F-1/A

As filed with the Securities and Exchange Commission on December 18, 2018

Registration No. 333-228472

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

To

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	7011	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 Tennenbaum Capital Partners, 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 59.

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	Credit Suisse	Goldman Sachs & Co. LLC
CIBC Capital Markets	Macquarie Capital	SunTrust Robinson Humphrey

                    , 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	38
SELECTED SUMMARY HISTORICAL FINANCIAL INFORMATION	40
RISK FACTORS	59
CURRENCY AND EXCHANGE RATE INFORMATION	91
USE OF PROCEEDS	92
DIVIDEND POLICY	93
CAPITALIZATION	94
DILUTION	95
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER DATA	96
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	101
BUSINESS	152

MANAGEMENT	192
EXECUTIVE COMPENSATION	205
PRINCIPAL AND SELLING SHAREHOLDERS	215
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	217
DESCRIPTION OF INDEBTEDNESS	220
DESCRIPTION OF SHARE CAPITAL	223
SHARES ELIGIBLE FOR FUTURE SALE	240
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS	243
MATERIAL CANADIAN INCOME TAX CONSIDERATIONS FOR NON-CANADIAN HOLDERS	249
UNDERWRITERS	251
LEGAL MATTERS	256
EXPERTS	257
CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT	257
ENFORCEMENT OF CIVIL LIABILITIES	259
EXPENSES OF THE OFFERING	260
WHERE YOU CAN FIND ADDITIONAL INFORMATION	261
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, Liquor and Cannabis 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). We also commissioned a report from The Innovation Group in relation to the Central Bundle landscape and other matters pertaining to that gaming market. 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.

ii

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 audited 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” and “Free Cash Flow Conversion”, 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.

iv

• “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.

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, 2016 and 2015 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 years ended December 31, 2016 and 2015.In addition, as a result of the acquisition of the Central Bundle (as defined herein) from the OLG in July 2018, the nine months ended September 30, 2018 may not be comparable to the nine months ended September 30, 2017.

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, or the Lower Mainland, 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, the anticipated acquisition of a gaming facility in British Columbia 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:

Note:    (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 anticipated acquisition of a gaming facility in British Columbia, expected to close in January 2019, and 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 Abbotsford, British Columbia		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) Campbell River, British Columbia		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) Courtenay, British Columbia		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) Victoria, British Columbia		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		—		—		Dec. 31, 2018		Leased
Total							785		—
Ontario
Western Fair District London Slots London, Ontario		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) Point Edward, Ontario		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 Woodstock, Ontario		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 Dresden, Ontario		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 Clinton, Ontario		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 Hanover, Ontario		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 Thunder Bay, Ontario		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 Sault Ste. Marie, Ontario		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 Chelmsford, Ontario		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 Innisfil, Ontario	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 Orillia, Ontario	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 Edmonton, Alberta	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) Edmonton, Alberta	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 expect that our operational services for bingo at this location will cease on December 31, 2018 upon the formal termination of our Bingo Operational Services Agreement, or BOSA.

(12) We completed renovations at our Point Edward Casino in the fourth quarter of 2018. As at November 30, 2018, this property has 491 slot machines, 25 table games, including three poker tables, and three F&B outlets.

(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 approximately 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 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 approximately 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 approximately 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 approximately 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 approximately

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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 approximately $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, approximately 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 approximately 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 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 expect that our operational services for bingo at the Playtime Gaming Victoria location will cease on December 31, 2018 upon the formal termination of our BOSA.

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 approximately 78,100 square foot Western Fair District London Slots property is equipped with a new gaming management system, or GMS, 767 slot machines and approximately 54,300 square feet of gaming space.

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The large, open casino floor includes 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 a site we 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. As of September 30, 2018, the approximately 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.

We invested approximately $25.9 million in the Point Edward market and major renovations of this property, which were recently completed. This site was rebranded as Starlight Casino Point Edward and a MATCH was opened in July 2018. Completed in November 2018, this full service entertainment property now hosts an expanded 24,000 square feet of gaming space (excluding back of house) with approximately 491 slot machines and 25 table games, including 3 poker tables. There are now three F&B outlets at the Point Edward Casino: MATCH, The Buffet and Nova Bar. A new GMS has been 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 approximately 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 approximately 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 new restaurants, and a hotel and convention center. We expect to invest approximately $36.1 million in the new

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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 approximately 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 approximately 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 approximately 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 approximately 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 approximately 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, 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 approximately 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 approximately 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 approximately 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. Subject to BCLC final approval, 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 Anticipated Acquisitions

In the next six months, we expect to announce a share purchase agreement for the acquisition of entities holding title to, and providing operational and F&B services at, a gaming facility in British Columbia. The consideration payable under the share purchase agreement is expected to be $21.5 million, subject to standard adjustments. Subject to final approval from the BCLC and GPEB, the acquisition is expected to close in January 2019.

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 British Columbia Gaming Policy and Enforcement Branch, or 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 fiscal year ended March 31, 2018, 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.

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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 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

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Sources: OLG, BCLC, AGLC, UNLV, Nevada Gaming Control Board, Pennsylvania Gaming Control Board, Louisiana Gaming Control Board, Illinois Gaming Board, New Jersey Division of Gaming Enforcement.

Notes:    (1) 2018 U.S. gaming win is presented for the last twelve months as of March 31, 2018 and assumes an exchange rate of $1.28 per US$1, representing the average exchange rate from April 1, 2017 to March 31, 2018.

(2) Peak to trough decline is calculated as the percentage change between fiscal year 2010 and fiscal year 2008 for the Canadian markets and the percent 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 2018. Illinois data includes VGTs.

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

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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%.

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. For fiscal years 2016 to 2018 revenue is presented net of service provider fees.

(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.

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.

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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.

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 $2.0 billion in aggregate casino and CGC Win for the year ended March 31, 2018. For this period, the BCLC generated revenue from the following activities:

Total Gaming Win by Channel	Casino Gaming Win by Channel

Source: BCLC.

Casino Win in British Columbia grew at a CAGR of 2.1% for the 10-year period ended March 31, 2018 and the BCLC is forecasting a CAGR of 0.4% from the year ended March 31, 2018 to March 31, 2021. The following chart presents annual gaming revenue in British Columbia:

Historical and Forecast Casino Gaming Win in British Columbia⁽¹⁾

(in $ billions)

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

Note:    (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 operational service agreements, or 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 $3.43 billion in annual casino Win and $7.6 billion in total revenue (gaming and non-gaming) for the year ended March 31, 2018. The following chart illustrates the division of OLG total revenues by gaming activity:

OLG Win by Channel

(year ended March 31, 2018)

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 after 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 after prizes in Ontario for the 10-year period ended March 31, 2018 as well as forecast to March 31, 2022.

Historical and Forecast Casino 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. For fiscal years 2016 to 2018 revenue is presented net of service provider fees.

