Great Canadian Gaming Corporation (GCGMF) CEO Rod Baker on Q4 2019 Results - Earnings Call Transcript

Great Canadian Gaming Corporation (OTCPK:GCGMF) Q4 2019 Earnings Conference Call March 3, 2020 5:00 PM ET

Company Participants

Terrance Doyle - President, Strategic Growth and Chief Compliance Officer

Rod Baker - Chief Executive Officer

Matt Anfinson - Chief Operating Officer

John Russo - General Counsel and Chief Privacy Officer

Darren Gwozd - Executive Vice President, Finance

Conference Call Participants

Derek Dley - Canaccord

Sabahat Khan - RBC

Jay Lubinsky - Anson Funds

Operator

Good morning, ladies and gentlemen and welcome to the Great Canadian Gaming Corporation Fourth Quarter and Annual 2019 Results Conference Call. At this time note that all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] Also note that the call is being recorded today, Tuesday, March 3, 2020. And I would like to turn the conference over to Mr. Terrance Doyle. Please go ahead, sir.

Terrance Doyle

Thanks Sylvie and good morning everyone and welcome to Great Canadian Gaming Corporation’s conference call to review the company’s financial results for the fourth quarter and year ended December 31, 2019.

Joining me on the call today is Rod Baker, the company’s Chief Executive Officer; Matt Anfinson, the company’s Chief Operating Officer; John Russo, the company’s General Counsel and Chief Privacy Officer; and Darren Gwozd, the company’s Executive Vice President of Finance.

I would like to remind listeners that the latter portion of this call is reserved for institutional investors and analysts. Any media-related inquiries can be directed towards Chuck Keeling, Executive Vice President, Stakeholder Relations and Responsible Gaming. He can be reached at 604-247-4197.

Before we begin, I must caution all listeners that this conference call may contain forward-looking statements that reflect management’s expectations regarding the company’s future. These statements, which will be identified by words such as anticipate, believe, except or similar expressions are based on information currently available to the company. Investors should not place undue reliance upon these statements, which involve significant risks, uncertainties and assumptions. These statements are made as of the date of this call and the company assumes no obligations to update or revise them to reflect new events or circumstances.

Unless otherwise indicated, all information on this call is presented in Canadian dollars and is in accordance with International Financial Reporting Standards, or IFRS, except for adjusted EBITDA, which is a non-IFRS term defined in the company’s MD&A. Unless otherwise noted, all financial information for the current and comparative periods exclude the financial results of the U.S. regions as they have been presented as discontinued operations after Great American Gaming Corporation was sold on June 27, 2019.

I will now pass the call to Rod who will begin with some opening remarks, Matt will then review Great Canadian’s financial results and overall operations and Rod will follow with some commentary on the company’s strategic outlook. Rod?

Rod Baker

Thank you, Terrance. Good afternoon, everyone and thank you for joining us today. I want to introduce to you our new Chief Operating Officer, Matt Anfinson, who joined us in December 2019. Matt brings the skills and experience required to optimize on operational opportunities at current facilities as well as develop strategies to successfully launch our new properties under development. Welcome, Matt.

I would like to spend a bit of time to recap the key highlights at Great Canadian in 2019 then I will pass the call to Matt who will provide an overview of the company’s fourth quarter and annual 2019 financial results and commentary on the company’s overall operations. I will then discuss the company’s strategic outlook.

2019 was a productive year with construction activities ramping up on several significant developments that will continue through 2020 and 2021. In June 2019, we successfully completed the sale of our U.S. operations which allows the company to focus on its short and medium term development plans within its core growth markets, particularly in Ontario. In November 2019, we were able to increase our ownership interest in both the West GTA partnership and the GTA partnership. We are also pleased with our recent effort to enhance the company’s capital structure as we move into a busy 2020, including the increase in capacity of the company’s revolving facility, closing the seniors unsecured debenture offering as well as the substantial issuer bid offer to shareholders, which I will discuss in more detail later in the all.

I am now going to pass the call to Matt to comment on the financial highlights for the fourth quarter and full year 2019. Matt?

