Article published on 25 April 2012

River Cree Casino Facing Closure in Canada

Edmonton Casino Defaults on Loan Payments
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Paragon Gaming, the operator of River Cree Casino in Edmonton, Canada, has blamed the casino's huge financial woes on the provincial government.

In an affidavit that was filed on Thursday, the president of Paragon Gaming, Scott Menke, said that River Cree Casino was on the verge of bankruptcy and was not able to make payments on its $111 million loan as the department of Intergovernmental, International and Aboriginal Relations (IIAR) had not approved a new funding agreement between the province, the Enoch Cree Band and Paragon.

Partly owned by the band, the casino does not have enough funds to continue operations and thus the River Cree Casino is facing closure.

Paragon said that the government's as of yet unexplained refusal to approve the funding agreement "came as a complete surprise."

"With little or no consultation, the government could seemingly put Western Canada's most successful casino operation in a position where they are actually defaulting on a loan," said Menke.

The president said that the casino defaulted "not because of any financial situation", but due to the fact that in the past year of working with the provincial government, it would not accept its current loan application for the next five years and has "continued to screw us around".

River Cree Casino Missed Loan Repayment Deadline

As such, Menke said that Paragon Gaming, and thus River Cree Casino, had no choice but to miss its deadline loan payment on April 16th this year, causing the casino to default.

According to Paragon Gaming, the deputy minister of IIAR, Roxanne Benoit has refused to share with the parties involved why the proposal for refinancing the casino and resort have been turned down.

Menke said that while Benoit had indicated that IIAR would review a revised FNDF grant, she would not commit to any time frame within which she would do so.

"As a result, Paragon is unable to access funds that it requires to operate the resort," he said.

The lender has now called in the entire loan, and the Canadian Imperial Bank of Commerce, another bank, froze nearly $12 million in provincial funding that was earmarked for the casino.

Paragon Gaming claims that the River Cree Casino, which has been in operation since 2006, generated over $180 million for the province and nearly 900 people were employed by the casino resort.

According to a government spokesman, the Enoch band will receive $40 million in funding this year as part of a financial agreement which the province has with the tribe.

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