(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.

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 113% higher in Alberta than in Ontario, 65% higher in British Columbia and 120% higher in the five largest U.S. locals driven markets:

Adult Population⁽¹⁾⁽²⁾

(in millions)

Sources: United States Census Bureau, Statistics Canada.

Notes:    (1) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

               (2) Five largest U.S. locals driven markets include Nevada (excluding contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey.

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Adult Persons per Gaming Position^(1)(2)(3)

Sources: United States Census Bureau, Statistics Canada, OLG, BCLC, AGLC, Nevada Gaming Control Board, Pennsylvania Gaming Control Board, Louisiana State Police, Illinois Gaming Board, New Jersey Division of Gaming Enforcement, The Innovation Group.

Notes:    (1) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

(2) Five largest U.S. locals driven markets include Nevada (excluding contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey.

(3) Gaming positions as of 3/31/2018 for Top 5 U.S. Locals Driven Markets, Alberta and British Columbia; Ontario gaming positions for Gateway’s properties per the prospectus and all other Ontario properties are per The Innovation Group report from November 2017; table games includes poker tables and assumes six gaming positions per table.

Gaming Win per Adult Person^(1)(2)(3)

(in C$)

Sources: United States Census Bureau, Statistics Canada, OLG, BCLC, AGLC, UNLV, Nevada Gaming Control Board.

Notes:    (1) Gaming win is presented for the last twelve months as of March 31, 2018. U.S. gaming win assumes an exchange rate of $1.28 per US$1, representing the average exchange rate from April 1, 2017 to March 31, 2018.

(2) Five largest U.S. locals driven markets include Nevada (excluding gaming win contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey. Illinois data includes VGTs and Alberta data includes VLTs.

(3) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

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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.

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.

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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, 2018. 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.

The following chart presents annual Win in Alberta for the 10-year period ended March 31, 2018.

Historical Gaming Win in Alberta⁽¹⁾

(in $ billions)

Source: AGLC.

Note:    (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.

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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.

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.

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• 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⁽¹⁾⁽³⁾ (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 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 with adjustments made by the Company. 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 audited 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

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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.

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 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

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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 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. For the period from 2011 through March 31, 2018, we were reimbursed $207 million for qualifying capital expenditures incurred since the inception of the FDC and AFDC programs. 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

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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.

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.

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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 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, 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.”

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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(2)	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 / 24 /100	•  MATCH •  The Buffet		Q1 2019	$	5.0 million

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

               (2) The renovation and rebranding of the Point Edward Casino was completed in November 2018.

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.

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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 and expect that they will be funded through a combination of cash on hand and operating cash flows, as well as the available capacity under our revolver to manage timing differences in cash flow. 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(2)	30(2)	•  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.

               (2)Subject to BCLC final approval.

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;

• the historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of audited 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 and pro forma financial information 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;

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• 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, 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;

• 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;

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• 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.

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;

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• 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.

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

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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, a subsidiary of an investment fund managed by Tennenbaum Capital Partners, LLC, an indirect subsidiary of BlackRock, Inc.
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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 10” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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		444,467			334,038			486,690
Intangible assets		241,146			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

Note:    (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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9 and Note 14” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9 and Note 14” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 14 and Note 19”.

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

(8) Represents loss on modification of debt during Q3 2018. See “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim 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 Adjusted 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 13” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 18”.

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

(17) Represents our mandatory debt repayments. See “Index to Financial Statements—Condensed Consolidated Interim Statements of Cash Flows” and “Index to 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 14”.

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Pro Forma Financial Data

Nine months ended September 30, 2018

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 unaudited statement of operations and comprehensive income for the nine months ended September 30, 2018, included elsewhere in this prospectus, as well as the unaudited pro forma combined schedule of revenues and direct expenses of the Central Bundle for the period of January 1, 2018 to July 17, 2018, included elsewhere in this prospectus, as adjusted by the Company 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 agreements, 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 approximately $89.3 million, including net working capital of approximately $26.7 million, 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 audited 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 $35.0 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

46

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.

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 our 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$105.0 million. Proceeds from the increase to the Term Loan B were primarily used to fund the acquisition of the Central Bundle for $62.6 million. Assuming that the amendment was completed on January 1, 2018, we would have recorded an additional $3.6 million in interest expenses for the nine months ended September 30, 2018.

Pro forma adjustments for the Sale and Leaseback Transactions, the 2018 Refinancing and the Term Loan Upsize are reflected below as “Adjustments.”

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.

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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)(2(a))			Central Bundle Pro Forma(2(b))		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
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(4(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(4(b))		31,559			2,671		(2,277	)		31,953
Writedown of non-financial assets		—			—		—			—
Other(4(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(4(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(4(e))		21,388			—		(21,388	)		—
Gain on sale of property and equipment(4(f))		(192,373	)		—		192,399			26
Foreign exchange gain		25,480			—		—			25,480
	$	(129,842	)		—	$	171,578		$	41,736
Income before income taxes	$	156,892		$	20,327	$	(168,255	)	$	8,964
Income tax (expense) recovery(4(g))
Current		(1,321	)		—		—			(1,321	)
Deferred		661			—		—			661
Income and comprehensive income for the period	$	156,232		$	20,327	$	(168,255	)	$	8,304
Net Income per share Basic and Diluted										0.21
Weighted Average Shares Outstanding										39,402

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Notes:    (1) Basis of presentation

Our unaudited pro forma combined statement of operations and comprehensive income for the nine months ended September 30, 2018 has 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 Interim Period Transactions. The unaudited pro forma combined statement of operations and comprehensive income has been prepared as if the Interim Period Transactions occurred on January 1, 2018.

(2) The unaudited pro forma combined statement of operations and comprehensive income has been prepared using the following information, which has been adjusted to reflect the effects of the Interim Period Transactions described above:

a) unaudited consolidated statement of operations and comprehensive income of Gateway for the nine months ended September 30, 2018, which includes the results of operations and comprehensive income from the Central Bundle from July 18, 2018 to September 30, 2018. See “Index to Financial Statements—Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss) for the nine months ended September 30, 2018 and 2017”; 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. See “Index to Financial Statements—Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2018 to July 17, 2018”.

The unaudited pro forma combined schedule of revenues and direct expenses for the Central Bundle for the period of January 1, 2018 to July 17, 2018 has been prepared by the Company using the format and account classifications of the audited Combined Schedules of Revenues and Direct Expenses of the Central Gaming Bundle for years ended March 31, 2018 and 2017 prepared and provided by the OLG. For purposes of this unaudited pro forma combined statement of operations and comprehensive income we have adjusted the format and account classifications to align with those of the Company.