Matt Anfinson

Thank you, Rod. Great Canadian’s revenues have increased by 8% or $26 million from $331.4 million to $357.4 million during the fourth quarter of 2019, an increase by 50% or $175.8 million to $1.356 billion during the full year of 2019 when compared to the same period in 2018. The increase in revenues was attributable to the expansion of gaming and non-gamin amenities in the Ontario properties. Revenues for the full year of 2019 included an additional 22 and 120 days of operations from the GTA Gaming Bundle and the West GTA Gaming Bundle respectively when compared to 2018.

Adjusted EBITDA was $152 million for the fourth quarter of 2019, which included a $21.1 million positive impact from IFRS 16, the new lease accounting standard adopted on January 1, 2019. Adjusted EBITDA for the full year of 2019 was $557.3 million, which included an $83.7 million positive impact from IFRS 16. Adjusted EBITDA for the full quarter and full year of 2018 were $117.8 million and $466 million respectively. The increase in adjusted EBITDA was also attributable to the above-mentioned increased revenues in the Ontario region partially offset by increased operating costs related to expanded gaming in Ontario. Readers are cautioned that the financial results for the comparative period in 2018 have not been adjusted for IFRS 16.

Shareholders’ net earnings from continuing operations was $45.8 million or $0.81 per common share for the fourth quarter of 2019, an increase of $19.5 million or $0.37 per common share from the fourth quarter of 2018. The increase for the quarter was primarily due to increased adjusted EBITDA on Ontario and lower interest and financing costs on the company’s senior secured credit facilities after the redemption of the 6.625%, $450 million senior unsecured notes and the associated early redemption premium of $9.9 million and write-off of unamortized transaction costs incurred in the fourth quarter of 2018 partially offset by increased amortization related to capital investments for the Ontario developments, increased income taxes and the net effect of adopting IFRS 16.

For the full year of 2019, shareholders’ net earnings from continuing operations was $174.4 million or $3 per common share increased by $28.3 million or $0.60 per common share when compared to the prior year. The increase in the year was primarily due to increased adjusted EBITDA in Ontario, the gain on sale of a parcel of vacant land in BC partially offset by increased amortization related to capital investments for the Ontario developments, increased income taxes and the net effect of adopting IFRS 16.

During 2019, we made significant development progress incurring capital costs of over $400 million to complete several exciting upgrades and enhancements. These capital expenditures relate most notably to the ongoing development of our Ontario gaming bundles, including the new building addition at Great Blue Heron, gaming expansions at Elements Casino Mohawk and Elements Casino Flamboro, the building expansion at Elements Casino Grand River as well as introductions of new food and beverage offerings to complement gaming and improve guest experiences at several Ontario gaming facilities.

The Greenfield development of Pickering Casino Resort which will feature a full scope of gaming and entertainment amenities is well underway. The casino building portion at the Pickering Casino Resort with various dining amenities is near completion and is expected to open by the end of first quarter 2020. We have also been making great headway on the expansion of Casino Woodbine. Structural and foundation work continues to progress. For the remainder of 2020, we continued to enhance our properties in Ontario, which include completing several renovations at the West GTA gaming facilities in spring 2020. Further developments to the Great Blue Heron Casino with the hotel at Great Blue Heron expected to complete in the second quarter of 2020 in the hotel and entertainment venue at the Pickering Casino Resort to open by the end of 2020.

I will now pass the call back to Rod for an update on Great Canadian strategic outlook. Rod?

Rod Baker

Thank you, Matt and well done considering you have only been here for about 80 days. As of December 31, 2019, the company remains in a stable financial position with cash of $330 million, available capacity of $347 million on the senior secured credit facilities, $703 million on the GTA partnerships revolving in capital expenditures credit facilities, $87.4 million on the revolving credit facility of the West GTA partnership, and $18.1 million on the revolving credit facility of OGELP, each subject to compliance with applicable financial covenants.

