses of approximately $9.4 million, were used to repay approximately $490.6 million of loans under our 2017 Senior Secured Credit Facility, to repay in full the $2.0 million mortgage on the land adjacent to the Cascades Casino Langley, and to pay the partial-month’s rent for March 2018 of $2.0 million. The net cash to our available cash on hand was $nil.

c) 2018 Refinancing

On March 13, 2018, we refinanced our prior senior secured credit facility, or the 2017 Senior Secured Credit Facility, by way of an amended and restated credit and guaranty agreement, or the A&R Credit Agreement, for a new senior secured credit facility, or the 2018 Senior Secured Credit Facility, which we collectively refer to as the 2018 Refinancing. The 2018 Senior Secured Credit Facility consists of a U.S.$335 million first lien secured term loan facility, or the 2018 First Lien Term Loan Facility, and an up to $150 million senior secured revolving credit facility, or the 2018 Senior Secured Revolving Credit Facility, available to be drawn in Canadian dollars with a sublimit of U.S.$25 million for U.S. dollars.

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The proceeds from the 2018 First Lien Term Loan Facility were used (i) to repay in full the $45 million outstanding revolving credit amount and refinance the remaining $139.5 million of loans under our 2017 Senior Secured Credit Facility, (ii) for a one-time restricted payment of U.S.$100 million ($125.5 million) to the shareholders of record prior to the completion of this offering, (iii) to pay approximately $7.7 million of accrued and unpaid interest on the 2017 Senior Secured Credit Facility ($0.9 million as of December 31, 2017), (iv) to pay approximately $14.7 million of related fees and expenses incurred in connection with the foregoing, and (v) to pay a management bonus of $9.2 million (of which $4.2 million was accrued as at December 31, 2017). The remaining $123.7 million of the proceeds from the 2018 First Lien Term Loan Facility were used to increase our available cash on hand, and will be available to fund general corporate purposes, including future capital expenditures. Adjusting for the difference in accrued and unpaid interest between closing and December 31, 2017, the increase to cash and cash equivalents at December 31, 2017 would have been $130.5 million. As at the date of this prospectus, no amounts have been drawn under the 2018 Senior Secured Revolving Credit Facility.

d) Term Loan Upsize

On July 16, 2018, we amended its 2018 Senior Secured Credit Facility pursuant to an amendment to the amended and restated credit and guaranty agreement, or the First Amendment to Amended and Restated Credit and Guaranty Agreement, to increase its Term Loan B by US$105,000. Proceeds from the increase to the Term Loan B were primarily used to fund the acquisition of the Central Bundle $62,600. Assuming that the amendment was completed on January 1, 2018, we would have recorded an additional $3,533 in interest expenses for the nine months ended September 30, 2018.

The assumptions and estimates underlying the unaudited adjustments to the pro forma combined statement of operations and comprehensive income are described in the accompanying notes, which should be read together with the pro forma combined statement of operations and comprehensive income.

The pro forma data presented reflect events directly attributable to the described transactions and certain assumptions that we believe are reasonable. The pro forma data are not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated above or which could be achieved in the future. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual adjustments may materially differ from the pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma financial information.

Gateway Casinos & Entertainment Limited—Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income for the nine months ended September 30, 2018⁽¹⁾

(In thousands of $)	Gateway (Historical)		Central Bundle Pro Forma		Adjustments		Gateway Pro Forma
Revenue
Gaming	$	367,827	$	122,060	$	—	$	489,887
Food and beverage		52,243		7,723		—		59,966
Facility development commissions and permitted capital expenditures		31,793		3,933		—		35,726
Hotel		12,203		3,800		—		16,003
Automated teller machines		13,099		4,218		—		17,317
Other		7,112		3,495		—		10,607
	$	484,277	$	145,229	$	—	$	629,506

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(In thousands of $)	Gateway (Historical)			Central Bundle Pro Forma		Adjustments			Gateway Pro Forma
Expenses
Human resources	$	200,443		$	61,668	$	—		$	262,111
Operating		50,332			14,435		—			64,767
Marketing and promotion		24,636			24,324		—			48,960
Occupancy(3(a))		64,013			12,583		8,361			84,957
Cost of food and beverage		28,604			9,221		—			37,825
Amortization of intangible assets		20,951			—		—			20,951
Depreciation of property and equipment(3(b))		31,559			2,671		(2,277	)		31,953
Writedown of non-financial assets		—			—		—			—
Other(3(c))		28,248			—		(9,407	)		18,841
Share-based compensation		8,441			—		—			8,441
	$	457,227		$	124,902	$	(3,323	)	$	578,806
Income before other expenses (income) and income taxes	$	27,050		$	20,327	$	3,323		$	50,700
Other expenses (income)
Interest expense(3(d))		41,805			—		567			42,372
Interest income		(141	)		—		—			(141	)
Change in fair value of embedded derivatives		(4,110	)		—		—			(4,110	)
Change in fair value of cross currency interest rate swaps		(21,891	)		—		—			(21,891	)
Loss on debt extinguishment(3(e))		21,388			—		(21,388	)		—
Gain on sale of property and equipment(3(f))		(192,373	)		—		192,373			—
Foreign exchange gain		25,480			—		—			25,480
	$	(129,842	)		—	$	171,552		$	41,710
Income before income taxes	$	156,892		$	20,327	$	(168,229	)	$	8,990
Income tax (expense) recovery(3(g))
Current		(1,321	)		—		—			(1,321	)
Deferred		661			—		—			661
Income and comprehensive income for the period	$	156,232		$	20,327	$	(168,229	)	$	8,330
Net Income per share Basic and Diluted										0.21
Weighted Average Shares Outstanding										39,402

Notes:    (1) Basis of presentation

Our unaudited pro forma combined statement of operations and comprehensive income have been prepared by management for illustrative purposes only, to show the effect of the acquisition of the assets of the Central Bundle, the sale of the lands and premises constituting the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley and the leaseback of such land and premises to Gateway, or the Sale and Leaseback Transactions, the refinancing of the senior secured credit facilities, or the 2018 Refinancing, and the amendment of our term loan facility within the senior secured credit facilities in connection with the acquisition of the Central Bundle, or the Term Loan Upsize, which we collectively refer to as the Transactions. The unaudited pro forma combined statement of operations and comprehensive income has been prepared as if the Transactions occurred on January 1, 2018.

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The unaudited pro forma combined statement of operations and comprehensive income has been prepared using the following information:

a) unaudited consolidated statement of operations and comprehensive income of Gateway for the nine months ended September 30, 2018; and

b) unaudited pro forma combined schedule of revenue and direct expenses of the Central Bundle for the period of January 1, 2018 to July 17, 2018.

                 (2) Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined financial statements conform to the accounting policies we have adopted, which are in compliance with IFRS as issued by IASB, except that as noted in Note 1 Basis of presentation, the site-level financial information prepared or provided by OLG management for the Central Bundle for the period of January 1, 2018 to July 17, 2018 does not include certain information and adjustments necessary to conform with IFRS as issued by the IASB.

                 (3) Pro Forma adjustments and assumptions

The following adjustments have been recorded in the unaudited pro forma combined statement of operations and comprehensive income to reflect the pro forma effects of the Transactions:

a) To record the lease payments of $8,361 for the period from January 1, 2018 to March 11, 2018 under the Sale and Leaseback Transactions, as described in Note 2(b), calculated on a straight-line basis over the term of the lease.

b) To eliminate the amount of depreciation of property and equipment we recorded for the period of January 1, 2018 to March 11, 2018 related to the Sale and Leaseback Transactions Properties, or the SLB Properties, as follows:

Grand Villa Casino Burnaby	$	1,111
Starlight Casino New Westminster		426
Cascades Casino Langley		740
	$	2,277

c) To adjust for the transaction costs related to the 2018 Refinancing ($7,778) and the Central Bundle ($1,629)

d) To adjust the amount of interest expense we reported for the nine months ended September 30, 2018 to reflect the 2017 and 2018 Refinancing and the July 2018 Term Loan Upsize, as described in Notes 2(c) and 2(d), calculated as follows:

Interest expense reported by the Company	$	(41,664	)
Interest expense calculated pursuant to the 2018 Refinancing and July Upsizing		42,231
Incremental Interest Expense	$	567

e) To eliminate the loss on debt extinguishment from the 2018 Refinancing ($15,124) and the loss on debt modification from the July 2018 Term Loan Upsize ($6,264).

f) To eliminate the $192,373 gain on the Sale Lease Back transaction.

g) We did not record a pro forma tax effect of these adjustments as the deferred tax asset is not realizable.

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The following table provides our unaudited pro forma combined statement of operations and comprehensive income for the year ended December 31, 2017, using our historical consolidated statement of operations and comprehensive income and the pro forma combined schedules of revenue and direct expenses for the Southwest Bundle, the North Bundle and the Central Bundle, which are based on the unaudited combined schedules of revenue and direct expenses prepared by and obtained from the OLG for the periods indicated below, and adjusted to give pro forma effect to the acquisitions of the Southwest Bundle, the North Bundle and the Central Bundle, the Sale and Leaseback Transactions, the 2018 Refinancing and the Term Loan Upsize, as further described below, as if they had occurred on January 1, 2017 for the purpose of the unaudited pro forma combined statement of operations and comprehensive income:

a) Acquisition of the Southwest Bundle

On May 9, 2017, we signed a 20-year COSA with the OLG for the operation of the Southwest Bundle. Under the Southwest Bundle transition and asset purchase agreement, or TAPA, we acquired gaming assets and assumed certain liabilities of the London, Point Edward, Woodstock, Dresden, Clinton and Hanover casinos. The total purchase price for such assets was $95,424 of consideration, including net working capital of $20,157 comprised of cash, prepaids, inventory and accrued liabilities. The pro forma financial information for the Southwest Bundle represents the period from January 1, 2017 to May 8, 2017 prior to our acquisition of the Southwest Bundle. For a description of certain limitations regarding the financial information provided by the OLG and the related pro forma information, see “Risk Factors—Risks Related to Our Business—The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of unaudited combined schedules of revenue and direct expenses only and does not represent complete financial statements; care should be taken when relying upon such information.”

b) Acquisition of the North Bundle

On May 30, 2017, we signed a 20-year COSA with the OLG for the operation of the North Bundle. Under the North Bundle TAPA, we acquired gaming assets and assumed certain liabilities of the Thunder Bay, Sault Ste. Marie and Sudbury casinos and the approval for new casino developments in Kenora and North Bay. The purchase price for such assets was $79,349 of consideration, including net working capital of $10,264 comprised of cash, prepaids, inventory and accrued liabilities. The pro forma financial information for the North Bundle represents the period from January 1, 2017 to May 29, 2017 prior to our acquisition of the North Bundle.

c) Acquisition of the Central Bundle, as described above;

d) Sale and Leaseback Transactions, as described above;

e) The 2018 Refinancing, as described above;

f) The Term Loan Upsize, as described above.

The assumptions and estimates underlying the unaudited adjustments to the pro forma consolidated statement of operations and comprehensive income are described in the accompanying notes, which should be read together with the pro forma condensed consolidated statement of operations and comprehensive income.

The pro forma data presented reflect events directly attributable to the described transactions and certain assumptions that we believe are reasonable. The pro forma data are not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated above or which could be achieved in the future. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual adjustments may differ from the pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma financial statements.

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Gateway Casinos & Entertainment Limited—Unaudited Pro Forma Combined Statement of Operations and Comprehensive (Loss) Income for the year ended December 31, 2017⁽¹⁾

(In thousands of $)	Gateway (Historical)			Southwest Bundle Pro Forma		North Bundle Pro Forma		Central Bundle Pro Forma		Adjustments			Gateway Pro Forma
Revenue
Gaming	$	344,468		$	40,940	$	28,445	$	247,890	$	—		$	661,743
Food and beverage		65,975			1,286		969		14,999		—			83,229
Facility development commissions and permitted capital expenditure		38,601			1,666		918		7,250		—			48,435
Hotel		13,501			—		—		6,129		—			19,630
Automated teller machines		10,667			1,594		943		7,157		—			20,361
Other		5,609			250		257		8,580		—			14,696
	$	478,821		$	45,736	$	31,532	$	292,005	$	—		$	848,094
Expenses
Human resources	$	204,454		$	17,048	$	13,392	$	115,412	$	—		$	350,306
Operating		44,489			3,194		3,706		27,083		—			78,472
Marketing and promotion		23,087			1,915		1,589		38,687		—			65,278
Occupancy(3(a))		35,015			4,728		3,977		38,774		43,596			126,090
Cost of food and beverage		31,827			1,019		755		18,631		—			52,232
Amortization of intangible assets		53,506			111		60		—		—			53,677
Depreciation of property and equipment(3(b))		44,793			4,905		4,129		7,054		(11,875	)		49,006
Writedown of non-financial assets		23,588			—		—		—		—			23,588
Other(3(c))		15,209			—		—		—		(5,738	)		9,471
Share-based compensation		19,631			—		—		—		—			19,631
	$	495,599		$	32,920	$	27,608	$	245,641	$	25,983		$	827,751
(Loss) income before other expenses (income) and income taxes	$	(16,778	)	$	12,816	$	3,924	$	46,364	$	(25,983	)	$	20,343
Other expenses (income)
Interest expense(3(d))		58,887			—		—		—		6,557			65,444
Interest income		—			—		—		—		—			—
Change in fair value of embedded derivatives		(9,280	)		—		—		—		—			(9,280	)
Change in fair value of cross currency interest rate swaps		31,991			—		—		—		—			31,991
Loss on debt extinguishment(3(e))		16,135			—		—		—		(16,135	)		—
Gain on sale of property and equipment		(36	)		—		—		—		—			(36	)
Foreign exchange gain		(49,034	)		—		—		—		—			(49,034	)
	$	48,663		$	—	$	—	$	—	$	(9,578	)	$	39,085
(Loss) income before income taxes	$	(65,441	)	$	12,816	$	3,924	$	46,364	$	(16,405	)	$	(18,742	)

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(In thousands of $)	Gateway (Historical)			Southwest Bundle Pro Forma		North Bundle Pro Forma		Central Bundle Pro Forma		Adjustments			Gateway Pro Forma
Income tax (expense) recovery(3(f))
Current		(1,780	)		—		—		—		—			(1,780	)
Deferred		2,147			—		—		—		—			2,147
(Loss) income and comprehensive (loss) income for the year	$	(65,074	)	$	12,816	$	3,924	$	46,364	$	(16,405	)	$	(18,375	)
(Loss) income per share Basic and Diluted														(0.47	)
Weighted Average Shares Outstanding														39,399

Notes:    (1) Basis of presentation

This unaudited pro forma combined statement of operations and comprehensive income has been prepared by management for illustrative purposes only, to show the effect of the acquisition of the assets of the Southwest, North and Central Bundles, the sale of the lands and premises constituting the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley and the leaseback of such land and premises to Gateway, which we refer to as the Sale and Leaseback Transactions, and the refinancing of our senior secured credit facilities in 2017 and 2018, which we refer to as the 2017 Refinancing and the 2018 Refinancing, respectively, and the amendment of our term loan facility within the senior secured credit facilities in connection with the acquisition of the Central Bundle, or the Term Loan Upsize, which we collectively refer to as the Transactions. The unaudited pro forma consolidated statement of operations and consolidated income has been prepared as if the Transactions occurred on January 1, 2017.