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The following table reconciles between the two formats described above:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		125,993		(3,933	)		122,060
Facility Development Commissions / Permitted Capital Expenditures		—		3,933			3,933
Non-gaming Revenue		15,665		(15,665	)		—
Food and Beverage		—		7,723			7,723
Hotel		—		3,800			3,800
Automated Teller Machine		—		4,218			4,218
Other Revenue		—		3,495			3,495
Total Revenue		141,658		3,571			145,229
Direct Expenses
Payroll		61,668		—			61,668
Operating		7,213		7,222			14,435
Commissions		—		—			—
Hotel		717		(717	)		—
Entertainment		6,475		(6,475	)		—
GST/HST		—		—			—
Other		30		(30	)		—
Marketing and promotion		24,324		—			24,324
Facilities		12,583		—			12,583
Food and Beverage		9,221		—			9,221
Amortization		2,671		—			2,671
Total Direct Expenses		124,902		—			124,902
Excess Revenue over Direct Expenses		16,756		3,571			20,327
Other Income		3,571		(3,571	)		—
Excess revenue over Direct Expenses and Other Income and Finance Costs		20,327		—			20,327

                 (3) 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 unaudited pro forma schedule of revenue and direct expenses 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.

                 (4) Pro Forma adjustments (in thousands of $)

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 Interim Period 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 above, calculated on a straight-line basis over the term of the lease.

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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 acquisition ($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 above, 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

The unaudited pro forma combined statement of operations and comprehensive income have not been adjusted for changes in foreign exchange or estimates in the fair value of the cross currency interest rate swaps.

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 $192,399 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.

Year Ended December 31, 2017

The following table provides our unaudited pro forma combined statement of operations and comprehensive income for the year ended December 31, 2017 and has been prepared by management for illustrative purposes using our historical consolidated statement of operations and comprehensive income for the year ended December 31, 2017, included elsewhere in this prospectus, and the pro forma combined schedules of revenue and direct expenses, included elsewhere in this prospectus, for the Southwest Bundle and the North Bundle, which are based on the site-level financial information for the periods indicated below, prepared or provided by the OLG, and for the Central Bundle, which is based on the audited combined schedules of revenue and direct expenses for the Central Bundle, prepared by and obtained from the OLG, for the year ended March 31, 2018, and adjusted by the Company 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:

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 approximately $95.4 million of consideration, including net working capital of approximately $20.2 million comprised of cash,

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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 and is based on site-level financial information for the Southwest Bundle from January 1, 2017 to May 8, 2017, prepared by and obtained from the OLG. 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 audited 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 approximately $79.3 million of consideration, including net working capital of approximately $10.3 million 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 and is based on the site-level financial information for the North Bundle from January 1, 2017 to May 29, 2017, prepared by and obtained from the OLG.

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

d) Sale and Leaseback Transactions, as described above.

e) 2017 Refinancing

On February 22, 2017, we refinanced our credit facilities. The new debt structure included a $125.0 million senior secured revolving credit facility, a senior secured term loan facility comprising of a US$405.0 million tranche and a $80.0 million tranche, and US$255.0 million 8.25% Second Priority Senior Secured Notes due in 2024. The 2017 Refinancing closed in three tranches, (i) the first tranche closed on February 22, 2017 and we received US$232.5 and $46.0 million; (ii) the second tranche closed on May 5th (upon closing of the Southwest Bundle on May 9, 2017) and we received US$86.3 million and $17.0 million and, (iii) the third tranche closed upon acquiring the North Bundle in which the Company received US$86.2 million and $17.0 million. Total transaction costs incurred related to the 2017 Refinancing were $27.4 million. The proceeds from the 2017 Refinancing were used to repay the existing debt and fund the acquisition of the North Bundle and Southwest Bundle.

f) The 2018 Refinancing, as described above.

g) The Term Loan Upsize, as described above.

Pro Forma adjustments as described in items a) through g) above are reflected below as “Adjustments.”

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.

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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.

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)(2(a))			Southwest Bundle Pro  Forma(2(b))		North Bundle Pro  Forma(2(c))		Central Bundle Pro  Forma(2(d))		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 expenditures		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(4(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(4(b))		44,793			4,905		4,129		7,054		(11,875	)		49,006
Writedown of non-financial assets		23,588			—		—		—		—			23,588
Other(4(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(4(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(4(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

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(In thousands of $)	Gateway (Historical)(2(a))			Southwest Bundle Pro  Forma(2(b))		North Bundle Pro  Forma(2(c))		Central Bundle Pro  Forma(2(d))		Adjustments			Gateway Pro Forma
(Loss) income before income taxes	$	(65,441	)	$	12,816	$	3,924	$	46,364	$	(16,405	)	$	(18,742	)
Income tax (expense) recovery(4(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 Interim Period Transactions. The unaudited pro forma consolidated statement of operations and consolidated income has been prepared as if the Interim Period Transactions occurred on January 1, 2017.

(2) 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 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. See “Index to Financial Statements—Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2017 and 2016”;

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. See “Index to Financial Statements—Unaudited Southwest Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses 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. See “Index to Financial Statements—Unaudited North Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2017 to May 29, 2017”; and

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d) unaudited pro forma combined schedule of revenue and direct expenses of the Central Bundle for the year ended March 31, 2018. See “Index to Financial Statements—Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the year ended March 31, 2018”.

The unaudited pro forma combined schedules of revenues and direct expenses for the Southwest Bundle, the North Bundle and the Central Bundle have been prepared by the Company using the format and account classifications of the respective audited Combined Schedules of Revenues and Direct Expenses for each Bundle prepared and provided by the OLG. For purposes of this unaudited pro forma combined statement of operations and comprehensive income we have adjusted the format and account classifications to align with those of the Company.

The following table reconciles between the two formats for the Southwest Bundle described above:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		42,606		(1,666	)		40,940
Facility Development Commissions / Permitted Capital Expenditures		—		1,666			1,666
Non-gaming Revenue		1,375		(1,375	)		—
Food and Beverage		—		1,286			1,286
Automated Teller Machine		—		1,594			1,594
Other Revenue		—		250			250
Total Revenue		43,981		1,755			45,736
Direct Expenses
Payroll		17,048		—			17,048
Operating		3,194		—			3,194
Commissions		—		—			—
GST/HST		—		—			—
Marketing and promotion		1,915		—			1,915
Facilities		4,728		—			4,728
Food and Beverage		1,019		—			1,019
Amortization		5,016		—			5,016
Total Direct Expenses		32,920		—			32,920
Excess Revenue over Direct Expenses		11,061		1,755			12,816
Other Income		1,755		(1,755	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		12,816		—			12,816

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The following table reconciles between the two formats for the North Bundle described above:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		29,363		(918	)		28,445
Facility Development Commissions / Permitted Capital Expenditures		—		918			918
Non-gaming Revenue		1,109		(1,109	)		—
Food and Beverage		—		969			969
Automated Teller Machine		—		943			943
Other Revenue		—		257			257
Total Revenue		30,472		1,060			31,532
Direct Expenses
Payroll		13,392		—			13,392
Operating		3,642		64			3,706
Commissions		—		—			—
GST/HST		—		—			—
Other		64		(64	)		—
Marketing and promotion		1,589		—			1,589
Facilities		3,977		—			3,977
Food and Beverage		755		—			755
Amortization		4,189		—			4,189
Total Direct Expenses		27,608		—			27,608
Excess Revenue over Direct Expenses		2,864		1,060			3,924
Other Income		1,060		(1,060	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		3,924		—			3,924