Subsequent to December 31, 2019 capacity of the revolving facility under the company’s senior secured credit facilities increased by $150 million subject to covenants. Great Canadian continues to enhance its capital structure as demonstrated by the extension of the company’s senior secured credit facilities for another year. The increase in the revolving facility subsequent to year end and amendments made to the revolving credit facility at West GTA partnership during the fourth quarter of 2019. The amendments of our credit facilities provide improved financial flexibility that will enhance the company’s ability to achieve its strategic adjectives. Furthermore, the senior unsecured debentures closed in 2020 will provide the company with a diversified financing structure by rebalancing interest rate exposure and varying loan maturity profile.

We continue to increase shareholder interest as demonstrated by the recent completion of the current normal course issuer bid, where the maximum available 3.9 million common shares were repurchased. Furthermore, on February 14, 2020, we filed a substantial issuer bid offer to repurchase additional common shares. The bid materials were mailed to all registered shareholders on or about Februarys 14, 2020 and a copy of the bid materials can also be found on SEDAR.

Regarding our bid, currently before shareholders for their review, we encourage that all shareholders read and familiarize themselves with the bid offer and in particular, Sections 7 and 8 with respect to certain conditions and variation of the offer. As you are aware, there are current evolving global dynamics that are fluid and that are not within the company’s control. These dynamics potentially may negatively impact our business going forward. If that were the case, it would not only negatively impacts value but more importantly it may necessitate greater financial flexibility and liquidity than would otherwise be the case. Our Board of Directors shall continue to assess the situation and exercise their fiduciary obligations to act in the best interest of the company and all shareholders during this period of global uncertainty. Terrance, we can now invite questions. Thank you.

Terrance Doyle

Thanks, Rod. Before we begin today’s question-and-answer session, I would like to remind everyone that questions will be reserved for institutional investors and analysts. I would also like to reiterate the company’s Investor Relations philosophy which encourages investors and analysts to utilize the public conference call for their principle meeting for speaking to Great Canadian senior management. We will now go to Q&A. Thank you.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And first you will hear from Derek Dley at Canaccord. Please go ahead.

Derek Dley

Yes, hi, guys. Rod, I appreciate your comments there at the end. So, I am going to start with that. Can you just talk about if any impact that you are seeing so far on your operations from COVID-19, whether that be in your Vancouver properties or in Ontario?

Rod Baker

Sure. No problem. So, today, we have seen no impact that we could identify at any of our properties. So, that’s very good news. And obviously, if you look at our results, it was by and large, I think a fairly decent quarter as well from a math perspective. Prospectively, going forward, we are certainly not health experts, but we are watching very, very closely the dynamics that are playing out around the globe on a literally daily basis. Things are changing quite quickly. I would also take this moment in time as a large organization we have had a crisis management plan. This has been prepared for many years and thankfully we've never had to access many, many components of that have formed the nucleus of a COVID 19 strategy. If we are in fact faced with varying degrees of insulin’s on our operations so we are as prepared as we can be for whatever might come our way realizing the critical importance. Number one is the health and safety of our team members and our guests to be followed along with making sure that our company survives whatever strong add us to the best of our abilities both from an operational as well as the financial prospective to the benefit of our shareholders. So, it is very much a go forward very significant concern we have no ability at this point in time I think to narrow down what we think the future looks like but we are as prepared as we can I think this management team this organization to deal with it to the best of our abilities.

Derek Dley

Okay. And then just in terms of the SIB that you have in place again just following up on I think your comments there at the end if you have not seen anything to date that as sort of impacted your properties or any of your fundamentals of the business what kind of leads you to make those comments which seemingly hear on the set of caution given the bid it does expire I believe in about two weeks in the few days?