The unaudited pro forma combined statement of operations and comprehensive income has been prepared using the following information:

a) audited consolidated statement of operations and comprehensive income has of Gateway for the year ended December 31, 2017, which includes the results of the Southwest Bundle from May 9, 2017 and the results of the North Bundle from May 30, 2017;

b) unaudited pro forma combined schedule of revenue and direct expenses of the Southwest Bundle for the period from January 1, 2017 to May 8, 2017;

c) unaudited pro forma combined schedule of revenue and direct expenses of the North Bundle for the period from January 1, 2017 to May 29, 2017; and

d) unaudited pro forma combined schedule of revenue and direct expenses of the Central Bundle for the year ended March 31, 2018.

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                 (2) Significant accounting policies

The accounting policies we used to prepare the pro forma combined financial statement conforms to the accounting policies we have adopted, which are in compliance with IFRS as issued by the IASB, except that as noted in Note 1 Basis of presentation, the site-level financial information prepared or provided by OLG management for the Southwest Bundle for the period from January 1, 2017 to May 8, 2017, the North Bundle for the period from January 1, 2017 to May 29, 2017 and the Central Bundle for the for the year ended March 31, 2017 does not include certain information and adjustments necessary to conform with IFRS as issued by the IASB.

                 (3) Pro Forma adjustments and assumptions

The following adjustments have been recorded in the unaudited pro forma consolidated statement of operations and comprehensive income to reflect the pro forma effects of the Transactions described above:

a) To record the annual lease payments for the Sale and Leaseback Transactions of $43,596, calculated on a straight-line basis over the term of the lease.

b) To eliminate the amount of depreciation of property and equipment we recorded in the year ended December 31, 2017 related to the SLB Properties, as follows:

Grand Villa Casino Burnaby	$	5,792
Starlight Casino New Westminster		2,222
Cascades Casino Langley		3,861
	$	11,875

c) To adjust for the transaction costs expensed related to the acquisition of North ($2,553) and Southwest Bundle ($3,185)

d) To adjust the amount of interest expense we reported for the year ended December 31, 2017 to reflect the 2017 Refinancing, the 2018 Refinancing and the Term Loan Upsize calculated as follows:

Interest expense reported by the Company	$	(58,887	)
Interest expense calculated pursuant to the 2017 & 2018 Refinancing and July 2018 Term Loan Upsize		65,444
	$	6,557

e) To eliminate the loss on debt extinguishment from the 2017 Refinancing ($16,135)

f) We did not record a pro forma tax effect of these adjustments as the deferred tax assets are not realizable.

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RISK FACTORS

Investing in our common shares involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus, including our consolidated financial statements and the related notes appearing at the end of this prospectus, before making an investment decision. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, results of operations, financial condition and cash flows and, if so, our future prospects would likely be materially and adversely affected. If any of such events were to happen, the trading price of our common shares could decline, and you could lose all or part of your investment.

Risks Related to Our Business

Our business is subject to extensive governmental gaming regulation. Changes to the regulatory regime governing our business, our inability to renew or obtain new contracts governing our existing gaming operations or our inability to obtain new casino licenses could adversely affect us.

Our gaming operations are highly regulated. Subject to certain exemptions, the Criminal Code of Canada prohibits most forms of gaming and betting activity in Canada. While certain limited licensed gaming activities, such as those conducted and managed by charitable or religious organizations, are permissible, dice games and games operated on or through a computer, video device or slot machine may only be conducted through and managed by provincial governments. Subject to certain conditions, the Criminal Code of Canada also provides exemptions that allow any person, for the purposes of a lawful gaming activity in the applicable province, to do anything in the province, in accordance with the applicable law or license, that is required for the conduct, management or operation of such gaming. Accordingly, as a licensed service provider we must provide gaming-related services in accordance with applicable provincial laws and regulations. Gaming in the provinces in which we currently operate is highly regulated.

In addition to the mandate of the BCLC, the OLG and the AGLC to, among other things, conduct and manage gaming in British Columbia, Ontario and Alberta, respectively, the GPEB, the BCLC, the AGLC, the AGCO and the OLG have certain powers to oversee and/or regulate certain aspects of the gaming industry. There can be no guarantee that such Crown agencies and/or Gaming Regulators will not adopt policies or other changes that have the effect of, among other things, restricting gaming and the involvement or profitability of service providers. Possible restrictions could include, among other things, the hours/days of gaming operations, restrictions on advertising, betting limits, the number of tables or slot machines permitted, ages of permitted gamblers, casino locations and the future availability of, and/or the amount of additional commission available for, future capital expenditures under the Permitted Capital Expenditures Allowance (as described herein), the MIR program or any similar current or future program. In addition, any of the federal government of Canada, the provincial governments of British Columbia, Alberta or Ontario, or any applicable municipal or local government may enact, amend or repeal legislation (including of a public policy or social benefit nature, such as responsible gaming legislation, reduced operating hours or restrictions on marketing and advertising), or there may be changes in the jurisprudence that relate to the gaming industry, in each case that could have a material adverse effect on our business, financial condition or results of operations. Additionally, we may not continue to sustain the level of partnership we now have with the Gaming Authorities and Gaming Regulators, which could also have a material adverse effect on our business, financial condition or results of operations.

In British Columbia, we currently receive additional commissions through the BCLC’s MIR program for capital expenditures related to developing and improving our casinos. Similarly, we receive Permitted Capital Expenditures Allowances from the OLG for gaming-related capital expenditures related to developing and improving our casinos in Ontario. Although we expect past expenditures not yet submitted to the OLG and future capital expenditures to be eligible to earn additional commissions or qualify for Permitted Capital Expenditure

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Allowances, as applicable, there can be no assurance that this will be the case. If the BCLC or the OLG do not approve our capital expenditures, or if there are changes to the MIR program, or the terms and conditions applicable to the Permitted Capital Expenditure Allowances, our financial condition and results of operations may be adversely impacted and/or our ability to finance these expenditures may be adversely affected.

We may be subject to change to the contracts and licenses related to our existing operations and our contracts or licenses may be revoked or may not be renewed.

In British Columbia, our operations are conducted pursuant to operational services agreements with the BCLC. The OSAs allow us to provide operational services for each casino and CGC (other than Playtime Gaming Victoria) for a 20-year term, with an option, exercisable by the BCLC, to renew at the end of such term.

We expect that our continued successful operations will lead BCLC to exercise its renewal rights with us unless we are in breach of the OSAs, however such renewal is at the discretion of BCLC. Furthermore, a breach of the OSAs could result from certain specified occurrences, including non-performance, bankruptcy or insolvency. Because of such a breach, the BCLC could suspend or terminate our right to provide the operational services under the OSAs. Suspension or termination of any of the OSAs would result in the loss of our ability to conduct business at our casinos or CGCs located in British Columbia, as applicable. In addition, the BCLC may also claim under the indemnities we provide to them under the OSAs for any liability they may suffer from our operations. The occurrence of any of these events could have a significant adverse effect on our business, financial condition and results of operations.

In the Edmonton region, each of our casinos can only be operated under casino property licenses granted by the AGLC. Although we have no reason to believe that our licenses will not be reissued upon expiry, there can be no guarantee that the casino property licenses under which our Alberta casinos operate will be reissued, or, if reissued, that they will be on the same or as favorable terms as the existing casino property licenses. The AGLC has enforcement powers with respect to licenses and may impose conditions or fines or suspend or cancel a casino property license for certain reasons, including non-performance or breach and bankruptcy or insolvency. Although it has not been the practice of the AGLC to cancel licenses, suspension or cancellation of such licenses could have a significant adverse effect on our business, financial condition and results of operations.

The Southwest Ontario, North Ontario and Central Ontario properties are operated under COSAs, which were entered into with the OLG on closing of each acquisition. Renewal of the COSAs is subject to the absolute discretion of the OLG, and we cannot guarantee that the COSAs will be renewed on the same terms, or at all. The COSAs also set out certain events of default, including, among other things, a material adverse effect resulting from our failure to comply with certain obligations set out under the COSAs, an act of insolvency, and any inaccuracy or misrepresentation in any representation or warranty of the service provider in the COSAs. See “Regulatory and Licensing Matters”. Upon the occurrence of an applicable event of default as set out in the COSAs, the OLG could, at its option, suspend or terminate our right to provide all or any part of the services under the COSAs in respect of all or any one or more casinos to which the applicable COSA relates. In addition, the OLG and certain other indemnified persons may rely on the indemnity that is provided to them in the applicable COSA, should any of them suffer certain liabilities from our operations or in certain other specified circumstances. The occurrence of any of these events could have a significant adverse effect on our business, financial condition and results of operations.

In addition, in October 2018, it was announced that OLG and the operator of the horse racing facilities at Hiawatha Horse Park in Sarnia have an agreement in principle for the introduction of a slot-machine gaming facility within the Hiawatha Horse Park. Pursuant to our operating agreements with OLG, we have the right to become the operator of such new facility, subject to reaching an agreement with the OLG on the terms of such operations. There can be no assurance that we will reach an agreement with the OLG on the terms of such operations, or that if we do, that the facility will perform well.

In addition to the requirements and restrictions pursuant to the COSAs, we are registered with the AGCO as a service provider. The AGCO has established stringent terms of registration, which must be complied with to maintain our registration in good standing. We may not be able to comply with certain of the terms of registration at all times, and consequentially, the AGCO may discontinue the registration.

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Our gaming operating agreements and licenses may also change from time to time. Recently, we entered into the OSAs with the BCLC to replace the MCOSA, CGCOSAs and BOSAs (other than the Playtime Gaming Victoria BOSA). Certain changes to the OSAs may negatively affect our business, financial condition or results of operations. The impact of the OSAs or any changes to our gaming operating agreements or licenses is difficult to predict, and may materially and adversely affect our business, financial condition and results of operations.

At any time, the gaming regulators may conduct inspections to monitor our compliance with legislation, regulations, rules and conditions of registration and operating agreements. We may be subject to disciplinary action by the gaming regulators if we are informed that a person is unsuitable to have a relationship with us and we fail to pursue all lawful efforts to require compliance with gaming control legislation or our operating agreements. If we are unable to comply with any current or future reporting or registration requirement, our registrations as a gaming service provider may be suspended or revoked, which would adversely affect our business.

The Gaming Regulators in the provinces in which we operate may also, as applicable, revoke or refuse to issue or renew our registration or licenses, or refuse to renew the terms of our operating agreements for reasons including: if we, or one of our directors, officers, employees or associates (i) is considered to be a detriment to the integrity of gaming; (ii) no longer meets a licensing or registration requirement; (iii) has breached a condition of licensing or registration or an operating agreement with a lottery corporation; (iv) has made a material misrepresentation to the Gaming Regulators; (v) has been refused a similar license or registration in another jurisdiction; (vi) has held a similar license or registration, or a license which has been suspended or cancelled; or (vii) has been convicted of an offense that calls into question our integrity.

Our ability to obtain additional casino licenses or operating agreements is not guaranteed.

Any new casino to be operated by us will require the entering into or amendment of an operating agreement (in the case of a gaming property in British Columbia or Ontario) or a casino property license from the AGLC (in the case of a casino in Alberta). The process for obtaining a new operating agreement or license (or amending an existing operating agreement or license) is complex and we anticipate that there would be intense competition for new operating agreements or licenses. There can be no guarantee that the BCLC or the OLG will agree to enter into or amend an operating agreement or that the AGLC will grant a new license for any new gaming property that we might propose in the provinces of British Columbia, Ontario or Alberta in the future. In addition, in January 2015, the AGLC declared an indefinite moratorium on the issuance of new casino licenses and is not accepting applications for new casino properties. Failure to obtain these licenses or agreements or amendments would potentially limit our growth, thereby adversely affecting our growth potential. In addition, if we were to expand our business to other provinces and territories in Canada or other jurisdictions we would be required to comply with the regulatory regimes of such provinces and territories or jurisdictions and obtain licenses to operate therein. As in British Columbia, Ontario and Alberta, the process for regulatory approval and the obtaining of a new license or operating agreement is complex and there is intense competition for new and operating agreements. Consequently, there can be no assurance that we will be able to expand our business into other provinces and territories or other jurisdictions.

Liquor laws and associated liquor licenses in British Columbia, Ontario or Alberta may affect our operations.

The use and sale of alcohol in gaming properties is highly regulated in British Columbia, Ontario and Alberta through the issuance, monitoring and enforcement of liquor license requirements and related liquor license conditions. There is no assurance that the regulation of the use and sale of alcohol in gaming properties will not change in the future. Changes to the regulations regarding the issuance, monitoring and enforcement of liquor license requirements and related liquor license conditions could adversely affect our operations and casino gaming revenue.

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The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of unaudited combined schedules of revenue and direct expenses only and does not represent complete financial statements; care should be taken when relying upon such information.

The annual financial information and results of the Southwest Ontario properties, North Ontario properties and Central Ontario properties included in this prospectus were prepared or provided by the OLG and consist of combined schedules of revenue and direct expenses that are not fully consistent with the statements provided for significant acquisitions under Sections 13 and 15(d) of the Exchange Act and do not include a balance sheet, statements of cash flows or the related footnotes to such financial statements. In addition, this financial information does not include certain information and adjustments necessary to conform with IFRS as issued by the IASB.