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The following table reconciles between the two formats for the Central Bundle described above:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		255,140		(7,250	)		247,890
Facility Development Commissions / Permitted Capital Expenditures		—		7,250			7,250
Non-gaming Revenue		30,038		(30,038	)		—
Food and Beverage		—		14,999			14,999
Hotel		—		6,129			6,129
Automated Teller Machine		—		7,157			7,157
Other Revenue		—		8,580			8,580
Total Revenue		285,178		6,827			292,005
Direct Expenses
Payroll		115,412		—			115,412
Operating		12,499		14,584			27,083
Commissions		—		—			—
Hotel		1,331		(1,331	)		—
Entertainment		13,193		(13,193	)		—
GST/HST		—		—			—
Other		60		(60	)		—
Marketing and promotion		38,687		—			38,687
Facilities		38,774		—			38,774
Food and Beverage		18,631		—			18,631
Amortization		7,054		—			7,054
Total Direct Expenses		245,641		—			245,641
Excess Revenue over Direct Expenses		39,537		6,827			46,364
Other Income		6,827		(6,827	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		46,364		—			46,364

                 (3) 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.

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                 (4) Pro Forma adjustments (in thousands of $)

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 Interim Period 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 the North Bundle ($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

The unaudited pro forma combined statement of operations and comprehensive income have not been adjusted for changes in foreign exchange or estimates in the fair value of the cross currency interest rate swaps.

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.

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In addition to the requirements and restrictions pursuant to the COSAs, we are registered with the AGCO as an “operator”. 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.

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 multiple casino operating agreement, or the MCOSA, the community gaming centre operational services agreements, or the 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

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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.

The historical financial information for the Ontario properties prior to our acquisition thereof was prepared or provided by the OLG and consists of audited 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 audited 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 audited 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 pro forma financial statements and pro forma financial information 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 and pro forma financial information 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.

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 certain audited and 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, 2018 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.

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

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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 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;

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• increase brand awareness;

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

• 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 federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or 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

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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 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

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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.

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

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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.

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 our 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

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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.

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

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statements and note 16 of our audited consolidated financial statements as at December 31, 2017 and 2016, which are attached to this prospectus.

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.

The Municipal Property Assessment Corporation may in certain circumstances increase our assessments for Ontario property tax, which could result in an increase in our total property tax liability.

We are subject to real property tax in Ontario based on the assessed value of our Ontario casinos as determined by the Municipal Property Assessment Corporation (“MPAC”). In our financial statements, we have accrued liability for Ontario real property tax based on the valuations and assessments received from MPAC. In certain cases, however, including if we decide to appeal an assessment, MPAC, or a municipality, is entitled to seek a revision (including an increase) to a previously issued assessment. We would have the ability to contest such a proposed increase. In the event an increase in the assessment is ultimately approved by the Assessment Review Board, there could be an increase in the amount of tax payable and our aggregate property tax liability could be increased, which could have a negative impact on our financial condition.

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

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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, 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.

On December 9, 2018, and prior to any strike action, we tentatively ratified our collective bargaining agreements with the BCGEU with respect to our Grand Villa Casino Burnaby and Starlight Casino New Westminster.

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

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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 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.

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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 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.

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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.

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

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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 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;

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• 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.

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

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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.

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

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$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.

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

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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.

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. If the new gaming properties and related projects are not completed on schedule, our profitability may suffer. 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, 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, 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 23, 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

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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.

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.

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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;

• 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.

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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.

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;

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• 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 corporate 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 corporate 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

• 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. Certain of Catalyst’s actions such as pursuing subsequent equity offerings and dispositions of its shares or a sale of the Company may also trigger the payment of compensation to certain of our executive officers under our Legacy Equity Compensation Program. 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

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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 2018 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. We may also issue up to 1.8 million common shares pursuant to our Legacy Equity Compensation Program. 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.

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

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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.

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.

In Alberta, any sale, assignment or transfer of a 5% or greater interest in Gateway must be disclosed to the AGLC within 10 business days after the effective date of the transaction and approved by the board of the AGLC. Prior approval of the AGLC is required for the acquisition of any “financial interest” in us, our business or in a property to which our AGLC license relates, in a manner other than by way of a sale, assignment or transfer.

In British Columbia, approval of the GPEB is required in advance of the acquisition or disposition of a 5% or greater ownership or beneficial ownership of common shares by any person or group of persons acting in concert. Further, through the OSAs, the BCLC restricts share ownership of our common shares without approval from the BCLC and GPEB. No person or group of persons acting jointly or in concert may hold or beneficially own a Significant Interest without obtaining prior written consent of GPEB and the BCLC. In addition, any person or group of persons acting jointly or in concert holding or beneficially owning, either directly or indirectly, a Significant Interest in our common shares must obtain GPEB and the BCLC’s consent prior to disposing or acquiring common shares or disposing of any part of that interest if such disposition or acquisition would result in a change of control of Gateway. A “Significant Interest” for purposes of the BCLC and the OSA is an interest greater than 5% of our issued and outstanding common shares.

In Ontario, the common shares are also subject to the restrictions set out in the COSAs. Under each COSA, we must disclose when any person becomes the holder or beneficial owner of our voting securities or the voting securities of one of our control persons holding, in the aggregate, more than 5% of the votes attaching to the total of such voting securities, within 30 days of the transaction. Further, each COSA provides that no person may beneficially acquire, directly or indirectly, more than 10% of our voting securities or the voting securities of one of our control persons without the consent of the OLG.

See “Business—Operating Agreements and Licenses” and “Common Share Constraints Required by Gaming Regulators and Change of Control”.

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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 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

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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 bylaws 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 bylaws prior to the closing of this offering. Certain provisions of our amended and restated articles of incorporation and bylaws, 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” 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.

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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.

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.

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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 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

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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 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

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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
November		1.3282		1.3205		1.3098		1.3328

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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

Notes:    (1) U.S. dollar amounts have been translated into C$ at a rate of US $        to C$1.00, the noon buying rate certified for custom purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board as of December         , 2018. Such C$ 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 September 30, 2018, on a pro forma basis giving effect to the offering of shares by the selling shareholders, the number of common shares purchased from us, the total consideration and the average price paid per share during the last five years by existing stockholders (including common shares existing shareholders have a right to acquire under the Legacy Equity Compensation Program) 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 10” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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		444,467			334,038			486,690
Intangible assets		241,146			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

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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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—

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$0.5 million). See “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9 and Note 14” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9 and Note 14” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 14 and Note 19”.