Terrance Doyle

Yes. So like I think if we were silent without the caution how quickly things are evolving out in the world frankly that would almost be reckless I think looking back and even sitting here today our business is very sound and it is very it is operating in truly the normal course that could change very quickly and we are not skilled or schooled in healthcare dynamics there are obviously extremely low risks in the market we offer it right now that being said some other markets have migrated from a containment strategy of identifying isolates up through to what they call mitigation efforts which are encouraging or even mandating social distancing and our business has been through many shocks those that have been financial in nature are interested because they very much hurt many, many business our business in terms of social distancing would be acutely impacted and so I think it’s incumbent upon all of us to realize that it is a very fluid situation and although things are solidly good right now if we did not discuss it people might be misconstruing what might happen even over the short term here so we don’t have the overly alarmed but I think it would be naive to not understand that things could change quite materially over a very short period of time and in fact if you look at things when we launched the SIB not very long ago February 14 frankly the world was in a very, very different place than it is right now in this prospect so it is been already I think a very significant migration through many parts of the world and we are very hopeful that Canada and obviously the world there is lot of mitigation and things don’t get worse before they get better that being said right now many places around the world things are getting much worst before they get better so, I think it is just a heads up for everybody so people are not naïve and I would tell you I won’t represent the board and their duties around how they should best manage our company through this period I would just reflect management’s view as I did enunciate there a moment ago clearly not only a thoughtful operational plan is very important through a period of uncertainty but maximum financial stability and flexibly are paramount importance to be able to weather or whatever storm comes our way and again that’s a financial orientation as I mentioned first and foremost the health and safety of our team members and guests is order business number one here, but following along from that to be rock solid through any type of prices of sorts. I think it’s doing our job on behalf of shareholders. So I think an SIB of $500 million, that’s a big amount of outflow. And sitting here today, there has been no change, but we are still a ways away from March 20 when that’s going to expire. So I just want people to be aware of that and make sure they have read through this circular front to cover. So they understand exactly what all of the clauses mean in there.

Derek Dley

Okay, that’s extremely helpful. Appreciate the color there. Just as it relate to the financial flexibility, when we look ahead to this year 2020, what should expect in terms of the magnitude of CapEx, should we expect something similar to the CapEx that you spent in 2019?

Rod Baker

Yes. So I think you haven’t had an opportunity to drill down. So the number that we have published for 2020 is $550 million and we were just over $400 million for 2019. So I think we have got West GTA sort of finishing up in Q1 here and Pickering which has been going well has been sort of notionally split between ‘19 and ‘20 in terms of the actual dollars and then we are obviously as Matt mentioned we continue to proceed in Ernst with our Woodbine development. So the combination of those three significant items in particular augmented by some smaller initiatives throughout the rest of the portfolio get us to a pretty healthy number that obviously we would like to continue if at all possible through a period of uncertainty. So that’s a pretty big number that we need to factor in as well if we are not generating the same type of cash flow in a status quo type of situation like we were thinking even not too long ago. So I think that puts another big number out there for you to factor in as you go through some of your modeling here.

Derek Dley

Yes, okay. That’s helpful. And then just the last one for me, just looking at Ontario drilling down a little bit into the numbers, table hold was up quite a bit, anything different going on there, is more related to mix or is it just a factor of, yes, you guys had a lucky quarter? And then number two, slot coin-in was down slightly in Ontario year-over-year and is that a function of just some players shifting towards the expanded table offering?

Rod Baker

Well, I don’t know if I should be scary since Matt has only been here for like 80 something days. Did you want to do this or do you want me to do this, Matt?

Matt Anfinson

No, I think if we address some of the questions, we look at the table hold specifically in Ontario, it’s not necessary that we are changing the mix of the operations, those have been setup, we are bringing more of the product online. We are programming more of the product right now, but in reality, we just constantly look at the utilization of the table games, what our guests want, we are in markets that our guests they let us know what they want. And so we are not necessarily moving to a higher hold mix. When you look at the hold of last year versus this year, it’s a 100 to 200 basis points, not hugely on, it’s not huge – it doesn’t point out to me, hugely that there was a mix change, but more along the lines of not only luck, but just bringing more product online as far as the market goes, maybe increasing some of the normalization. I think that when you look at 20%, 19%, that’s more of where we want to be going forward and what we will focus on as far as company.