The unaudited pro forma financial information included in this prospectus under the headings “Selected Summary Historical Financial Information” and “Selected Summary Pro Forma Financial Information” is based on unaudited financial information prepared or provided by the OLG. Specifically, (i) the Southwest Bundle financial information is based on unaudited site financial information prepared by the OLG for the period of January 1, 2017 to May 8, 2017; (ii) the North Ontario bundle financial information is based on unaudited site financial information prepared by the OLG for the period of January 1, 2017 to May 29, 2017; and (iii) the Central Bundle financial information is based on unaudited site financial information prepared or provided by the OLG for the period of January 1, 2018 to July 17, 2018 and the audited combined schedules of revenue and direct expenses prepared or provided by the OLG for the twelve months ended March 31, 2018. Additionally, unless otherwise noted, the unaudited site-level financial information prepared or provided by OLG management for the Southwest Bundle for the period from January 1, 2017 to May 8, 2017, the North Bundle for the period from January 1, 2017 to May 29, 2017 and the Central Bundle for the year ended March 31, 2017 does not include certain information and adjustments necessary to conform with IFRS as issued by the IASB. We cannot assure that this financial information is accurate, and when we file our financial statements after the integration of the financial results and operations from these properties with our own, such amounts may differ materially from the amounts indicated in this prospectus. Investors should not place undue reliance on this information and such information should be read together with the pro forma financial statements and historical audited financial statements included herein.

The pro forma financial statements included in this prospectus are presented for illustrative purposes only and may not be an indication of our financial condition or results of operations following the Ontario acquisitions.

The pro forma financial statements included in this prospectus are presented for illustrative purposes only, are based on various adjustments and assumptions and may not be an indication of our financial condition or results of operations following the Ontario acquisitions. Our actual financial condition and results of operations following the Ontario acquisitions may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial data may not prove to be accurate, and other factors may affect our financial condition or results of operations following the Ontario acquisitions.

Changes in accounting standards could affect our reported results.

The International Accounting Standards Board, or other regulatory bodies, periodically introduce modifications to financial accounting and reporting standards or issue new financial accounting and reporting standards under which we prepare our consolidated financial statements. These changes can materially affect the means by which we report financial information, affecting our reported results of operations. Also, we could be required to apply new or revised standards retroactively.

More specifically, several new or amended standards and interpretations to IFRS are expected over the coming years. In particular, both IFRS 9, Financial Instruments and IFRS 15, Revenues from Contracts with

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Customers went into effect on January 1, 2018 and IFRS 16, Leases will go into effect on January 1, 2019. With respect to IFRS 9 and IFRS 15, we have finalized our assessment of the impact thereof. With respect to IFRS 16, during 2018, we will gather and update information related to leases, assess extension and termination options as well as possible exemptions, and identify the appropriate discount rate.

Currently, we cannot assure you that the changes with respect to IFRS 16 will not substantially affect our reported results of operations. It is anticipated that there will be a material impact as a result of the recognition of a right of use asset and a lease liability for leases which are currently treated as operating lease by us.

The gaming industry is highly competitive and we may lose market share to our local competitors.

Despite the high level of regulation in the provinces in which we operate, we often compete directly with other gaming properties operating in surrounding regions. In recent years, with fewer new gaming regions in Canada for development, competition in existing markets has intensified. As a result, we, along with many other gaming service providers, have invested in expanding existing properties. The expansion and aggressive marketing strategies of our competitors have increased competition in many of the markets in which we operate. If our existing competitors operate more successfully or if new or existing competitors enhance, expand or market their gaming properties more aggressively, or if additional casinos are established in and around the locations in which we conduct business, including in the event federal or provincial regulators with which we work closely alter the manner in which they grant licenses to our competitors, our market share may be eroded. The expansion of casino or other forms of gaming in or near any geographic area from which we attract or expect to attract a significant number of our customers (including outside of Canada) could have a significant adverse effect on our business, financial condition and results of operations.

If we fail to successfully implement our growth strategies, which includes acquiring new properties and expanding, renovating and relocating our existing properties, our ability to increase our revenues could be adversely affected.

Part of our growth strategy includes opportunistically acquiring and operating new gaming properties and improving the customer experience at our existing properties. This will require substantial capital investment, particularly in regions within Canada where we currently do not operate. Our ability to successfully acquire and operate new gaming properties depends on a number of factors that may be outside of our control, including, among others, our ability to:

• successfully compete for new gaming contracts;

• identify desirable gaming locations;

• secure financing;

• secure governmental, municipal and other necessary approvals and permits;

• negotiate acceptable lease terms, including favorable levels of tenant improvement allowances;

• maintain out-of-pocket build-out costs in line with our economic model, including by managing construction costs at reasonable levels;

• hire, train and retain a growing workforce of employees, including key management personnel;

• successfully integrate new gaming properties into our existing control structure and operations, including our information technology systems;

• increase brand awareness;

• identify and satisfy the gaming preferences of our customers in new geographic areas and markets; and

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• address competitive, marketing, distribution and other challenges encountered in connection with expansion into new geographic areas and markets.

To the extent that we acquire gaming properties in markets where we already have existing gaming properties, we may experience reduced revenues at those existing gaming properties.

There is no guarantee that newly opened gaming properties will be received as well as, or achieve profitability levels comparable to those of, our existing gaming properties within our estimated time periods, or at all. If our gaming properties fail to achieve, or are unable to sustain, acceptable profitability levels, our business may be materially adversely affected and we may incur significant costs associated with closing or relocating gaming properties. In addition, our current expansion plans are only estimates, and the actual number of gaming properties that we open, the timeline on which we do so and the actual number of suitable locations for our new gaming properties could differ significantly from these estimates. If we fail to successfully open and operate new gaming properties and execute our growth plans, the price of our common shares could decline.

We compete with online gaming and entertainment companies that provide gaming and entertainment experiences, which could adversely affect our future casino gaming revenue.

In addition to bricks-and-mortar casinos, we compete with online gaming and other forms of entertainment. Online gaming platforms and certain provincial gaming corporations offer a variety of online games, many of which simulate the games on our properties. The sophistication and availability of online gaming, both domestically and internationally, is continuing to improve and it is possible that these platforms will develop into a greater form of competition, which could have an adverse impact on our business, financial condition and results of operations.

We also compete with other non-gaming resorts and vacation areas and entertainment businesses. If our national and global competitors offer more attractive gaming and non-gaming experiences, there is a risk that our customers, and particularly the high limit players that frequent our properties, may choose to travel away from our properties to our competitors or other entertainment destinations. A significant reduction in high limit play at our properties could have a significant adverse effect on our business, financial condition and results of operations.

We cannot assure that our anti-money laundering and anti-corruption policies will be effective in preventing the occurrence of money laundering or other illegal activities.

Certain industries in Canada, like the gaming sector, are subject to the PCMLTFA. Casinos in Canada operate under, and are required to meet, the strict anti-money laundering, customer identification and reporting requirements set out in the PCMLTFA.

A 2016 report commissioned by GPEB on anti-money laundering practices in British Columbia revealed the existence of an investigation into the alleged flow of unsourced cash at a competitor casino. In September 2017, the British Columbia Government hired an independent investigator, Peter German, to commission a report into money laundering and other illegal practices at casinos in the Lower Mainland of British Columbia, which was received by the Attorney General of British Columbia on April 3, 2018 and released publicly on June 27, 2018. Dr. German’s report focused on the role of partners and agencies, including provincial regulators, federal regulators, law enforcement and operators such as Gateway. The 48 substantive recommendations contained in the report include a potential shift to a new standards based model (more similar to that in Ontario) and a number of recommendations to shift certain responsibilities from the Gaming Regulators to private operators, such as responsibilities with respect to AML annual risk assessments, reporting with FINTRAC, conducting due diligence on suspicious transactions and overseeing cash alternatives and related compliance. In November 2018, the House of Commons of Canada released the report of the Standing Committee on Finance which focused on the anti-money laundering and anti-terrorist financing regime’s legislative and regulatory gaps, the exchange of

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information and the privacy of Canadians, ways of strengthening intelligence capacity and enforcement measures, as well as the modernization of the regime. The substantive recommendations contained in the report include, among others, that (i) the Government of Canada expand FINTRAC oversight to ensure that all casino operators, employees, and frontline gaming personnel are trained in anti-money laundering legislation, (ii) the Government of Canada establish an information sharing regime through FINTRAC and provincial gaming authorities to ensure more accurate and timely reporting, and (iii) the Government of Canada enhance the direct reporting system of casinos to FINTRAC through the suspicious transaction reports to include suspicious activities. While we currently believe that the recommendations will not have a material impact on our business, there can be no assurance as to what the business, operational and financial impacts from the recommendations or the implementation thereof will be until specific amendments are proposed to gaming laws and regulations.

Although we have a compliance program that addresses anti-money laundering program and our properties are subject to anti-money laundering programs run by the Gaming Authorities, there is no guarantee that our operations are protected from being used to launder illicit funds or that our program will be effective in detecting all such activities. Additionally, casinos and the gaming industry are a regulatory focus for anti-money laundering violations, and any repeated money laundering violations could affect our access to credit from financial institutions. Thus, any incidents of money laundering, accusations of money laundering or regulatory investigations into possible money laundering activities involving us, our employees or our customers would have a material adverse impact on our reputation, relationship with our regulators, business, cash flows, financial condition, prospects and results of operations.

Our casino gaming revenue is currently concentrated in the Greater Vancouver Region and Ontario, which makes us especially subject to economic and competitive risks associated with the conditions in those areas.

Because our revenue and profits are primarily derived from the Greater Vancouver Region and Ontario, we are subject to greater risks from local conditions than a gaming company with more geographically diverse operations. A decrease in revenue from, or increase in costs for, our casinos located in the Greater Vancouver Region or Ontario is likely to have a proportionally higher impact on our business, financial condition and results of operations than it would for a gaming company with revenue generated from more geographically diverse operations.

More generally, our net revenues are highly dependent upon the volume and spending levels of our customers. Decreases in discretionary consumer spending brought about by weakened general economic conditions may affect our revenues. Our business results are related to the economic and competitive conditions in the regions we operate in, and any downturn in the economic conditions or increase in competition in these regions will have a material adverse effect on our business, financial condition and results of operations.

Our business is particularly sensitive to reductions in discretionary consumer and corporate spending as a result of global and regional economic conditions.

Consumer demand for casinos and hotels and for the type of amenities that we offer is particularly sensitive to changes in the global economy, which adversely affect discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general global and regional economic conditions, high unemployment, weakness in housing or oil markets, perceived or actual changes in disposable consumer income and wealth, an economic recession and changes in consumer confidence in the global economy, or fears of war and future acts of terrorism have in the past and could in the future reduce customer demand for the amenities and leisure activities we offer, and may have a significant negative impact on our operating results. Additionally, consumer demographics and preferences may evolve over time, which, for example, has resulted in growth in consumer demand for non-gaming offerings. Our success depends in part on our ability to anticipate the preferences of consumers and react to those trends and any failure to do so may negatively affect our operating results.

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Global economic conditions may have a material adverse effect on our business, financial condition and results of operations.

In recent years, global economic conditions have resulted in tighter credit conditions and recessions in most major economies. The Canadian economy, and in particular British Columbia and Ontario, were not as adversely impacted by these economic conditions as the economies of the United States and other industrialized countries. Although we were not as adversely affected by these recent economic conditions as other gaming companies across North America, future economic downturns may affect our business significantly in a number of ways. For example, our business offers a highly discretionary set of entertainment and leisure activities and amenities, and if a similar global economic downturn occurs, discretionary consumer spending may be adversely affected and our revenue may decrease while some of our costs would remain fixed or increase. Additionally, if we were to require access to the capital markets in the future during such a downturn, there can be no assurance that we will be able to secure financing.

Changes to our customer base may adversely affect our business and results of operations.

We cater to our customer base by providing entertainment suited to the demographics of each local region in which we operate, in order to maximize customer retention and secure repeat visitors. Changes in our customer demographics or to local economic conditions or our potential inability to cater or respond to those changes may have an adverse effect on our business, financial condition and results of operations.

Unusual weather, natural disasters, geo-political events or acts of terrorism could adversely affect our operations and financial results.

Extreme weather conditions in the areas in which our properties are located could adversely affect our business. Frequent or unusually heavy snowfall, ice storms, rainstorms, forest fires or other extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our properties and thereby reduce our revenue or otherwise adversely affect our business. For example, revenues were negatively impacted in the first three quarters of 2017 at our four Thompson-Okanagan casinos. Severe snowfall and subsequent flooding in the Okanagan region depressed revenues during the first and second quarter. During the third quarter, the Okanagan region saw extreme forest fires and many patrons in the area had to be evacuated. The fires caused poor air quality and a sharp decline in local patrons and tourists to these casinos.

In addition, natural disasters such as hurricanes, tornadoes and earthquakes, or a combination of these or other factors, could severely damage or destroy one or more of our properties located in the affected areas, thereby disrupting our business operations.

In addition, unstable political conditions or civil unrest, including terrorist activities, military and domestic disturbances, changes in trade policy and conflicts, may result in political or economic instability and could have a material adverse effect on our business and results of operations.

We face the risk of fraud or cheating commonly faced by the gaming business, which could adversely affect our results of operations.

Players in our casino may commit fraud or cheat in order to increase their winnings. Acts of fraud or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers or other casino or gaming area staff. Failure to discover such acts or schemes in a timely manner would negatively impact our gaming revenue. In addition, negative publicity related to such schemes could have an adverse effect on our reputation and have a significant adverse effect on our business, financial condition and results of operations.

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We are subject to the reputational challenge of operating in the gaming industry.

The gaming industry is subject to negative publicity relating to perceptions of underage gaming, exploitation of vulnerable customers and the historical link of the gaming industry to criminal enterprises. As an operator within the industry, such negative publicity can adversely affect our reputation and correspondingly affect our financial performance.