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

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

(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

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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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 13” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 18”.

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

(17) Represents our mandatory debt repayments. See “Index to Financial Statements—Condensed Consolidated Interim Statements of Cash Flows” and “Index to 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 Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 9” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 14”.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the information in “Presentation of Financial Matters and Other Information,” “Selected Consolidated Financial Data and Other Data,” “Summary Consolidated Financial Data and Other Data” and our consolidated financial statements, including the notes thereto. The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including generally accepted accounting principles in the United States, or U.S. GAAP. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under “Risk Factors” and elsewhere in this prospectus.

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. In total, our current properties (including properties leased by us) have over one million square feet of gaming space. 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), F&B outlets and 26 venues which feature live entertainment. 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 and actively look for opportunities to expand and enhance our existing properties and to acquire and develop additional properties. For more specific information about our properties, please see “Business—Our Properties”.

In May 2017, we expanded our business into the Province of Ontario, which is Canada’s largest gaming region. The Southwest Ontario and North Ontario acquisitions have significantly increased our size and regional diversity and are expected to contribute to a significant proportion of our financial results in the future. The Southwest Ontario and North Ontario properties accounted for 27.7% and 33.5% of our total revenues in 2017 and for the nine months ended September 30, 2018, respectively.

Prior to the May 2017 acquisitions of the nine gaming operations of the Southwest Ontario and North Ontario properties, our consolidated results of operations were driven largely by our operations in British Columbia, where 14 of our then 16 gaming operations were located.

On March 15, 2018, we announced that we were selected as the successful proponent by the Ontario Lottery Gaming Corporation (the “OLG”) to operate gaming facilities, which include the Casino Rama Resort and Slots at Georgian Downs (subsequently rebranded as Gateway Casinos Innisfil), in the OLG’s Gaming Bundle 7 (Central) (the “Central Bundle”). On July 18, 2018, we completed the acquisition of the Central Bundle (the “Central Acquisition”) and committed to a 23-year casino operating and service agreement (“COSA”).

We have developed four principal casino brands: Grand Villa, Starlight, Cascades and Playtime. In March 2017, 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, MATCH, CHOW, The Buffet and Halley’s Supper Club (“Halley’s”) which we recently launched at the new Starlight Casino Edmonton. Our properties are generally branded according to

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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 with 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.

Summary of Factors and Trends Affecting Our Performance

The following section provides a summary of the primary factors, which have and which we expect will continue to affect our financial performance. Several of these factors are also associated with risks that affect our business. For a summary of certain risks affecting our business, see the section titled “Risks Related to Our Business” at the end of this Management’s Discussion and Analysis of Financial Condition and Results of Operations. For a comprehensive discussion of risks related to our business and our common shares, please carefully review the “Risk Factors” section of this prospectus.

Our Expansion and Enhancement Strategy

Over the last four years, we have implemented an expansion and enhancement strategy that involves expanding, relocating, renovating and improving our existing properties in Western Canada, deploying our proven strategies at our recently acquired Ontario properties and developing new projects in under-penetrated gaming markets. Central to the success of our strategy are our proprietary casino and F&B brands, which are designed to attract new customers, drive increased visitation and create loyalty with existing customers.

Major historical expansion initiatives included the expansion and rebranding of our Palace Casino (now the Starlight Casino Edmonton), relocation and rebranding of our Lake City Casino Kamloops (now the Cascades Casino Kamloops), the relocation and rebranding of our Baccarat Casino (now the Grand Villa Casino Edmonton), the expansion and rebranding of our Lake City Casino Penticton (now the Cascades Casino Penticton) and the rebranding of our Lake City Casino Kelowna (now the Playtime Casino Kelowna). During the nine months ended September 30, 2018, we also expanded our Chances Playtime Campbell River and Chances Playtime Courtenay to include a MATCH and refreshed the gaming floor, and opened our first MATCH in the Ontario region at the Point Edward casino. In 2017, we commenced a series of expansions and upgrades to our Grand Villa Casino Burnaby and are in the process of an upgrading and expanding Cascades Casino Langley. The Cascades Casino Langley expansion will be phased in throughout 2018 and is expected to be completed in the second quarter of 2019. We also acquired the Southwest Ontario, North Ontario and, in the third quarter of 2018, Central Ontario properties and are in the process of rebranding and redeveloping selected locations. Our expansion and enhancement strategy has generally positively impacted our financial performance overall and on a property by property basis. Construction at existing facilities, in some cases, may temporarily reduce gaming activity at affected properties, thereby resulting in reduced profitability in certain periods in the past.

Consumer Trends

The Canadian gaming industry is subject to shifts in consumer trends and preferences and our revenue and operating results depend, in part, on our ability to respond to such changes in a timely manner. Due to our broad range of gaming facilities and F&B outlets, we believe that we are well positioned to respond to these shifts in consumer trends and preferences.

Our revenue is also impacted by consumer spending habits, including spending on gaming and entertainment activities, which are affected by many factors that are beyond our control, including, but not limited to, prevailing economic conditions, levels of employment, fuel prices, salaries and wages, the availability of consumer credit, and consumer perception of economic conditions.

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Our Private-Public Partnerships and Under-penetrated Markets

The Canadian gaming industry is characterized by mutually beneficial public-private relationships and under-penetrated markets. As a result of these industry specific features, we have been able to drive up visitation and spend at our facilities using our proven enhancement and expansion strategy. In particular, in British Columbia, the BCLC has created and implemented policies to manage competition between gaming properties and 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 regions in which only a single gaming property may be operated. In Alberta, the AGLC has declared an indefinite moratorium on granting new licenses.

Although we do not anticipate that competition will negatively affect our financial performance in the near or long term, there is a possibility that we may lose market share in the future.

Economic Conditions

Our financial performance generally correlates to global and regional economic conditions. However, we operate in stable, locally driven and under-penetrated markets and we believe our business has been more resilient to downturns in the Canadian economy than operations in the major US gaming jurisdictions. In particular, our properties in Western Canada have continued to generate stable revenue over the past three years.

Seasonality

We are subject to seasonality in its operations in the Thompson-Okanagan region in British Columbia and in Ontario. Specifically, the operations experience lower visitation during the first and fourth quarters of the year due to the relativity harsher winter conditions in these regions compared to the rest of the regions in which we operate. Additionally, the Thompson-Okanagan region experiences significant levels of tourism in the second and third quarters of the year, which benefit our operations through direct customer visits from tourists.

Weather

Extreme weather conditions in the areas in which our facilities are located have temporarily adversely affected our business and financial results at certain of our properties. For example, frequent or unusually heavy snowfall, ice storms, rainstorms, flooding, forest fires or other extreme weather conditions have correlated with reduced gaming activity at our affected properties in certain cases.