Rod Baker

And I think on the slot side, I mean, we have had frankly not a lot of slot growth through 2019 in Ontario, like net-net. I am very excited Matt and his thinkings are coming to the table. I think we have more opportunities to continue to do things and optimize our operations in that respect. Obviously, we have got – Woodbine has been a key driver of that and it doing – it’s like the – it’s the tide that rises the boats a little bit and then or makes them go down. So we have got a very significant focus in that respect that we hope will be augmented by the really fantastic Pickering opening as well through 2020. So still as we have been for several quarters, been very much a work-in-progress, particularly at Woodbine with not a lot of change, but we are trying to do some things within the four walls right now that we think will serve us incrementally better through 2020.

Derek Dley

Great. Thank you very much.

Rod Baker

Okay. Thanks, Derek.

Operator

Thank you. [Operator Instructions] And your next question will be from Sabahat Khan at RBC. Please go ahead.

Sabahat Khan

Thanks. Just a one on the SIB, I guess historically your balance sheet has been relatively under-levered compared to some of your peers, I guess what kind of leads you to change your mind with regards to kind of capital strategy do going to use some of your balance sheet to buyback stock was it where you are in the redevelopment process or was it something else. I just wanted to understand the thought process behind that?

Rod Baker

I think it’s very good question. And I think I would necessarily saying changing our mind I think things have continued to evolve as we seasoned our experience and exposure to both the GTA and the West GTA but as We have been when we thought our stock represented seasonally good value we have been very active with our NCIB if you were also a really close student to it when our stock was may be the delta in our minds at least was not as big we weren’t as aggressive with it so even if you look at this past year we were fairly aggressive down around $41.5 when the stock was frankly higher than that we were not active so I wanted to not pick into commentary because we have been doing that obviously this is a much bigger swing all at once in terms of half a billion dollars so I think it is a very fair comment to make and we bought very big businesses and along with those purchases made and are very focused and excited about various significant capital programs and obviously when you buy things and you enter new markets and you start to develop things they come with learning’s and frankly they come with risks because of lack of knowledge and understanding and we got to a point between where we are positioned from a development program as well as from an operating model to be comfortable I would call it a status quo world I mean quo good world I think we need to talk about things differently extremely hypothetically but differently but put that aside for a moment but in terms of the thinking of the board as supported by management when that was launched we felt obviously that long term value is not represented in our stock price and an ability to offer a significant premium depending on the desired level of shareholders to repatriate some of their capital we wanted to afford them that opportunity to decide what makes sense in their perspective but we actually felt that despite the significant capital development programs still ahead of us the way we have set up our businesses and with the stability that we felt was inherent in the despite threshold pipe changes going forward and the financing structures that we had in place both at the partnership levels in Ontario and then at the Great Canadian level upstairs that this was something that although it was levering up it was not as far away from our core principals as the big number actually looked when you played it all through so that’s how the board got there upon working with management through this initiative.

Sabahat Khan

Okay. And then just more a logistical question on the SIB I guess the offer is out I guess with the market volatility that is been taking place over the last few weeks, is there – are you able to modify that SIB at all or once it is out there you have to wait until the investors get back to you and then you can make a decision if you want to change the price range or the volume?

Rod Baker

Yes. So basically I don’t want to paraphrase it and legalistically that’s why I encourage everybody to read the circular especially Section 7 and 8 in terms of varying terms financial or non financial or even terminating there is a lot of legal language there and I think it is important to read that to familiarize yourself with the amount of latitude and flexibility that the company and the board retain through the offering circular.

Sabahat Khan

Okay. And then…

Rod Baker

So yes basically we have there is ability to do everything that you asked but I don’t want to go and paraphrase it because I think it should be read technically for what exists in the document there. I think it’s just safer for me and it will be more straightforward and appropriate for you if you actually go and read the language.

Sabahat Khan

Okay, thanks. And then you brought in a new COO obviously last year. I guess can you maybe give us some insight into that thought process? Was it with a bigger operation, you wanted to bring in somebody who that has experience in managing large properties or were you looking for somebody to come in and change certain programs or marketing, things like that? Just want to understand the thought process around that? And then any examples you can give me of or give us what some of the changes to-date have been? That would be helpful.