Historically, gaming has been considered to be an undesirable activity in Canada. Until 1969, gaming in most forms, with the exception of horseracing, was a criminal offense. Subject to certain exemptions, the Criminal Code of Canada currently prohibits most forms of gaming and betting activity in Canada. Casino operators still face stigma in many areas of day-to-day operations. Negative public perception of gaming within any region lessens the likelihood that a new casino can be established there or that an existing casino will be financially viable, which could affect possible expansions. Any increase in the negative public perception of gaming could have a negative impact on our business and results of operations.

We are subject to cybersecurity risk.

We maintain confidential information regarding its business plans, strategy and potential strategic opportunities in our computer systems. We also maintain an internet website. Despite the implementation of network security measures, this infrastructure may be subject to physical break-ins, computer viruses, programming errors, attacks by third parties or similar disruptive problems. Advances in computer and software capabilities and encryption technology, new tools and other developments may increase the risk of such a breach. A security breach of computer systems could disrupt operations, damage our reputation, result in legal or regulatory liability and could have a material adverse effect on our business and results of operations.

Compromises of our information systems or unauthorized access to confidential information or our customers’ personal information could materially harm our reputation and business.

We collect and store confidential, personal information relating to our customers for various business purposes, including marketing and financial purposes, and credit card information for processing payments. For example, we handle, collect and store personal information in connection with customers staying at our hotels and enrolling in our customer loyalty programs. We may share this personal and confidential information with vendors or other third parties in connection with processing of transactions, operating certain aspects of our business or for marketing purposes. Our collection and use of personal data are governed by privacy laws and regulations. Privacy law is an area that changes often and varies significantly by jurisdiction. We may incur significant costs in order to ensure compliance with the various applicable privacy requirements. In addition, privacy laws and regulations may limit our ability to market to our customers.

Although we have taken steps designed to safeguard our customers’ confidential personal information, our network and other systems, and those of third parties, such as service providers, could be compromised by a third-party breach of our system security or that of a third-party provider or as a result of purposeful or accidental actions of third parties, our employees or employees of a third party. Advances in computer and software capabilities and encryption technology, new tools and other developments may increase the risk of such a breach. As a result of any security breach, customer information or other proprietary data may be accessed or transmitted by or to a third party. Despite these measures, there can be no assurance that we are adequately protecting our information.

Any loss, disclosure or misappropriation of, or access to, customers’ or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information. Such legal claims, legal proceedings or liability could disrupt our operations, damage our reputation and expose us to claims from customers, financial institutions, regulators, payment card associations, employees and other persons, any of which could have an adverse effect on our financial condition, results of operations and cash flow.

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Canada’s Anti-Spam Legislation, or CASL, also restricts our ability to send commercial “electronic messages,” defined to include text, sound, voice and image messages to email, or similar accounts, where the primary purpose is advertising or promoting a commercial product or service to our customers and prospective customers. CASL requires, in part, that a sender have consent to send a commercial electronic message, and provide the customers with an opportunity to opt out from receiving future commercial electronic email messages from the sender. Failure to comply with the terms of CASL or any proposed regulations that may be adopted in the future could have a negative impact on our reputation and subject us to material monetary penalties.

The Canada Revenue Agency, or CRA, has recently confirmed various notices of reassessment and/or notices of determination of loss for our taxation years ended December 31, 2010 to 2014 and December 31, 2016, in which the CRA recharacterized certain amounts received by us as income and reclassified certain expenditures made by us. We have appealed from these reassessments and loss determinations to the Tax Court of Canada. If such appeal is not successful, the amount of our non-capital loss carryforwards will be reduced and we will begin to incur income tax sooner than otherwise anticipated.

The CRA has issued notices of reassessment and/or notices of determination of loss to us for the taxation years ended December 31, 2010 to 2014 and December 31, 2016 in which the CRA (i) treated amounts received by us from the BCLC on account of facility development commissions, or FDCs, as taxable income, and (ii) reclassified certain costs incurred by us in 2010 as “eligible capital expenditures” rather than the cost of Class 14 depreciable property. In addition, the CRA has also issued notices of reassessment or notices of determination of loss to our subsidiaries Boardwalk Gaming Squamish Inc., or Boardwalk Squamish, and 427967 B.C. Ltd., or 427967, for their taxation years ending December 31, 2011, 2012 and 2014 in which the CRA treated amounts received by them from the BCLC on account of FDCs as taxable income.

We duly filed notices of objection with the Appeals division of the CRA to the reassessments and loss determinations referred to above. In August, 2018 we received notices of confirmation from the CRA advising that the CRA had reviewed the objections and was confirming the reassessments and loss determinations.

We disagree with the CRA’s position, and intend to vigorously defend our tax filing position. Accordingly, we have appealed to the Tax Court of Canada with respect to the reassessments and loss determinations. The likely timing to resolve these issues may take several years.

If our appeal is not successful and the CRA’s position ultimately prevails, then based on the notices of reassessment and notices of determination of loss received from the CRA, our net income (loss) for tax purposes for the taxation years ended December 31, 2010 to 2016 would increase (decrease) by $1.7 million, $30.9 million, $31.2 million, $30.1 million, $31.8 million, $28.5 million, and $28.5 million respectively. In that case, we have sufficient non-capital loss carry-forwards to offset the additional income reassessed; however, our non-capital losses available for carryforward to subsequent taxation years would be reduced, and we estimate that we would begin to incur liability for income tax sooner than otherwise currently anticipated.

No provision has been made in the historical financial statements or pro forma financial statements included in this prospectus for the aforementioned reassessments and/or determinations of loss. As a result, the pro forma financial statements may not prove to be accurate to the extent the reassessments and/or determinations of loss are ultimately upheld. For more information, please see note 11 of our condensed consolidated interim financial statements and note 16 of our audited consolidated financial statements as at December 31, 2017 and 2016, which are attached to this prospectus.

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In connection with our acquisition of POM, we acquired POM’s non-capital losses, which NMRC has represented to be not less than $217.0 million. However, our ability to use these or other non-capital losses may be limited in the future.

As at September 30, 2018, we had non-capital loss carryforwards totaling approximately $307 million, of which approximately $90 million were derived from our gaming business and approximately $217 million were acquired by us as part of the POM Acquisition (as defined herein). The Canadian tax authorities could potentially seek to challenge the amount of such losses or our ability to use such losses against future income, in which case we may be subject to income tax sooner than anticipated. In addition, if we were to undergo a change of control for Canadian tax purposes (whether as a result of this offering or otherwise), we would no longer be able to utilize the POM Acquisition losses and our ability to utilize any other losses would potentially be subject to certain limitations. Furthermore, our ability to utilize non-capital losses of other companies that we may acquire in future could be subject to limitations.

From time to time, we are a defendant in a variety of litigation matters that may cause us to pay damages if we are unsuccessful in defending against such actions or unable to cover damages with insurance proceeds.

We are involved, from time to time, in a variety of litigation or regulatory investigations arising out of our business, including actions related to patron claims, labor and employees, BCLC’s Voluntary Self-Exclusion Program, GameSense Self Exclusion Program, regulatory compliance and other operational matters. We establish reserves for matters in which losses are probable and can be reasonably estimated. While we believe that we have established adequate accruals for our expected future liability with respect to our pending legal actions and proceedings, our liability with respect to any such action or proceeding may exceed our established accruals. It can be particularly difficult to gauge the potential impact of litigation that involves novel claims, such as claims based on the BCLC’s Voluntary Self-Exclusion Program and GameSense Self Exclusion Program which are premised on customers’ claims that they were permitted to participate in gaming activities on our gaming properties despite having voluntarily registered themselves with the BCLC’s Voluntary Self-Exclusion Program. These claims are also frequently pursued as class actions. There can be no assurance that our established accruals or insurance will cover all claims that may be asserted against us. Should any final judgments or settlements not be adequately covered by our established accruals or insurance, such uncovered losses could increase our costs and thereby lower our profitability, as well as adversely affect our cash flows and liquidity.

A significant portion of our labor force is covered by collective bargaining agreements. Wage and/or benefit increases resulting from new collective bargaining agreements or our inability to reach an agreement with the unions could have an adverse impact on our operations.

As of September 30, 2018, approximately 57% of our employees were covered by 21 separate collective bargaining agreements which must be renegotiated every few years. A prolonged dispute with the unionized employees or any labor unrest, strikes or other business interruptions in connection with labor negotiations or other employee compensation could have an adverse impact on our operations. Further, adverse publicity in the marketplace related to union messaging could further harm our reputation and reduce customer demand for our services.

For information on our historical financial results from the Thompson-Okanagan region, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Reportable Segments—Operating Results—Detailed Segment Information—Thompson-Okanagan Region”. We can provide no assurance as to when this work stoppage will cease and a new collective agreement will be entered into.

On June 29, 2018, the BCGEU members at our Thompson-Okanagan properties started strike action. The strike covered approximately 670 non-managerial front-line employees at the Thompson-Okanagan properties,

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such as dealers, slot machine attendants, F&B servers and security staff, which represented between approximately 75% and 81% of the personnel at these properties (depending on the property). While managers and supervisors continued to operate the properties with reduced hours and reduced services, the work stoppage adversely affected our financial results from the properties. We resolved the strike in early November 2018 and since November 13, 2018, all Thompson-Okanagan properties are again open 7 days a week, operating at near normal hours. However, we can provide no assurance as to what the ultimate impact on our results of operations will be as a result of the strike action.

In November 2018, we failed to ratify our collective bargaining agreements with the BCGEU with respect to our Grand Villa Casino Burnaby and Starlight Casino New Westminster. We have been advised by the BCGEU that they intend to hold a strike vote for Starlight New Westminster on November 19, 20 and 22 and to hold a strike vote at Grand Villa Burnaby on November 20, 21 and 23. If a strike vote is passed, the BCGEU would be in a position to initiate a strike at either facility, or both, within 72 hours of providing the company notice. While we intend to work towards a mutually agreeable solution with the BCGEU, we cannot be certain of the outcome of the strike vote, nor of the ultimate timing for ratifying new collective agreements at these two sites.

Strikes, lockouts, work stoppages or similar actions could restrict our ability to operate our properties and service our customers and may negatively affect customer experience and access, as well as our business financial condition and results of operations. In addition, wage and benefit increases resulting from new labor agreements and the certification of additional bargaining units at our properties could have an adverse impact on our results of operations. See “Business—Employees”.

If we are unable to attract and retain qualified and skilled employees, our ability to effectively operate our properties may be impaired, which could have a material adverse effect on our businesses and results of operations.

Our businesses are dependent upon attracting and retaining a large number of skilled employees who reflect our brand images and cultures. Many of these employees are in entry level or part-time positions with historically high rates of turnover. If we are unable to hire, train and retain employees capable of consistently providing a high level of service to our customers, we may not be able to maintain our competitive strength in offering our customers a favorable gaming experience or to fully realize the benefits expected to result from our formal customer service initiatives and targeted marketing initiatives, which could lead to decreased foot traffic, as well as to increased costs associated with hiring and training new employees.

Our ability to meet our labor needs while controlling the costs associated with hiring and training new employees is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and changing demographics in Canada. In particular, recently enacted and proposed minimum wage increases in several provinces of Canada will have an impact on labor costs and our labor force, where the applicable legislation is enacted. Changes that adversely affect our ability to attract and retain quality employees could have a material adverse effect on our businesses and results of operations.

Municipal restrictions or prohibitions may affect our operations.

Municipalities in British Columbia, Ontario and Alberta have the right to restrict or prohibit gaming properties, including slot machines, within their boundaries. Gaming proposals are often controversial land use issues and can be highly contested by local politicians, residents and other intervenors. In the event that a host municipality passes a by-law or zoning change prohibiting or restricting gaming properties, our business, financial conditions and future prospects would be adversely affected.

Renewal of lease agreements for our properties may not be obtained or if obtained, may be on less favorable terms.

A majority of our properties operate out of premises that are leased under lease agreements. There is a risk that we may not be able to negotiate lease renewals with landlords on terms that are commercially reasonable or

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acceptable to us or that we may not be able to successfully relocate our properties if we decide not to renew any one or more of our leases. This could negatively affect our business and results of operations.

There are risks and uncertainties relating to the Sale and Leaseback Transactions

On closing of the Sale and Leaseback Transactions, we transferred our freehold interest in the lands and premises constituting each of the SLB Properties. Although the operation of the properties on the SLB Properties is expected to continue in the ordinary course, the long-term Leases may, in certain circumstances, be terminated or, subject to the approval of the BCLC, assigned to other third-party landlords. Any such termination or assignment could have a significant adverse effect on our business, financial condition and results of operations at our Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley.

The long-term Leases will also require significant periodic cash payments in respect of the required rent thereunder, which we have not historically incurred for the SLB Properties, and other allocated operating and maintenance costs. The increase in our rent expense may have an adverse impact on our future operations and profitability. The sale of each of the SLB Properties also eliminates these significant assets from our real property holdings, which may impact our ability to secure financing in the future (at commercially reasonable interest rates or at all), as the number and value of assets available to us to pledge as collateral is reduced as a result of the Sale and Leaseback Transactions.

Chances Squamish and Casino Rama Resort are leased property on reserve lands (as such term is defined in the Indian Act (Canada)), which means there is no guarantee of title to our property under the Indian Land Registry System and the validity of our lease is subject to potential approval irregularities that can arise with any reserve land.

Chances Squamish is leased property pursuant to a lease with the Government of Canada and the Squamish Indian Band in respect of certain lands on Stawamus Indian Reserve No. 24, which are held by the federal Crown for the use and benefit of the Squamish Indian Band. Our leasehold interest in the Chances Squamish lands is registered in the Indian Land Registry System. The main parcel of the Casino Rama Resort land is subject to a lease between Casino Rama Inc., an affiliate of Rama Nation, and the Government of Canada pursuant to a commercial ground lease. On May 1, 2018, the Chippewas of Rama First Nation Land Code came into effect, which transferred land administration for these lands from the Government of Canada to Rama Nation pursuant to the First Nations Land Management Act (Canada). The Casino Rama Resort property is subleased by Casino Rama Inc. to the OLG. The OLG in turn sub-subleases the Casino Rama Resort property to us. Our sub-sub-leasehold interest in the main parcel of the Casino Rama Resort land is registered in a first nations land registry system created pursuant to such First Nation Land Management Act (Canada). Such registry systems are not Torrens systems, and as such do not guarantee title nor provide an assurance fund to indemnify registrants against losses arising from, among other things, errors made by the registrar or from fraud. As with all such lands, potential irregularities in either the approval of the designation of the lands as reserve lands, the lease documents themselves, the registration systems, or the lease approval process of the band council are a risk to the validity of the lease. While we have no reason to believe that any such irregularities have occurred, there can be no assurance in this regard.