Regulatory Changes and Changes to our Operating Agreements or Gaming Licenses

Our interests are generally aligned with the Gaming Authorities and Gaming Regulators and our performance has not historically been materially negatively impacted by changes to the regulatory regime governing the Canadian gaming industry. However, due to the highly regulated nature of our business, changes to our operating agreements and/or provincial gaming regulations have and will affect our financial results in certain cases.

For instance, on April 1, 2017, the BCLC introduced changes to the Free Play Program, which resulted in an increase in net revenue, a reduction in our net loss and an increase in our Adjusted EBITDA or reduction in income (loss) and comprehensive income (loss) of $6.5 million and $8.2 million for the year ended December 31, 2017 and nine months ended September 30, 2018, respectively.

In addition to the changes above, the BCLC introduced a new form of OSA that became effective on April 1, 2018. The new OSAs include changes that will increase our share of gaming revenue.

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Operating Segments

We manage our business and report financial results in eight reportable segments: (i) the Grand Villa Casino Burnaby; (ii) the Cascades Casino Langley; (iii) the Starlight Casino New Westminster; (iv) the Thompson-Okanagan Region; (v) the CGCs ; (vi) the Ontario Region; (vii) the Edmonton Region; and (viii) Corporate.

The Thompson-Okanagan Region is comprised of: (i) the Cascades Casino Kamloops; (ii) the Playtime Casino Kelowna; (iii) the Cascades Casino Penticton; and (iv) the Lake City Casino Vernon. We operate the only full-service casinos in the Thompson-Okanagan Region and do not anticipate any new casinos entering the region in the near future.

The Edmonton Region is comprised of (i) the Grand Villa Casino Edmonton and (ii) the Starlight Casino Edmonton.

The Ontario Region is the largest reporting segment by revenue for the nine months ended September 30, 2018 and is comprised of slot machines in: (i) London; (ii) Woodstock; (iii) Dresden; (iv) Clinton; (v) Hanover; (vi) Innisfil and, (vii) Sudbury, casinos in (i) Point Edward; (ii) Thunder Bay; (iii) Sault Ste. Marie and (iv) the Casino Rama Resort. It reflects the operations of the Southwest Ontario properties beginning with their acquisition on May 9, 2017, the North Ontario properties beginning with their acquisition on May 30, 2017, and the Central Ontario properties beginning with their acquisition on July 18, 2018.

The CGCs segment is comprised of: (i) Chances Mission, (ii) Chances Squamish, (iii) the Newton Community Gaming Centre (which ceased operations in April 2018), (iv) Chances Playtime Abbotsford, (v) Chances Playtime Langley (which ceased operations in February 2018), (vi) Chances Playtime Campbell River, (vii) Chances Playtime Courtenay and (viii) Playtime Gaming Victoria.

The “Corporate” segment includes charges for non-site specific staff, such as finance, human resources, marketing and development departments, professional fees, rent and certain other miscellaneous items, on a consolidated basis and not as expenses of any operating segment. Accordingly, segmented results and calculation of Adjusted Property EBITDA exclude Corporate. Corporate includes our headquarters, located in Burnaby, British Columbia, as well as at regional offices in: Kelowna, British Columbia; Edmonton, Alberta; and London, Ontario.

How We Assess the Performance of Our Business

The key performance indicators referenced below are used by management in evaluating our performance and assessing our results of operation and trends affecting our business. We refer to certain key performance indicators used by management and typically used by similar companies operating in the gaming industry, certain of which are not recognized under IFRS.

Revenue

Our revenue is primarily earned from the operation of gaming activities, with additional revenue generated from our non-gaming amenities, which include restaurants, bars and live entertainment venues associated with our gaming facilities, as well as hotels and convention centers. The BCLC, AGLC, GPEB, OLG and AGCO are responsible for managing and conducting or regulating gaming activities in the regions in which we operate. As a gaming operator, we provide facilities and operational services to the BCLC and OLG under multi-year operating agreements and to the AGLC under multi-year licenses and, in return, receive commissions from gaming activities conducted at our properties.

We also assess the revenues earned from slot machines, table games, bingo and other electronic games, and compare the amounts wagered and amounts retained in order to understand and measure the performance of our individual gaming facilities.

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Operating Expenses and Capital Expenditures

Our expenses primarily relate to human resource costs, operating costs, and marketing expenses, lease-related occupancy, F&B costs and other costs. Our growth capital expenditures relate to the development, expansion and major renovation of its facilities and include costs of acquisition and construction, as well as related furniture, fixtures, equipment and other infrastructure. Maintenance capital expenditures are generally comprised of capital costs to maintain our facilities, as well as costs to replace furniture, fixtures and equipment. The BCLC and AGLC in British Columbia and Alberta, respectively, own and maintain the slot machines and other gaming machines and are solely responsible for the cost of such machines and the gaming information systems used in our casinos and CGCs. The BCLC is primarily responsible for the table game supplies used in British Columbia. In the Edmonton Region, we are primarily responsible for the table game equipment. We own all slot machines and other gaming machines in connection with the properties in Ontario and are responsible for the cost of acquiring and maintaining all gaming equipment.

Adjusted EBITDA

We use Adjusted EBITDA to manage our operating results. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that Adjusted EBITDA is widely used to measure the performance, and as a basis for valuation, of gaming companies, and is therefore useful in measuring performance at a property or segment level as well. 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) writedown of non-financial assets. For more information about 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 “Prospectus Summary—Selected Summary Historical Financial Information.”

Adjusted Property EBITDA

We use Adjusted Property EBITDA to manage the operating results of our segments. Adjusted Property EBITDA is presented exclusively as a supplemental disclosure because management believes that Adjusted Property EBITDA is widely used to measure the performance, and as a basis for valuation, of gaming companies, and is therefore useful in measuring performance at a property or segment level as well. Adjusted Property EBITDA means the Adjusted EBITDA for each reporting segment or property, as applicable, excluding corporate costs. 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) writedown of nonfinancial assets. For more information about 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 Property EBITDA to its most directly comparable measures calculated in accordance with IFRS, see “Prospectus Summary—Selected Summary Historical Financial Information” and “—Results of Operations” elsewhere in this prospectus.

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Results of Operations

Select Annual Consolidated Information

The following tables present selected financial information of our consolidated operations for the fiscal years ended December 31, 2017, 2016 and 2015 and the nine months ended September 30, 2018 and 2017.