Rod Baker

Sorry, if you are talking about Matt, I am starring at him right now here. So, I don’t like to flatter people like that’s actually not my style here. So, I need to be very careful what I say. Look, we have more than tripled the size of our company in the last 3 years. And I think the assets that we are also creating are much more global and even more amenities and more complex and more interesting than the portfolio that we frankly have created organically over the last 38 years. And I am the kind of guy as is the rest of our team. If we can have more, better smarter that come with other experience that can help us be better at what we do collectively as a team. That’s the way you make a lot of success. And we have brought lots of good people in including John Russo who is on the phone here over the last few years. Obviously all of whom or most of whom, Darren was in the room as well a few years ago that you have never heard of that are toiling away, providing fantastic leadership throughout the organization. So, this is just another example of a model that we have done the frankly has enabled us to do, I think a lot of amazing things over a very short amount of time with a passing grade, like fairly well. Matt, I think is a tremendous new asset for us at the most senior leadership level here. And look, the last thing any company want to do is drink its own Kool-Aid. So when we bring new team members in, we very much value and support them for their individualism as well as the experience they bring to the table, but all has so far – always proven to be highly complementary to what we have in terms of our skills inside. Now, if want to jolt down, specifically to Matt, I could go on for a long period of time, you have had a very successful career going through many areas of the teasers and pre-ceasars organizations. And I think has a fantastic track record of what he has done. And when you look at places like Pickering and that – and it was in my prepared remarks and we put at in there, in particular, because it’s true, Pickering and Woodbine obviously in addition to the rest of our assets, I think what Matt brings us to the table is hugely valuable and it’s going to provide us that much better of an opportunity to do our very best job at bringing those assets online in the most appropriate fashion and making the most of them. And I don’t want to put too much on the shoulders, because it’s just one guy, no one person does anything me or Terrence included. So, it’s to lead a team the right way to do some really, really amazing things with all of your capital that we have put to work here. So – and it’s early days, but he has been awesome, he has gone here and read all the stuff and he has been to 20 sites in the first 28 days. And I think it’s really been engaging well with our team members and I have very, very high hopes that not only the three of us, Terrance and Matt and myself, but the rest of us senior leadership are going to continue to execute well on everyone’s behalf, but again he is sitting here, so I don’t want to say nice things about him.

Sabahat Khan

Thanks. And then just last one from me on more kind of the Ontario market or more of the GTA market and the Woodbine facility, you added tables there a while back. Can you give us what your learnings have been since you added that gaming capacity with regards to tables as the take-up been in line with what you expected, does it give you more or less confidence in the amount of gaming capacity you are adding across kind of all your facilities around the GTA? And then lastly, do you think your cost structure in this GTA bundle at least for now is that a good place with regards to SG&A, like have you been able to get to a good level based on what you have seen around usage over the last year and a half? So I just want to get an idea of the progress you have made over the last year and a half and what you have learned from the trends?

Rod Baker

So I would like to do part of this firstly. And then I think Matt’s non-polluted external lens from the rest of the world, I think will be also a refreshing perspective. So we time to market on gaming capacity time is money to a large extent, so we were very focused on bringing assets online obviously improving the sot business as best we could but in particular tables being launched at Woodbine for the first real gaming tables within the proper GTA within several months after closing the bundle I think that was a very significant and positive financial opportunity that shareholders and company benefited by and we have done that I think there has been very good learning’s incrementally since that point of time and if you continue to look as we like already circled the introduction of those tables that continued growth in the tables business of a it is a very good asset but it is as we have talked about very beginning it is very limited in its amenities and its presentation of a true gaming casino experience if you look at the math side of it you can see that the team has continued to optimize and to reach into the marketplace and to not in massive exponential, but certainly incremental growth rate type numbers there. So we are encouraged by that we think the team has done a good job I do think Matt when he comes in not only at Woodbine but obviously Pickering as well can take his global learning’s and experience and continue to work With the team and to improve those growth rates going forward in what is still I think when you look at the market broad based a significantly underserved market particularly if you could offer up a true and appropriate gaming experience further so that maybe that’s enough low value set for

Matt over to you I think some of your early days impressions would be helpful.