The unique ownership structure of the Casino Rama Resort operations adds a heightened level of risk as compared to other casino operations.

The main parcel of the Casino Rama Resort land is subject to a lease between Casino Rama Inc., an affiliate of Rama Nation, and the Government of Canada pursuant to a commercial ground lease. On May 1, 2018, the Chippewas of Rama First Nation Land Code came into effect, which transferred land administration for these lands from the Government of Canada to Rama Nation pursuant to the First Nations Land Management Act (Canada). The Casino Rama Resort property is subleased by Casino Rama Inc. to the OLG. The OLG in turn sub-subleases the Casino Rama Resort property to us. Certain adjacent lands are also owned by Rama Nation and

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leased directly to OLG, and the OLG then subleases this land to us. Certain rights and obligations of Casino Rama Inc., Rama Nation and the OLG are documented in other ancillary agreements.

Given the unique ownership structure and the number of interested parties with various rights, including approval rights and rights to consultation, we are likely to encounter more extensive reporting obligations than we do at our other properties and will be required to address the rights held by interested parties, which may result in delays or other issues when making major decisions regarding the operation or development of this property. Moreover, given that (i) our direct contractual relationship is with the OLG, (ii) there are certain communication obligations and rights with Casino Rama Inc. and the Rama Nation that the OLG retains, and (iii) we have no contractual relationship with the Rama Nation, we must rely on the OLG to enforce any rights against Casino Rama Inc. or the Rama Nation.

Delays or impediments to effecting operational or development decisions with respect to the Casino Rama Resort property, or an inability to enforce our rights against one or more interested parties, would have an adverse effect on our business, financial condition and results of operations.

We are dependent upon technology services and electrical power to operate our business, and if we experience damage or service interruptions, we may have to cease some or all of our operations, resulting in a decrease in revenue.

Our gaming operations rely heavily on technology services and an uninterrupted supply of electrical power. Our security system and all our slot machines are controlled by computers and reliant on electrical power to operate. Without electrical power or the supply of technology services needed to run our computers, we may be unable to conduct all or part of our gaming operations. Any unexpected interruption in our technology services or our electrical power supply is likely to result in an immediate, and possibly substantial, loss of revenue due to a shutdown of our gaming operations. Although our systems have been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences, they remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks, computer viruses, computer denial-of-service attacks and similar events.

The concentration and evolution of the slot machine manufacturing industry or other technological conditions could impose additional costs on us.

A substantial majority of our revenue will be attributable to slot machines operated by us at our various casinos. It is important that, for competitive reasons, we offer the most popular and up-to-date slot machine games with the latest technology to our guests.

In recent years, the prices of new slot machines with additional features have escalated faster than the general rate of inflation. Furthermore, in recent years, slot machine manufacturers have frequently refused to sell slot machines featuring the most popular games, instead requiring participation lease arrangements in order to acquire the machines. Participation slot machine leasing arrangements typically require the payment of a fixed daily rental. Such agreements may also include a percentage payment of coin-in or net win. Generally, a participation lease is substantially more expensive over the long term than the cost to purchase a new machine. For competitive reasons, we may choose to purchase new slot machines or enter into participation lease arrangements that are more expensive than the costs associated with the continued operation of our existing slot machines. If the newer slot machines do not result in sufficient incremental revenues to offset the increased investment and participation lease costs, it could hurt our profitability.

We rely on a variety of hardware and software products to maximize revenue and efficiency in our operations. Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment in order to remain competitive in the markets in which we operate. In addition, we may not be able to successfully implement and/or maintain any acquired technology.

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Win rates for our gaming operations depend on a variety of factors, some beyond our control, and the winnings of our gaming customers could exceed our casino winnings.

The gaming industry is characterized by an element of chance. In addition to the element of chance, win rates are also affected by other factors, including players’ skill and experience, the mix of games played, the financial resources of players, the spread of table limits, the volume of bets played and the amount of time played. Our gaming profits are mainly derived from the difference between our casino winnings and the casino winnings of our gaming customers. Since there is an inherent element of chance in the gaming industry, we do not have full control over our winnings or the winnings of our gaming customers. If the winnings of our gaming customers exceed our winnings, we may record a loss from our gaming operations, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are subject to all operating risks common to the hotel business, which may adversely affect our hotel occupancy and rental rates.

A portion of our revenue is derived from our hotel and convention services. In the nine month period ended September 30, 2018 and 2017, revenue from our hotel and convention services represented 2.5% and 3.1%, respectively, of our consolidated revenue. In the year ended December 31, 2017 and 2016, revenue from our hotel and convention services represented 2.8% and 3.8%, respectively, of our consolidated revenue. The hotel business is highly competitive and may be subject to greater volatility than our gaming business. While our hotel business represents a small portion of our operations, operating risks common to the hotel business could adversely affect hotel occupancy and the rates that can be charged for hotel rooms, as well as increase our operating expenses. Such risks include, among other things:

• competition from existing hotels in our regions and new hotels entering our region, particularly those providing convention services;

• reduced business and leisure travel; and

• the quality and performance of the managers and other staff of our hotel.

These factors may affect our occupancy and rental rates, as well as our convention related revenue, and have an adverse effect on our business, financial condition and results of operations.

We have incurred net losses in the past and may not experience positive net income in the future.

We have incurred net losses in the past and may incur net losses in the future. To the extent that our revenues decline or do not grow at anticipated rates, our expenses increase or we do not operate our business profitably, our net income could be negatively impacted in the future.

If we have a fair value impairment in a business segment, our net earnings and net worth could be materially and adversely affected by a write-down of intangible assets or fixed assets.

We conduct an impairment analysis at the end of each reporting period when events or changes in circumstances indicate that the carrying amount of our assets may not be recoverable. This analysis requires our management to make significant judgments and estimates, primarily regarding expected growth rates, the terminal value calculation for cash flow and the discount rate. We determine expected growth rates based on internally developed forecasts, which consider our future financial plans. We establish the terminal cash flow value based on expected growth rates, capital spending trends and investment in working capital to support anticipated sales growth. We estimate the discount rate used based on an analysis of comparable company weighted average costs of capital, which consider market assumptions obtained from independent sources. The estimates that our management uses in this analysis could be materially impacted by factors such as specific industry conditions, changes in cash flow from operations and changes in growth trends. In addition, the assumptions our management uses are management’s best estimates based on projected results and market

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conditions as of the date of testing. Significant changes in these key assumptions could result in indicators of impairment when completing the annual impairment analysis. We remain subject to future financial statement risk in the event that goodwill or other identifiable intangible assets become impaired, including in connection with intangible assets acquired in connection with the Ontario acquisitions. For further discussion of key assumptions in our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Application of Critical Accounting Estimates and Judgements”.

We may not have or may not be able to obtain adequate insurance to cover all risks incident to our business.

We currently maintain customary insurance of the types and amounts it believes are consistent with prudent industry practice; however, we are not fully insured against all risks incident to our business. We are not obliged to maintain any such insurance if it is not available on commercially reasonable terms other than in Ontario, where our COSAs require us to maintain insurance, and in certain other instances where insurance requirements are customary. There can be no guarantee that such insurance coverage will be available in the future on commercially reasonable terms or at commercially reasonable rates or that the amounts for which we are insured, or the proceeds of such insurance, will compensate us fully for our losses. In addition, the insurance coverage obtained with respect to our business and properties will be subject to limits and exclusions or limitations on coverage. There can be no assurance that the insurance proceeds received by us in respect of a claim will be sufficient in any particular situation to fully compensate us for losses and liabilities suffered. If a significant accident or event occurs that is not fully insured, it could adversely affect our results of operations, financial position or cash flows.

We have a substantial amount of indebtedness, which may adversely affect our ability to operate our business, remain in compliance with debt covenants or make payments on our indebtedness.

We have significant debt obligations. If we are unable to meet our debt obligations, we may need to consider refinancing or amending our debt instruments, reducing or deferring any contemplated dividend payments or adopting alternative strategies to reduce or delay expenditures, such as selling assets or seeking additional equity capital. As of September 30, 2018, we had outstanding indebtedness of approximately $908.0 million (excluding the unamortized portion of the deferred transaction costs and debt premium related to the embedded derivative).

Our substantial debt has important consequences. For example, it could:

• make it more difficult for us to satisfy our obligations under such indebtedness;

• increase our vulnerability to general adverse economic and industry conditions;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, dividends and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage to our competitors with less debt than us; and

• limit, among other things, our ability to borrow additional funds, even when necessary to maintain adequate liquidity or to fund important capital projects, such as new construction, relocations, renovations or equipment upgrades.

We may also incur substantial additional debt in the future, including to fund our capital projects or to refinance existing indebtedness, which could exacerbate the risks above.

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We will require a significant amount of cash to service our debt. Our ability to generate cash depends upon many factors beyond our control, and changes in interest rates and credit spreads may cause our debt financing costs to increase. Any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

Our ability to make payments on our indebtedness and to fund working capital needs and planned capital expenditures will depend upon our ability to generate cash in the future. Our ability to do so is largely subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control, including prevailing economic, financial and industry conditions. Our business may not generate sufficient cash flow from operations to repay, and future borrowings may not be available to us in an amount sufficient to enable us to repay our indebtedness or to fund dividends or our other liquidity needs. We may need to refinance all or a portion of our indebtedness at or before maturity. We may not be able to refinance any of such indebtedness on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the debt and capital markets and our financial condition at such time. In addition, any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. Any failure to make scheduled payments of interest and principal on our outstanding indebtedness could, among other things, result in an acceleration of our debt repayment obligations. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms (or at all), could have a material adverse effect on our business, financial condition and results of operations.

Restrictive covenants in the agreements and instruments governing our indebtedness limit our discretion to operate our business.

The indenture governing the 8.25% Notes and the A&R Credit Agreement governing the 2018 Senior Secured Credit Facility contain provisions that limit our discretion to operate our business by restricting our ability to, among other things:

• incur additional indebtedness;

• create liens;

• make restricted payments;

• make certain payments and distributions (including the payment of dividends);

• engage in certain business activities;

• make investments and capital expenditures; and

• engage in mergers, amalgamations, consolidations and certain reorganizations or transfers and sales of assets.

The restrictive covenants contained in the 2018 Senior Secured Credit Facility and the Indenture may restrict our ability to expand our business or to pursue our business strategies that would be beneficial to us or to our shareholders, including our ability to generate cash flow in the future, borrow under our debt instruments or incur new indebtedness. We cannot assure you that future borrowings will be available to us under our 2018 Senior Secured Credit Facility and Indenture in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We cannot assure you that we will be able to access the capital markets in the future to borrow additional indebtedness on terms that are favorable to us. Our ability to comply with these and other provisions may be affected by changes in our business condition or results of operations, adverse regulatory developments or other events beyond our control, including changes in general economic and business conditions. A breach of any of these and other covenants or our inability to comply with required financial ratios could result in us being in default under these agreements, which could materially adversely affect our business, financial conditions, results of operations and liquidity.

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Foreign currency exchange rates may adversely affect the Canadian dollar amount of principal and interest payable under our US dollar denominated debt.

We are exposed to foreign exchange rate risks because the Term Loan B and 8.25% Notes are denominated in US dollars. If we are unable to fully mitigate our exposure to these risks, our operating results may be adversely affected. We have entered into CCIRS contracts to manage known currency exposure on its US dollar denominated long-term debt. The CCIRS also converts the interest rate risks on the Term Loans from being a floating rate to a fixed rate loan. The CCIRS contracts require the periodic exchange of payments with the exchange at maturity of notional principal amounts on which the payments are based.

Currently, the CCIRS contracts cover 75% of the New Term Loan B that comprises US$440 million and the US$255 million principal of the 8.25% Notes, respectively. The CCIRS contracts pertaining to The New Term Loan: (i) terminate on March 14, 2022; (ii) are fixed at a US dollar foreign exchange rate of 1.3166; and (iii) bear a fixed weighted average interest rate of 4.94%. The CCIRS contracts pertaining to the 8.25% Notes are fixed at a US dollar to Canadian dollar foreign exchange rate of 1.3168 and bear a fixed weighted average interest rate of 7.85%. For more information about our foreign exchange rate risk exposure, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Foreign Exchange Rate Risk”.

Risks Related to Acquisitions and Capital Projects

We may not realize the anticipated benefits from an acquisition, including the Ontario acquisitions.

Acquisitions, including the Ontario acquisitions, involve the integration of entities that were previously operated independently by other companies or by Crown corporations such as the OLG. The combined operations resulting from acquisitions may not realize anticipated benefits, synergies or cost reductions. In addition, other benefits expected from an acquisition, including the Ontario acquisitions, may not be realized on the timeframe we project or at all. Any acquisition, including the Ontario acquisitions, carries the risk that the resulting changes to our operations, including in respect of property and equipment locations, management and employee base, policies, philosophies and procedures, could have unanticipated effects or require more resources than intended. Although the Ontario acquisitions will generally be subject to risks similar to those to which we are subject in our existing businesses, the new operations may increase these risks. For example, the increase in the scale of our operations may increase our operational risks.

Our ability to realize the benefits associated with the Ontario acquisitions will significantly depend upon our ability to manage our expanded enterprise and the associated increased costs and complexity, as well as the challenges of operating in a new market in which we do not have prior operational experience. In order to support this expanded enterprise, we will need to achieve revenues from the Ontario properties consistent with our business expectations, which may prove more difficult than currently expected. While the purchase prices for the Southwest Ontario properties, North Ontario properties and Central properties were $75.3 million (excluding cash, cash equivalents, non-cash working capital and taxes), $69.1 million (excluding cash, cash equivalents, non-cash working capital and taxes), and $62.6 million (excluding cash, cash equivalents, non-cash working capital and taxes), respectively, the total cost associated with the Ontario acquisitions, including future development capital expenditures at the respective properties, is expected to be approximately $490 million to $530 million in total through 2020. However, actual capital expenditures at the Southwest Ontario, North Ontario and/or Central Ontario properties may exceed these estimates, which could have an adverse impact on our cash flows and liquidity.