Consolidated Statement of Financial Performance

	Nine months ended September 30,						Year ended December 31,
(In thousands of $)	2018			2017			2017			2016			2015
Revenues
Gaming	$	399,620		$	270,571		$	383,069		$	248,049		$	225,382
Food and beverage		52,243			47,955			65,975			55,409			42,770
Hotel, automated teller machines and other		32,414			20,442			29,777			24,707			21,775
		484,277			338,968			478,821			328,165			289,927
Expenses
Operating expenses(1)		368,028			233,861			338,872			231,830			202,246
Amortization and depreciation		52,510			72,400			98,299			83,231			67,720
Writedown of non-financial assets(2)		—			167			23,588			35			93
Other(3)		28,248			11,289			15,209			5,872			7,881
Share-based compensation (recovery)		8,441			17,741			19,631			(3,111	)		5,410
Other expenses(4)		(129,842	)		39,840			48,663			32,548			35,299
Income tax recovery		660			112			(367	)		(1,784	)		—
		328,045			375,410			543,895			348,621			318,649
Income (Loss) and comprehensive income (loss)		156,232			(36,442	)		(65,074	)		(20,456	)		(28,722	)
Income attributable to non-controlling interest		7			7			10			19			—
Income (Loss) and comprehensive income (loss) to shareholders of the Company	$	156,225		$	(36,449	)	$	(65,084	)	$	(20,475	)	$	(28,722	)
Basic and diluted loss per share	$	3.97		($	0.93	)	($	1.65	)	($	0.52	)	$	(0.73	)

Notes:    (1) Represents the human resources, operating, marketing and promotion, occupancy and cost of food and beverage line items of our consolidated statements of operations and comprehensive income (loss).

(2) Represents a writedown of non-financial assets on the Lake City Casino Penticton of $0.2 million for the nine months ended September 30, 2017. Represents a writedown of non-financial assets on the Grand Villa Casino Edmonton of $22.6 million and a suspended OSA for a community gaming center of $0.8 million, and on the Lake City Casino Penticton of $0.2 million for the year ended December 31, 2017. See “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 10.”

(3) Represents costs associated with restructuring (Q3 2018—$4.4 million; Q3 2017—$0.8 million; 2017—$0.8 million; 2016—$0.8 million; 2015—$0.2 million), business acquisitions (Q3 2018—$2.3 million; Q3 2017—$3.9 million; 2017—$7.0 million; 2016—$2.2 million; 2015—$2.5 million), transaction costs (Q3 2018—$16.3 million; Q3 2017—$1.8 million; 2017—$5.2 million; 2016—$0.3 million; 2015—$nil), site pre-opening costs (Q3 2018—$3.7 million; Q3 2017—$0.9 million; 2017—$1.6 million; 2016—$2.1 million; 2015—$2.1 million), lease

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termination (Q3 2018—$nil; Q3 2017—$nil; 2017—$nil; 2016—$nil; 2015—$2.1 million) and other expenses (Q3 2018—$1.5 million; Q3 2017—$3.8 million; 2017—$0.6 million; 2016—$0.5 million; 2015—$1.0 million). See “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 17”.

(4) Other expenses, in thousands of dollar, includes net interest expense (Q3 2018—$41.7 million; Q3 2017—$43.4 million; 2017—$58.9 million; 2016—$35.4 million), change in fair value of embedded derivatives (Q3 2018—($4.1 million); Q3 2017—($3.8 million); 2017—($9.3 million); 2016—($0.7 million)), change in fair value of cross currency interest rate swaps (Q3 2018—($21.9 million); Q3 2017—$37.2 million; 2017—$32.0 million; 2016—$nil), loss on debt extinguishment (Q3 2018—$15.1 million; Q3 2017—$16.1 million; 2017—$16.1 million; 2016—$nil), loss on debt modification (Q3 2018—$6.3 million; Q3 2017—$nil; 2017—$nil; 2016—$nil), gain on sale of property and equipment (Q3 2018—$192.4 million; Q3 2017—$nil; 2017—$nil; 2016 - $2.2 million), and (gain) loss on foreign exchange (Q3 2018—$25.5 million; Q3 2017—($53.1 million); 2017—($49.0 million); 2016—$nil). For the nine months ended September 30, 2018 and 2017, see “Index to Financial Statements—Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)”. For the year ended December 31, 2017, 2016 and 2015 see “Index to Financial Statements—Consolidated Statements of Operations and Comprehensive Loss”.

Consolidated Statements of Financial Position

	As at September 30,		As at December 31,
(In thousands of $)	2018		2017		2016
Total assets	$	1,005,543	$	1,036,370	$	812,531
Total liabilities		1,050,915		1,096,523		617,743
Total non-current financial liabilities(1)		894,074		886,954		481,500

Note:    (1) Non-current financial liabilities represent deferred consideration payable, deferred rent and long-term debt.

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		2015
Adjusted EBITDA(1)	$	122,635	$	108,984	$	144,206	$	96,335	$	87,681
Corporate Costs		24,972		15,473		24,909		14,524		11,103
Total Adjusted Property EBITDA(1)	$	147,607	$	124,457	$	169,115	$	110,859	$	98,784

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

	Nine months ended September 30,						Year ended December 31,
(In thousands of $)	2018			2017			2017			2016			2015
Income (loss) and comprehensive income (loss)	$	156,232		$	(36,442	)	$	(65,074	)	$	(20,456	)	$	(28,722	)
Amortization of intangible assets		20,951			40,112			53,506			55,661			44,791
Depreciation of property and equipment		31,559			32,288			44,793			27,570			22,929
Interest expense		41,805			44,031			59,566			35,477			34,212
Interest income		(141	)		(663	)		(679	)		(28	)		(29	)
Income tax expense (recovery)		660			112			(367	)		(1,784	)		—
EBITDA(1)		251,066			79,438			91,745			96,440			73,181
Share-based compensation (recovery)(2)		8,441			17,741			19,631			(3,111	)		5,410
Change in fair value of embedded derivatives(3)		(4,110	)		(3,759	)		(9,280	)		(700	)		700
Gain on sale of property and equipment(4)		(192,373	)		(5	)		(36	)		(2,201	)		416
Writedown of non-financial assets(10)		—			167			23,588			35			93
Business acquisition, transaction, site pre-opening, restructuring and other(5)		28,248			11,289			15,209			5,872			7,881
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			—			—			—			—
Loss (gain) on foreign exchange		25,480			(53,066	)		(49,034	)		—			—
Non-cash deferred rent(6)		6,386			1,124			1,504			—			—
Tax adjustment for prior periods(7)		—			2,753			2,753			—			—
Adjusted EBITDA(1)(8)	$	122,635		$	108,984		$	144,206		$	96,335		$	87,681
Adjusted EBITDA Margin(1)		25.2	%		32.2	%		30.1	%		29.4	%		30.2	%
Free Cash Flow adjustments
Less maintenance capital expenditures		3,872			2,916			4,140			3,834			4,336
Less interest expense		41,805			44,031			59,566			35,477			34,212
Less cash taxes paid		3,250			—			—			45			—
Less mandatory debt repayments(9)		1,598			9,448			11,114			25,410			15,627
Free Cash Flow(1)	$	72,110		$	52,589		$	69,386		$	31,569		$	33,506
Free Cash Flow Conversion(1)		58.8	%		48.3	%		48.1	%		32.8	%		38.2	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) Includes non-cash share-based compensation (recovery).