Matt Anfinson

No I think if I look at my first couple of months here I was taken back by the amount of scale that this team you and Terrance brought online and it is hard enough in the gaming industry to essentially open one casino with tables when you take that times five six seven eight it is unbelievably to take a look back and see what has actually been accomplished and so we have been talking about the last couple of months of acquisition favors as operating phase and anytime you open up a casino these days you just simple cannot open the doors and people show up and you make a bunch of money you can see that in the investments the United States for now it is one or two years so I guess what we are learning here and what we continue to learn going forward is that it is not a business that today as how it is going to be tomorrow what not your continuing learning and from what I have seen in early days it is still growing it is growing it feels good but also from the cost side we are now pivoting from this get it open get it right to now really sizing it to what we think the market can be which factoring in the market is still growing by the way so these are the type of things that we are looking at but at the end of the day you do want to make sure that as you bring this new product online as you add these new assets online your efficiencies improve and so that is what is going to happen going forward and I think we continue to learn on the revenue side I think that the two products everybody listen and the two products that we are opening in this market are in my mind very different from what we have had so far and so it is going to be another learning opportunity for us as we bring this asset online to really figuring out and really refining what this market is and so I think this team nailed what these two products need to be I think that we are doing very well getting it opening on time and within budget you think that what you will see is more growth and us really focusing on the cost structure other side of business making sure that it is closing incrementally to the bottom line.

Sabahat Khan

Okay, thanks.

Operator

Did you have any further questions Mr. Khan?

Sabahat Khan

No, I am good. Thank you.

Rod Baker

Okay. Thanks Sabahat.

Operator

Thank you. [Operator Instructions] And your next question will be from Jay Lubinsky at Anson Funds. Please go ahead.

Jay Lubinsky

Hi good afternoon. I just had a quick housekeeping question on the financials so if I look quarter over quarter Ontario I see gaming revenues increased by $18.6 million but if I look at NGGR it was down slightly. So can you just kind of bridge, is there something else in gaming revenues that maybe can bridge that gap in PCs or something?

Rod Baker

So we have talked about a few of the quarters, they don’t necessarily align up. This quarter, there was also an alignment in terms of the ratios of the two, particularly related to the West GTA – we have talked about the West GTA with some delays that we have had. And so there was a misalignment there that was reconciled in this quarter, which assisted the results. I would tell you that we don’t foresee that type of fortuitous ratio adjustments going forward. So that’s sort of like a one-time thing that exists there that is going to, I would say, mess with those ratios that you just talked about a little bit.

Jay Lubinsky

And so the quantum or the magnitude of that, just back of the envelope match would suggest around, just north of $20 million, is that kind of in the ballpark?

Rod Baker

Yes. So it’s actually not – it’s not that high, it’s actually lower than that, but as I said, there is other noise in there. The way we actually track the gaming revenues, it doesn’t have like poker revenues it doesn’t have a bunch of other things in. So they don’t actually line up dollar for dollar. So I apologize for that. So I think you should only look at them directionally, but you can’t actually go and have them tied back in dollar for dollar. You are not going to – you are going to get closer, but you are not going to get like close.

Jay Lubinsky

Got it, okay. Okay, thanks very much.

Rod Baker

Okay. You are welcome.

Operator

Thank you. And at this time, Mr. Doyle, we have no further questions. Please proceed.

Terrance Doyle

Thank you, Sylvie and thank you everyone for participating this afternoon. Before we conclude, I would like to remind listeners that forward-looking statements were made during this call. For those who joined midway, I encourage you to listen to the replay of this call to hear my earlier comments regarding these forward-looking statements. This replay will be available through the Investor Relations sections of our website at www.gcgaming.com. This now concludes our call. Thanks everyone.

Operator

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again thank you for attending. And at this time, we do ask that you please disconnect your lines. Have a lovely evening.