The anticipated cost savings described in this prospectus are based on estimates and assumptions that we consider reasonable but that are inherently uncertain. Our expected cost savings, as well as any revenue or other benefits or synergies, are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control. As a result, there can be no assurance that our expected cost savings, as well as any potential revenue or other benefits or synergies, will be realized in the timeframe we currently anticipate or at all. Any failure to achieve our expected benefits could affect our profitability, cash flows and liquidity.

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We may experience delayed integration and unanticipated costs and liabilities relating to acquisitions.

Before making an acquisition, we conduct thorough due diligence. However, when we compete in government procurement processes, like the OLG Modernization Plan, the amount of due diligence that we are able to conduct is limited by the processes and other constraints. It is possible that we will make an acquisition that may not subsequently perform in line with management’s financial or strategic objectives. Acquisitions may also be subject to regulatory approvals that are beyond our control, which may result in delayed integration and increased costs. Changes in the competitive and economic environment, as well as other factors, may lower revenues. There may also be unexpected delays in implementing certain plans relating to the acquisition, leading to delays in achieving full integration. Delayed integration and increased costs could have a material adverse effect on us.

In connection with acquisitions made by us (including the Ontario acquisitions), there may also be liabilities, such as environmental liabilities (including liabilities related to the presence or migration of contaminants at or from acquired properties), litigation and regulatory liabilities, which we failed to discover or were unable to quantify in the due diligence conducted prior to the respective closing dates. We may not be indemnified for some or all of any undiscovered or contingent liabilities. In addition, although the vendors in our acquisitions may have agreed to indemnify us for certain losses, there is no assurance that such vendors will have sufficient funds available to satisfy the indemnities if called upon to do so. The discovery of any such liabilities could have a material adverse effect on our business, financial condition or future prospects.

We may pursue additional acquisition opportunities and our efforts to integrate recent acquisitions and complete future acquisitions may not be successful and such efforts may subject us to considerable business and financial risks.

We may continue to pursue additional acquisition opportunities. While we evaluate potential acquisitions on an ongoing basis, we may not be successful in assessing the value, strengths and weaknesses of acquisition opportunities or completing acquisitions on acceptable terms. For example, to the extent that our analysis and market studies performed by third parties are not accurate indicators of market, business and gaming trends, we may not appropriately evaluate or realize the future market growth or business opportunities that we expect from an acquisition. Furthermore, we may not be successful in identifying acquisition opportunities, and suitable acquisition opportunities may not be made available or known to us. In addition, we may compete for certain acquisition targets with companies that have greater financial resources than we do. We may finance future acquisitions through cash provided by operating activities, borrowings under our bank credit facility (to the extent allowed by the terms of the credit facility) and/or other debt or equity financing. All of these financing mechanisms could reduce our cash available for other purposes.

We may incur significant expenses while pursuing acquisitions, which could negatively affect our financial condition and results of operations. For example, the acquisition of the Ontario properties has presented financial reporting, accounting and internal controls challenges, as we integrate the operations from these properties into our centralized financial reporting and accounting systems from their legacy systems with the OLG. Such financial reporting and accounting integration (including putting in place proper processes, controls and procedures) has diverted management’s time and resources and we will need to put in place additional personnel to help effectively oversee these functions in Ontario.

We may not be able to successfully manage acquired businesses or increase our cash flow from these operations. If we are unable to successfully implement our acquisition strategy or address the risks associated with acquisitions, or if we encounter unforeseen expenses, difficulties, complications or delays frequently encountered in connection with the integration of acquired entities and the expansion of operations, our growth and ability to compete may be impaired, we may fail to achieve acquisition synergies and we may be required to focus resources on integration of operations rather than other profitable areas. In addition, the increased costs associated with any acquisitions and related capital expenditures may not be offset by corresponding increases in our revenues, which would decrease our operating margins.

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While we intend to complete the gaming properties in Kenora, North Bay, Delta and Wasaga Beach on schedule, these properties may not be completed on a timely basis, on anticipated terms or at all due to unforeseen factors.

As part of our acquisition of the North Ontario properties, we acquired the opportunity to build new gaming properties in both the Kenora and the North Bay areas. We also plan to build a new property in Delta in British Columbia. In addition, as part of our acquisition of the Central Bundle, we acquired the opportunity to build a new gaming property in Wasaga Beach. The proposed properties are subject to the necessary government approvals. There is no guarantee we will obtain such approvals. In addition, we may experience unexpected delays or unanticipated capital costs during development, which may have an adverse effect on our financial condition.

The expansion, rebranding and/or relocation of the Cascades Casino Langley, Chances Mission, Dresden Raceway Slots, Point Edward Casino, Western Fair District London Slots, Sudbury Downs Slots, Hanover Raceway Slots and Gateway Innisfil may not be completed on a timely basis, on anticipated terms or at all.

We have commenced expansion, rebranding and/or relocation efforts at the Cascades Casino Langley, Chances Mission, Dresden Raceway Slots, Point Edward Casino, Western Fair District London Slots, Sudbury Downs Slots, Hanover Raceway Slots and Gateway Innisfil, which are expected to be completed in the next three to four years. However, there is no guarantee that the scheduled work will be completed on a timely basis, on anticipated terms or at all.

While we have received initial municipal approval for the relocation of its Sudbury Downs facility, an appeal of that decision has been filed in the Local Planning Appeal Tribunal by certain individuals and community groups which, if successful, would delay the proposed relocation pending further appeals or court challenges. Subject to extension by the tribunal, a first hearing is expected in summer 2019 with a decision due (at the earliest) by September 2019. There is no certainty over whether these individuals and community groups will be partially or wholly successful in obtaining the relief sought. If the relief sought is granted, it could have a material adverse effect on the relocation of the Sudbury Downs facility and the anticipated growth therefrom.

On September 12, 2018, Wauzhushk Onigum Nation, or WON, filed a court application in the Ontario Superior Court of Justice (Divisional Court) against Gateway, the Ontario Government, and the OLG. On November 16, 2018, WON filed an amended notice of application. The application seeks, among other things, a declaration that the Ontario Government and OLG’s decisions, made in 2012, to issue a public tender for the development of a casino in the Kenora area and bundle the Kenora gaming zone with the North Ontario gaming bundle are void or of no force and effect. The application does not make any specific claims against Gateway. WON is also seeking an order quashing two related contracts made between Gateway and the OLG and requiring the Ontario Government and OLG to use good faith efforts to facilitate the upgrade of Golden Eagle Charitable Casino and Entertainment Centre (owned by WON and located on the WON reserve) to a casino with table games and slot machines.

The court application is scheduled to be heard in April 2019. Although we believe the WON application lacks merit and intend to oppose the relief sought on the application, there is no certainty over when a decision will be released, or what the outcome will be.

Construction may interfere with our operations.

Capital projects to improve our properties and our guest experience may result in construction disruptions and may affect our properties’ appearances in the short-term. Such disruptions may have an adverse impact on attendance at our properties, resulting in a negative impact on our revenues. Construction and development costs may be higher than expected and we may not have the funds required to pay any excess costs. Some of our major construction projects may entail other significant risks, such as shortages of material or labor, unanticipated cost increases or work stoppages.

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Our efforts to grow through the acquisition, location, relocation and development of new gaming operations may not be successful.

The acquisition and development of our gaming operations involves significant risks and is dependent on our ability to identify, acquire and develop suitable sites for potential development of new properties or

acquisition of existing properties in both new and existing markets. The cost of acquiring or developing a new property is substantial, and success is not assured. The expansion of our gaming operations is also contingent upon receiving and maintaining all regulatory licenses, permits, approvals, registrations and findings of suitability. The timely and successful completion of any acquisition or capital development is subject to regulatory and municipal approvals and we may not be able to determine when, or if, the necessary approvals will be granted.

We may experience difficulties with our internal systems and controls during periods of growth.

As a result of acquisitions and property developments, there may be significant demands that are placed on our managerial, operational and financial resources, including its personnel and systems. In particular, there may be demands on our operational and accounting information systems and controls and other accounting systems resulting from growth in our operations. No assurance can be given that our systems, procedures and controls will be adequate to support the expansion of our operations resulting from growth. While we take action to maintain internal systems and controls, future operating results could be affected by the ability of our officers and key employees to manage changing business conditions, expansion opportunities and acquisitions, and to upgrade, implement and/or improve operational and financial controls and reporting systems.

Our capital projects, including our growth initiatives, may not receive the required resources.

The nature of our business and our growth strategy dictates a significant amount of expenditure on physical premises, associated amenities and related technologies. In addition, capital projects are often encouraged by the Gaming Regulators and Crown corporations to ensure modernization. If our capital projects are not managed effectively, or are not allocated sufficient financial and managerial resources, we may be unable to effectively manage the cost of construction, third-party contractors and the third-party consultants engaged in our capital projects. As such, our profitability may suffer.

Risks Related to this Offering and Our Common Shares

No public market for our common shares currently exists, and a public market may not develop or be liquid enough for you to sell your shares quickly or at market price.

Prior to this offering, there has not been a public market for our common shares. If an active trading market for our common shares does not develop following this offering, you may not be able to sell your shares quickly or at the market price. An inactive market may also impair our ability to raise capital to continue to fund operations by selling common shares and may impair our ability to acquire other companies or technologies by using our common shares as consideration. The initial public offering price of our common shares will be determined by negotiations between us and representatives of the underwriters, and may not be indicative of the market prices of our common shares that will prevail in the trading market.

The market price of our common shares is likely to be highly volatile, and you may lose some or all of your investment.

The market price of our common shares is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

• market conditions in the broader stock market in general;

• actual or anticipated fluctuations in our results of operations;

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• introduction of new products or services by us or our competitors;

• issuance of new or changed securities analysts’ reports or recommendations;

• additions or departures of our executive officers and other key personnel;

• changes in the economic performance or market valuations of other companies that prospective purchasers deem comparable to us;

• litigation and governmental or regulatory investigations;

• changes in gaming laws and regulations;

• economic and political conditions or events;

• significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;

• trends, concerns, technological or competitive developments, regulatory changes and other related issues in our business or target markets;

• sales of our common shares by us or our shareholders in the future;

• trading volume of our common shares; and

• the other factors described in this “Risk Factors” section.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our common shares, regardless of our actual operating performance. The market price of our common shares may decline below the initial public offering price, and you may lose some or all of your investment.

We may be unable to continue to grow revenues or meet other financial targets, which could cause the price of our common shares to decline.

Our success depends, in part, upon our ability to continue to expand, renovate and redevelop our properties, implement our growth strategies and meet other financial targets for our business. Various factors affect sales levels, including competition, regulatory changes, changes to our customer base and customer preferences, the general economic environment and changes to the gaming industry. These factors may cause our revenues to differ materially from prior periods and from expectations. Past financial results are not an indication of future results, and there can be no assurance that our financial results will not decrease in the future. We have made, and intend to continue to make, significant capital investments to increase revenues by focusing on, among other things, the expansion, renovation and relocation of our existing properties and the implementation of marketing, development and operational strategies. However, these growth strategies carry risk: start-up issues and construction disruption experienced at our Edmonton properties, for example, have had a negative impact on our results in recent financial periods. Failure to continue to grow revenues or failure to meet other financial targets or expectations could adversely affect our sales and the price of our common shares could decline.

Volatility in our share price could subject us to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because gaming companies have experienced significant share price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

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Fluctuations in foreign currency exchange rates could harm our results of operations as well as the price of our common shares.

The presentation of currency in our consolidated financial statements is the Canadian dollar. Because we expect to recognize sales made in the United States in U.S. dollars, if the U.S. dollar weakens against the Canadian dollar, it would have a negative impact on our reported U.S. operating results. We may face similar risks in other foreign jurisdictions where sales are recognized in foreign currencies. Foreign exchange variations (including the value of the Canadian dollar relative to the U.S. dollar) have been significant in the past, and current foreign exchange rates may not be indicative of future exchange rates.

Our earnings per share are reported in Canadian dollars and, accordingly, may be translated into U.S. dollars by analysts or our investors. As a result, the value of an investment in our common shares to a U.S. shareholder will fluctuate as the U.S. dollar rises or falls against the Canadian dollar. As a result, U.S. and other shareholders seeking U.S. dollar returns, including increases in the share price, are subject to foreign exchange risk as the U.S. dollar rises and falls against the Canadian dollar.

We will be a “controlled company” within the meaning of the NYSE rules and the rules of the SEC. As a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

We have applied to list our common shares on the NYSE. Upon the closing of this offering, affiliates of Catalyst will continue to control a majority of our voting common shares. As a result, we will as a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:

• that a majority of the board of directors consists of independent directors, as defined under the rules of the NYSE;

• that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

• that we have a nominating and governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

• for an annual performance evaluation of the nominating and governance and compensation committees.

Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors, our nominating/corporate governance committee and compensation committee will not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

In addition, on June 20, 2012, the SEC adopted Rule 10C-1, or Rule 10C-1, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to implement provisions of the Dodd-Frank Act pertaining to compensation committee independence and the role and disclosure of compensation consultants and other advisers to the compensation committee. The NYSE has since adopted amendments to its existing listing standards to comply with provisions of Rule 10C-1, and on January 11, 2013, the SEC approved such amendments. The amended listing standards require, among others, that:

• compensation committees be composed of fully independent directors, as determined pursuant to new and existing independence requirements;

• compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisers; and

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• compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisers, certain independence factors, including factors that examine the relationship between the consultant or adviser’s employer and us.

As a “controlled company,” we will not be subject to these compensation committee independence requirements.

Affiliates of Catalyst will continue to own a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.

Upon the closing of this offering, affiliates of Catalyst will beneficially own approximately     % of the voting power of our outstanding common shares, or approximately     % if the underwriters exercise their option to purchase additional common shares from the selling shareholders in full. Therefore, even after this offering, affiliates of Catalyst will continue to control us and will have the ability to substantially influence us through this ownership position. Because we are incorporated in Canada, certain matters, such as amendments to our articles of incorporation or votes regarding a potential merger or a sale of all or substantially all of our assets, require approval of at least two-thirds of our shareholders; following this offering, Catalyst’s approval will be required to achieve any such threshold. For example, Catalyst may be able to control elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction. The Investor and Registration Rights Agreement (as later defined) will provide Catalyst and the investment funds management by it the right to nominate (i) two individuals for election to the board of directors so long as they own or control, in the aggregate, at least 25% of our issued and outstanding common shares, and (ii) one individual for election to the board of directors so long as they own or control, in the aggregate, at least 12.5%, but less than 25% of our issued and outstanding common shares. In addition, Catalyst has historically provided us with consulting and advisory services through our Executive Chairman Gabriel de Alba without charge. However, Catalyst’s interests may not always coincide with our corporate interests or the interests of other shareholders, and it may act in a manner with which you may not agree or that may not be in the best interests of our other shareholders. Catalyst is in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. Catalyst may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as affiliates of Catalyst continues to own a significant amount of our equity, it will continue to be able to strongly influence or effectively control our decisions. See “Certain Relationships and Related Party Transactions—Existing Shareholder Agreement—Investor and Registration Rights Agreement.”

The issuance of additional securities following this offering may cause dilution to existing shareholders.

Our board of directors may issue an unlimited number of our common shares or other securities without any vote or action by the shareholders, subject to the rules of any stock exchange on which our securities may be listed from time to time.

In addition, pursuant to the LTIP (as defined herein), we may issue securities exercisable to acquire, together with common shares issuable pursuant to any of our other security-based compensation arrangements, up to 10% of the issued and outstanding common shares, from time to time. If we issue any additional equity, the percentage ownership of our existing shareholders will be reduced and diluted. We have agreed to a lock-up agreement pursuant to which we will not issue any common shares without the prior consent of                 , as representative of the underwriters, for 180 days immediately following the closing of this offering, as described under the heading “Underwriters—Restrictions on the Sales of Common Shares”. We may be released from our lock-up agreement with the prior consent of                 , as representative of the underwriters, at any time and without notice, which would allow for the earlier issuance of common shares into the public market.

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Future sales, or the perception of future sales, by us or our existing shareholders in the public market following this offering could cause the market price for our common shares to decline.

After this offering, the sale of our common shares in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common shares. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon consummation of this offering, we will have a total of                common shares outstanding. All                  shares sold in this offering will be freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates” (as defined under Rule 144 of the Securities Act, or Rule 144), including our directors, executive officers, and other affiliates (including affiliates of Catalyst), whose shares may be sold only in compliance with the limitations described in “Shares Eligible for Future Sale.”

The remaining                  shares, representing     % of our total outstanding common shares following this offering based on the number of shares outstanding as of                 , 2018, will be “restricted securities” within the meaning of Rule 144 and subject to certain restrictions on resale following the consummation of this offering. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144, as described in “Shares Eligible for Future Sale.”

In connection with this offering, we, our directors and executive officers, and holders of substantially all of our common shares have each agreed, subject to certain exceptions, not to dispose of or hedge any of our or their common shares or securities convertible into or exchangeable for common shares during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives of the underwriters. See “Underwriters” for a description of these lock-up agreements.

Upon the expiration of the lock-up agreements described above, shares held by affiliates of Catalyst and certain of our directors, officers and employees will be eligible for resale, subject to volume, manner of sale and other limitations under Rule 144. In addition, pursuant to a registration rights agreement, Catalyst will have the right, subject to certain conditions, to require us to register the sale of their common shares under the Securities Act. By exercising their registration rights and selling a large number of shares, our existing owners could cause the prevailing market price of our common shares to decline. Following completion of this offering, the shares covered by registration rights would represent approximately     % of our outstanding common shares (or     %, if the underwriters exercise in full their option to purchase additional shares). Registration of any of these outstanding common shares would result in such common shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See “Shares Eligible for Future Sale.”

As restrictions on resale end or if these shareholders exercise their registration rights, the market price of our common shares could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common shares or other securities.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of our common shares issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding common shares. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

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Shareholders will be subject to certain ownership constraints, which limit the number of common shares that a shareholder may acquire without the prior written approval of the Gaming Authorities and Gaming Regulators.

Our common shares are subject to share constraints pursuant to the provincial statutes and regulations that govern our business and certain of our gaming operating agreements. A person who wishes to acquire 5% or more of the common shares must first obtain the written approval of the GPEB and the BCLC. A shareholder that holds 5% or more of the outstanding common shares will also be restricted from divesting of any such common shares unless they obtain the written approval of GPEB and the BCLC. A person who wishes to acquire 10% or more of the common shares must first obtain the written approval of the AGCO. A person who wishes to acquire more than 10% of the common shares must first obtain the written approval of the OLG. A shareholder that holds 10% or more of the outstanding common shares will also be restricted from divesting of any such common shares unless they obtain the written approval of the AGCO. A shareholder that holds more than 10% of the outstanding common shares will also be restricted from divesting of any such common shares where such disposition would result in a change of control unless they obtain the written approval of the OLG. Additionally, no shareholder may dispose of 5% or more of our outstanding common shares without the prior approval of the BCLC and the AGLC.

The approval processes may require a shareholder to divulge extensive personal information to the Gaming Authorities and/or Gaming Regulators. As a result, a shareholder may incur significant expenses over a lengthy period of time before obtaining the required approvals. Furthermore, such approvals are granted at the discretion of the Gaming Authorities and Gaming Regulators, as applicable, and are not, in any circumstances, guaranteed. These share constraints may, if triggered, also reduce the liquidity of a shareholder’s investment.

Share ownership constraints imposed by the Gaming Regulators and certain provisions in our articles and governing documents might delay or deter acquisition attempts.

Ownership of common shares is subject to certain restrictions, constraints and conditions imposed by the applicable gaming legislation and the terms and conditions of our operating agreements and/or licenses. Shareholders must either submit to an advance approval process or obtain registration when certain ownership thresholds are met. Our articles also contain provisions that make our acquisition by a third party more difficult without the required approvals of the Gaming Regulators.

These various restrictions and gaming regulations could discourage, materially delay or prevent a transaction involving a change in control or discourage proxy contests, even if such transactions or events would benefit our shareholders.

Upon the closing of this offering, shareholders will have limited control over our operations.

Holders of common shares will have limited control over changes in our policies and operations, which increases the uncertainty and risks of an investment in common shares. Our board of directors will determine major policies, including policies regarding financing, growth, debt capitalization and any future dividends to shareholders. Generally, our board of directors may amend or revise these and other policies without a vote of the holders of common shares. Holders of common shares will only have a right to vote in the limited circumstances described elsewhere in this prospectus. Our board of directors’ broad discretion in setting policies and the limited ability of holders of common shares to exert control over those policies increases the uncertainty and risks of an investment in common shares.

If you purchase our common shares in this offering, you will experience substantial and immediate dilution.

The assumed initial public offering price of US$         per common share, which is the midpoint of the estimated offering price range on the cover page of this prospectus, is substantially higher than the net tangible

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book value per common share immediately after this offering. If you purchase common shares in this offering, you will experience substantial and immediate dilution in the pro forma net tangible book value per common share of US$         per common share as of September 30, 2018, assuming an initial public offering price of US$         per common share, which is the midpoint of the estimated offering price range on the cover page of this prospectus. That is because the price that you pay will be substantially greater than the pro forma net tangible book value per common share that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their common shares. You will experience additional dilution when those holding options exercise their right to purchase common shares under our equity incentive plans, or when we otherwise issue additional shares of our common shares. For more information, see “Dilution.”

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our common shares or change their opinion of our common shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Because we do not anticipate paying any cash dividends on our common shares in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future to holders of our common shares. As a result, capital appreciation, if any, of our common shares would be your sole source of gain on an investment in our common shares for the foreseeable future. Our A&R Credit Facility and the indenture governing our 8.250% Second Priority Senior Notes due 2024 both limit the amounts available to us to pay cash dividends, and, to the extent that we require additional funding, financing sources may prohibit the payment of a dividend. Additionally, we are subject to Canadian legal constraints that may affect our ability to pay dividends on our common shares and make other payments. See “Dividend Policy” for additional information.

Our amended and restated articles of incorporation and by-laws and certain Canadian legislation contain provisions that may have the effect of delaying or preventing a change in control.

We intend to adopt amended and restated articles of incorporation and by-laws prior to the closing of this offering. Certain provisions of our amended and restated articles of incorporation and by-laws, together or separately, could discourage potential acquisition proposals, delay or prevent a change in control and limit the price that certain investors may be willing to pay for our common shares. For instance, our articles, to be effective upon the completion of this offering, may contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders’ meetings. The material differences between the CBCA and Delaware General Corporation Law, or DGCL, that may have the greatest such effect include, but are not limited to, the following: (i) for certain corporate transactions (such as mergers and amalgamations or amendments to our articles) the CBCA generally requires the voting threshold to be a special resolution approved by 66 2/3% of shareholders, whereas DGCL generally only requires a majority vote; and (ii) under the CBCA a holder of 5% or more of our common shares can requisition a special meeting of shareholders, whereas such right does not exist under the DGCL.

In addition, a non-Canadian must file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior to acquiring control of a “Canadian Business”

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within the meaning of the Investment Canada Act, where prescribed financial thresholds are exceeded. Finally, limitations on the ability to acquire and hold our common shares may be imposed by the Competition Act (Canada). The Competition Act (Canada) establishes a pre-merger notification regime for certain types of merger transactions that exceed certain statutory shareholding and financial thresholds. Transactions that are subject to notification cannot be closed until the required materials are filed and the applicable statutory waiting period has expired or been waived by the Commissioner. However, the Competition Act (Canada) permits the Commissioner of Competition to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of a significant interest in us, whether or not it is subject to mandatory notification. Otherwise, there are no limitations either under the laws of Canada or British Columbia, or in our articles on the rights of non-Canadians to hold or vote our common shares. Any of these provisions may discourage a potential acquirer from proposing or completing a transaction that may have otherwise presented a premium to our shareholders. We cannot predict whether investors will find our company and our common shares less attractive because we are governed by foreign laws.

Because we are a corporation incorporated under the federal laws of Canada and some of our directors and officers are residents of Canada, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the U.S. federal securities laws. Similarly, it may be difficult for Canadian investors to enforce civil liabilities against our directors and officers residing outside of Canada.

We are a corporation incorporated under the federal laws of Canada with our principal place of business in Burnaby, British Columbia, Canada. Some of our directors and officers and the auditors or other experts named herein are residents of Canada and all or a substantial portion of our assets and those of such persons are located outside the United States Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us or our directors or officers or such auditors who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the U.S. federal securities laws. Investors should not assume that Canadian courts: (1) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or blue sky laws of any state within the United States or (2) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state securities or blue sky laws.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common shares.

We will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date we are no longer an emerging growth company, as defined in the JOBS Act. We will be required to disclose significant changes made in our internal control procedures on a quarterly basis.

We are beginning the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, and we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. While we currently have an internal audit group, we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

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During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NYSE and other applicable securities rules and regulations impose various requirements on public companies. We will also become obligated to file with the Canadian securities regulators similar reports pursuant to securities laws and regulations applicable in all the provinces and territories of Canada in which we will be a reporting issuer. Compliance with these laws and regulations will increase our legal and financial compliance costs and make some activities more difficult, time-consuming or costly. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for

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us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

We are a foreign private issuer under the rules and regulations of the SEC and, thus, are exempt from a number of rules under the Exchange Act and are permitted to file less information with the SEC than a company incorporated in the U.S.

As a foreign private issuer under the Exchange Act, as amended, or the Exchange Act, we are exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies with securities registered under the Exchange Act; we are not required to file financial statements prepared in accordance with U.S. generally accepted accounting principles; and we are not required to comply with SEC Regulation FD, which imposes certain restrictions on the selective disclosure of material information. In addition, our officers, directors and principal shareholders are not subject to the reporting or short-swing profit recovery provisions of Section 16 of the Exchange Act or the rules under the Exchange Act with respect to their purchases and sales of our common shares. Accordingly, you may receive less information about us than you would receive about a company incorporated in the United States and may be afforded less protection under the U.S. federal securities laws than you would be afforded with respect to a company incorporated in the United States. If we lose our status as a foreign private issuer at some future time, we will no longer be exempt from such rules and, among other things, will be required to file periodic reports and financial statements as if we were a company incorporated in the United States. The costs incurred in fulfilling these additional regulatory requirements could be substantial.

Additionally, pursuant to the NYSE Listing Rules, as a foreign private issuer, we may elect to follow our home country practice in lieu of the corporate governance requirements of the NYSE Listing Rules, with the exception of those rules that are required to be followed pursuant to the provisions of the NYSE Listing Rules. We have elected to follow Canadian practices in lieu of the requirements of the NYSE Listing Rules to the extent permitted under NYSE American Company Guide Section 110.

U.S. Holders of our common shares may suffer adverse tax consequences if we are treated as a passive foreign investment company.

A non-U.S. corporation generally will be treated as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for such year is passive income (such as interest income) or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based on the current and anticipated composition of the income, assets and operations of the Company and its subsidiaries, we do not believe that we will be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the current taxable year or for future taxable years. However, the application of the PFIC rules is subject to uncertainty in several respects, and a separate determination must be made after the close of each taxable year as to whether we are a PFIC for that year. Changes in the composition of our income or assets may cause us to become a PFIC. Accordingly, there can be no assurance that we will not be a PFIC for any taxable year. If we are a PFIC for any taxable year during which a U.S. Holder (as defined in “Material U.S. Federal Income Tax Considerations for U.S. Holders”) holds our common shares, such U.S. Holder may be subject to adverse tax consequences. Each prospective investor is strongly urged to consult its tax advisors regarding the application of these rules to such investor’s particular circumstances. See “Material U.S. Federal Income Tax Considerations for U.S. Holders”.

If a U.S. person is treated as owning at least 10% of our shares, such holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treated as a United States shareholder with respect to each

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controlled foreign corporation in our group (if any). A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of Subpart F income, global intangible low-taxed income and investments in U.S. property by controlled foreign corporations, whether or not we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a corporation. A failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to a United States shareholder’s U.S. federal income tax return for the year for which reporting was due from starting. Furthermore, we cannot provide any assurances that we will have sufficient information to assist investors in determining whether we or any of our subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any such controlled foreign corporations. We also cannot guarantee that we will be in a position to furnish to any United States shareholder information that may be necessary to comply with the aforementioned reporting and tax payment obligations. U.S. investors should consult their own advisors regarding the potential application of these rules to an investment in our common shares.

Changes to tax laws may have an adverse impact on us and holders of our common shares.

Changes in tax laws, including amendments to tax laws, changes in the interpretation of tax laws, or changes in the administrative pronouncements or positions by the CRA may have a material adverse effect on us. In addition, tax authorities could disagree with us on tax filing positions taken by us and any reassessment of our tax filings could result in material adjustments of tax expense, income taxes payable and deferred income taxes.

Changes in tax laws, including amendments to tax laws, changes in the interpretation of tax laws or changes in the administrative pronouncements or positions by the CRA, may also have a material adverse effect on our shareholders and their investment in our common shares. Purchasers of our common shares should consult their tax advisors regarding the potential tax consequences associated with the acquisition, holding and disposition of our common shares in their particular circumstances.

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CURRENCY AND EXCHANGE RATE INFORMATION

The following table sets forth, for each period indicated, the period-end and the high and low exchange rate for U.S. dollars expressed in Canadian dollars, and the average exchange rate for the periods indicated. These rates are based on the noon buying rate certified for custom purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of any other reports or information to be provided to you. We make no representation that any Canadian dollar or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Canadian dollars, as the case may be, at any particular rate or at all. We maintain our books and records and have presented our results of operations in Canadian dollars.

On                 , 2018, the noon buying rate was US$1.00 = C$        .

	Period End		Period Average		Low		High
	(C$ per US$)
Year Ended December 31:
2013		1.0637		1.0300		0.9839		1.0697
2014		1.1601		1.1043		1.0634		1.1644
2015		1.3839		1.2791		1.1725		1.3970
2016		1.3426		1.3243		1.2544		1.4592
2017		1.2517		1.2984		1.2131		1.3745
2018:
January		1.2293		1.2429		1.2293		1.2534
February		1.2806		1.2588		1.2280		1.2806
March		1.2891		1.2933		1.2822		1.3096
April		1.2818		1.2732		1.2548		1.2918
May		1.2970		1.2866		1.2761		1.3027
June		1.3140		1.3125		1.2907		1.3319
July		1.3017		1.3133		1.3013		1.3271
August		1.3072		1.3042		1.2925		1.3155
September		1.2922		1.3034		1.2912		1.3212
October		1.3129		1.3004		1.2799		1.3133

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USE OF PROCEEDS

All of the common shares being sold in this offering are being offered by the selling shareholders, and we will not receive any of the net proceeds from the sale of common shares in this offering, including in connection with the underwriters’ option to purchase additional common shares. We expect that the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $        million. We will pay the expenses of the offering. For more information about the selling shareholders, see “Principal and Selling Shareholders.”

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DIVIDEND POLICY

We do not anticipate paying any cash dividends on our common shares in the foreseeable future. We currently intend to retain any future earnings to fund business development and growth. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, limitations on paying dividends on our current and future debt instruments, general business conditions and other factors that our board of directors may deem relevant.

There are no restrictions in our governing documents that would restrict or prevent us from paying dividends. However, our A&R Credit Agreement and the indenture governing our 8.250% Second Priority Senior Secured Notes due 2024 both contain restrictions on paying dividends. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources” and “Description of Indebtedness.”

Under the CBCA, we may not declare or pay a dividend if there are reasonable grounds for believing that (i) we are, or would after the payment be, unable to pay our liabilities as they become due, or (ii) the realizable value of our assets would thereby be less than the aggregate of our liabilities and stated capital of all classes.

See “Risk Factors—Risks Relating to this Offering and Our Common Shares—Because we do not anticipate paying any cash dividends on our common shares in the foreseeable future, capital appreciation, if any, would be your sole source of gain” and “Management’s Discussion & Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

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CAPITALIZATION

The table below sets forth our cash and cash equivalents and capitalization as of September 30, 2018.

Investors should read this table in conjunction with our audited financial statements included in this Prospectus as well as “Use of Proceeds,” “Selected Consolidated Financial Data and Other Data”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Share Capital.”

	September 30, 2018
(C$ in thousands)(1)	Actual
Cash and cash equivalents	$	210,567
Long-term debt (including current portion)(2):
Vernon mortgage	$	3,793
Term Loan B-1 (US$438,900)		574,127
8.25% Second Priority Senior Secured Notes (US$255,000)		330,098
Total debt	$	908,018
Shareholders’ equity:
Total shareholders’ equity (deficit)		(47,425	)
Total capitalization	$	860,593

(1) U.S. dollar amounts have been translated into C$ at a rate of US $        to C$1.00, the noon buying rate certified for custom purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board as of February                 , 2018. Such C$ amounts are not necessarily indicative of the amounts of C$ that could actually have been purchased upon exchange of U.S. dollars at the dates indicated and have been provided solely for the convenience of the reader.

(2) For a description of our existing indebtedness, see “Description of Indebtedness.”

The number of our common shares shown as outstanding in the table above excludes:

• common shares reserved for future issuance under our equity incentive plan as of                as described in “Executive Compensation—Equity-Based Compensation.”

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DILUTION

The common shares to be sold by the selling shareholders as provided in the “Principal and Selling Shareholders” section are common shares that are currently issued. Accordingly, there will be no immediate dilution to our existing shareholders. However, you will experience substantial and immediate dilution in the pro forma net tangible book value per common share of US$         per common share as of September 30, 2018, assuming an initial public offering price of US$         per common share, which is the midpoint of the estimated offering price range on the cover page of this prospectus. That is because the price that you pay will be substantially greater than the pro forma net tangible book value per common share that you acquire. See “Risk Factors—Risks Related to this Offering and Our Common Shares—If you purchase our common shares in this offering, you will experience substantial and immediate dilution.”

The following table summarizes, as of                 , the differences between the number of common shares purchased from us, the total consideration and the average price per share paid by existing stockholders and by investors participating in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased Number	Percent			Total Consideration Amount	Percent			Average Price Per Share
Existing Shareholders	$			%	$			%	$
New Investors	$			%	$			%	$
Total		$	100.0				100.0	%	$

The number of common shares to be outstanding after this offering is based on                 common shares outstanding as of September 30, 2018.

The number of common shares to be outstanding after this offering excludes the following:

• common shares reserved for future issuance under our equity compensation programs as described in “Executive Compensation—Equity-Based Compensation.”

We may choose to raise additional capital through the sale of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. New investors will experience dilution upon the vesting of any new restricted share units issued pursuant to our equity incentive plans or if we issue additional common shares, other equity securities or convertible debt securities in the future.

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SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER DATA

The following consolidated statements of loss and comprehensive loss data for fiscal years ended December 31, 2017 and 2016 and the summary consolidated statements of financial position data as of December 31, 2017 and 2016 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The following consolidated statements of income (loss) and comprehensive income (loss) data for the nine months ended September 30, 2018 and 2017 and the summary consolidated statements of financial position as at September 30, 2018 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus.

The financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Capitalization”, and the consolidated financial statements and notes thereto included elsewhere in this prospectus. Our historical results do not necessarily indicate results expected for any future period.

We maintain our books and records in Canadian dollars, and we prepare our financial statements under IFRS, as issued by the IASB.

Consolidated Statement of Financial Performance

(In thousands of $) Consolidated statement of operations and comprehensive income (loss):	Nine Months Ended September 30,						Year Ended December 31,
	2018			2017			2017			2016
Revenues
Gaming	$	399,620		$	270,571		$	383,069		$	248,049
Food and Beverage		52,243			47,955			65,975			55,409
Hotel		12,203			10,648			13,501			12,492
Automated teller machines		13,099			6,518			10,667			8,332
Other		7,112			3,276			5,609			3,883
Total Revenues		484,277			338,968			478,821			328,165
Costs and Expenses
Cost of Food and Beverage Service		28,604			22,736			31,828			22,718
Human Resources		200,443			142,459			204,453			142,142
Marketing and Promotion		24,636			17,642			23,092			24,485
Occupancy		64,013			23,939			35,017			17,587
Operating		50,332			27,085			44,482			24,898
Share-based compensation (recovery)(1)		8,441			17,741			19,631			(3,111	)
Depreciation of property and equipment		31,559			32,288			44,793			27,570
Amortization of intangible assets		20,951			40,112			53,506			55,661
Writedown of non-financial assets(2)		—			167			23,588			35
Other(3)		28,248			11,289			15,209			5,872
Total Costs and Expenses		457,227			335,458			495,599			317,857
Operating Income/(Loss)		27,050			3,510			(16,778	)		10,308
Other Expenses (Income)
Interest expense, net		41,664			43,368			58,887			35,449
Foreign exchange loss (gain)		25,480			(53,066	)		(49,034	)		—
Gain on sale of property and equipment		(192,373	)		(5	)		(36	)		(2,201	)
Change in fair value of embedded derivatives		(4,110	)		(3,759	)		(9,280	)		(700	)
Change in fair value of cross currency interest rate swaps		(21,891	)		37,167			31,991			—
Loss on debt extinguishment		15,124			16,135			16,135			—
Loss on debt modification		6,264			—			—			—
Income/ (Loss) before income taxes		156,892			(36,330	)		(65,441	)		(22,240	)
Current income tax expense		(1,321	)		(686	)		(1,780	)		(45	)
Deferred income tax recovery		661			574			2,147			1,829
Income (loss) and comprehensive income (loss)	$	156,232		$	(36,442	)	$	(65,074	)	$	(20,456	)

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Notes:    (1) For detail on share-based compensation, see “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 10” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 15”.

(2) Represents write-down of non-financial assets associated with the Grand Villa Casino Edmonton facility (2017—$22.6 million), write-down of non-financial assets associated with the old Lake City Penticton facility (Q3 2017 and 2017—$0.2 million) and a suspended OSA for a community gaming center (2017—$0.8 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 6” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 10 and Note 11”.

(3) Represents costs associated with restructuring (Q3 2018—$4.4 million; Q3 2017—$0.8 million; 2017—$0.8 million; 2016—$0.8 million), business acquisitions (Q3 2018—$2.3 million; Q3 2017—$3.9 million; 2017—$7.0 million; 2016—$2.2 million), transaction costs (Q3 2018—$16.3 million; Q3 2017—$1.8 million; 2017—$5.2 million; 2016—$0.3 million), site pre-opening costs (Q3 2018—$3.7 million; Q3 2017—$0.9 million; 2017—$1.6 million; 2016—$2.1 million) and other expenses (Q3 2018—$1.5 million; Q3 2017—$3.8 million; 2017—$0.6 million; 2016—$0.5 million). See “Index to Condensed Consolidated Interim Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Financial Statements—Note 12” and “Index to Consolidated Financial Statements—Notes to Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements—Note 17”.

Balance Sheet Data

The following table provides balance sheet data as of the dates indicated.

(In thousands of $)				December 31,
	September 30, 2018			2017			2016
Cash and cash equivalents	$	210,567		$	97,385		$	37,453
Property and equipment		446,021			334,038			486,690
Intangible assets		239,592			236,226			267,992
Total assets		1,005,543			1,036,370			812,531
Long-term debt		882,266			881,291			476,864
Total liabilities		1,050,915			1,096,523			617,743
Total shareholders’ (deficiency)/equity attributable to our shareholders		(47,425	)		(62,257	)		192,617

Other Data

The following table provides Adjusted EBITDA and total Adjusted Property EBITDA for the periods indicated:

(In thousands of $)	Nine Months Ended September 30,				Year Ended December 31,
	2018		2018		2017		2016
Adjusted EBITDA(1)	$	122,635	$	108,984	$	144,206	$	96,335
Corporate Costs		24,972		15,473		24,909		14,524
Total Adjusted Property EBITDA(1)	$	147,607	$	124,457	$	169,115	$	110,859

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Notes:    (1) For more information about these non-IFRS measures, see the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in this prospectus. For a reconciliation of Adjusted EBITDA to its most directly comparable measures calculated in accordance with IFRS, see the table immediately below.

Reconciliation of Income (Loss) and Comprehensive Income (Loss) to Adjusted EBITDA and Free Cash Flow

	Nine Months Ended September 30,						Year Ended December 31,
	2018			2017			2017			2016
Income (loss) and comprehensive income (loss)	$	156,232		$	(36,442	)	$	(65,074	)	$	(20,456	)
Amortization of intangible assets		20,951			40,112			53,506			55,661
Depreciation of property and equipment		31,559			32,288			44,793			27,570
Interest expense		41,805			44,031			59,566			35,477
Interest income		(141	)		(663	)		(679	)		(28	)
Income tax expense (recovery)		660			112			(367	)		(1,784	)
EBITDA(1)	$	251,066		$	79,438		$	91,745		$	96,440
Writedown of non-financial assets(2)		—			167			23,588			35
Other(3)		28,248			11,289			15,209			5,872
Share-based compensation (recovery)(4)		8,441			17,741			19,631			(3,111	)
Change in fair value of embedded derivatives(5)		(4,110	)		(3,759	)		(9,280	)		(700	)
Change in fair value of cross currency interest rate swaps(6)		(21,891	)		37,167			31,991			—
Loss on debt extinguishment(7)		15,124			16,135			16,135			—
Loss on debt modification(8)		6,264			—			—			—
Foreign exchange loss (gain)(9)		25,480			(53,066	)		(49,034	)		—
Gain on sale of property and equipment(10)		(192,373	)		(5	)		(36	)		(2,201	)
Non-cash deferred rent(11)		6,386			1,124			1,504			—
Tax adjustment for prior periods(12)		—			2,753			2,753			—
Adjusted EBITDA(1)(13)	$	122,635		$	108,984		$	144,206		$	96,335
Adjusted EBITDA Margin(1)		25.3	%		32.2	%		30.1	%		29.4	%
Free Cash Flow adjustments(1)
Less maintenance capital expenditures(14)		3,872			2,916			4,140			3,834
Less interest expense(15)		41,805			44,031			59,566			35,477
Less cash taxes paid(16)		3,250			—			—			45
Less mandatory debt repayments(17)		1,598			9,448			11,114			25,410
Free Cash Flow(1)	$	72,110		$	52,589		$	69,386		$	31,569
Free Cash Flow Conversion(1)		58.8	%		48.3	%		48.1	%		32.8	%
Revenue		484,277			338,968			478,821			328,165

Notes:   &