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

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

(5) Represents costs associated with restructuring (Q3 2018—$4.4 million; Q3 2017—$0.8 million; 2017—$0.8 million; 2016—$0.8 million; 2015—$0.2 million), business acquisitions (Q3 2018—

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$2.3 million; Q3 2017—$3.9 million; 2017—$7.0 million; 2016—$2.2 million; 2015—$2.5 million), transaction costs (Q3 2018—$16.3 million; Q3 2017—$1.8 million; 2017—$5.2 million; 2016—$0.3 million; 2015—$nil), site pre-opening costs (Q3 2018—$3.7 million; Q3 2017—$0.9 million; 2017—$1.6 million; 2016—$2.1 million; 2015—$2.1 million), lease termination (Q3 2018—$nil; Q3 2017—$nil; 2017—$nil; 2016—$nil; 2015—$2.1 million) and other expenses (Q3 2018—$1.5 million; Q3 2017—$3.8 million; 2017—$0.6 million; 2016—$0.5 million; 2015—$1.0 million). See “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements—Note 12” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 17”.

(6) 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. The adjustment removes the non-cash portion of rental expense.

(7) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

(8) 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 $13.0 million of Adjusted 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 $2.0 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 $7.0 million adverse impact on EBITDA.

(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

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from new collective bargaining agreements or our inability to reach an agreement with the unions could have an adverse impact on our operations.”

(9) For the nine months ended September 30, 2018, we excluded repayments of $402,975 and $81,601 made to discharge our old credit facility and a mortgage attached to the Langley property respectively pursuant to the refinancing completed in March of 2018. For the year ended December 31, 2017, we excluded the repayment made to discharge our old credit facility and senior secured notes pursuant to the refinancing completed in February 2017.

(10) Represents a writedown of non-financial assets on the Lake City Casino Penticton of $0.2 million for the nine months ended September 30, 2017. Represents a writedown of non-financial assets on the Grand Villa Casino Edmonton of $22.6 million, a suspended OSA for a community gaming center of $0.8 million, and on the Lake City Casino Penticton of $0.2 million for the year ended December 31, 2017. For the year ended 2016 and 2015, see “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statement—Note 6” and “Index to Financial Statements—Notes to Gateway Casinos & Entertainment Limited Consolidated Financial Statements—Note 10.”

Nine months ended September 30, 2018 compared to nine months ended September 30, 2017

The following section provides an overview of our financial performance for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017.

Revenue

Revenue was $484.3 million for the nine months ended September 30, 2018, representing an increase of 145.3 million, or 42.9% when compared to the nine months ended September 30, 2017. The increase for the nine months ended was attributable primarily to the inclusion of the Southwest Ontario and North Ontario properties for the full reporting period and the newly acquired Central Ontario properties which contributed a combined $60.3 million of revenue partially offset by lowered revenue in the Thompson-Okanagan region. The Ontario Region contributed a combined $222.5 million of revenue for the nine months ended September 30, 2018.

Gaming revenue was $399.6 million for the nine months ended September 30, 2018, representing an increase of $129.0 million, or 47.7%, when compared to the nine months ended September 30, 2017. The growth in revenue for the nine months ended September 30, 2018 was attributable mainly to the acquisition of the Southwest Ontario, North Ontario and Central Ontario properties. Prior year results included operations for the Southwest Ontario and North Ontario properties only since their acquisition in the second quarter of 2017.

Combined gaming revenue for the BC and Alberta operating segments, which was negatively impacted by the labor strike in the Thompson-Okanagan properties, increased by 1.9% for the nine months ended September 30, 2018. Table games revenue at our BC operations continued to benefit from the impact of the improved compensation under the new OSAs effective April 1, 2018 with an increase in our share of the revenue from regular table games.

F&B revenue was $52.2 million for the nine months ended September 30, 2018, representing an increase of $4.3 million, or 8.9% when compared to nine months ended September 30, 2017. The overall increase for the nine months ended September 30, 2018 was due mainly to the additional F&B outlets at our Grand Villa Casino Burnaby, the introduction of MATCH at the Chances Playtime Campbell River and Chances Playtime Courtenay, and revenue from F&B outlets in the Southwest Ontario, North Ontario and Central Ontario properties.

Hotel revenue was $12.2 million for the nine months ended September 30, 2018, representing an increase of $1.6 million, or 14.6% when compared to the nine months ended September 30, 2017. The increase in hotel revenue was driven primarily by revenue from the Casino Rama Resort, which contributed $1.7 million since acquisition, and increased revenue at the Delta hotel in Burnaby offset by lower revenue at the Coast hotel in Langley.

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Other revenue, excluding hotel revenue, was $20.2 million for the nine months ended September 30, 2018, representing an increase of $10.4 million, or 106.4%, when compared to the nine months ended September 30, 2017. The increases in the quarter were driven predominantly by automated teller machine (“ATM”) revenue, entertainment revenue at the Central Ontario properties and operations at the Southwest Ontario and North Ontario properties which were acquired in May of 2017.

Operating expenses

Operating Expenses were $368.0 million for the nine months ended September 30, 2018, representing an increase of $134.2 million, or 57.4% compared to the nine months ended September 30, 2017. Excluding the impact of the Central Ontario properties, the increase was 37.4% for the nine months ended September 30, 2018 due primarily to property rent incurred for the period resulting from the sale and leaseback of the lands and premises in March of 2018 constituting the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley (collectively, the “Sale and Leaseback Transactions”), and the results of operating the Southwest Ontario and North Ontario properties. Under the Sale and Leaseback Transactions, 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. Occupancy expenses were $64.0 million for the nine months ended September 30, 2018, representing an increase of $40.2 million when compared to the nine months ended September 30, 2017. The increase is driven primarily by the incremental occupancy expenses of i) $7.5 million for the Southwest Ontario and North Ontario properties, which were acquired in May of 2017, ii) $6.0 million for the Central Ontario properties, iii) $24.3 million since the completion of the Sale and Leaseback Transactions on March 13, 2018, and iv) $1.9 million from the phased expansion and opening of the Starlight Edmonton Casino. Higher F&B expenses resulting from the expansion of our F&B offering, and higher human resources costs from supporting our continued growth were being offset by lowered marketing expenses in relation to the cost of providing promotional slot play credits to patrons that became effective on April 1, 2017 (See “Changes to Our BC Casino Operating Agreements” in this MD&A).

Interest expenses

Interest expense was $41.8 million for the nine months ended September 30, 2018, representing a decrease of $2.1 million when compared to the same period in 2017. The lower interest is due to the reduction in debt from the Sale and Leaseback Transactions and a reduction in interest rate as a result from the 2018 Refinancing (See the “Indebtedness” in this MD&A).

Adjusted EBITDA

Adjusted EBITDA was $122.6 million for the nine months ended September 30, 2018 representing an increase of $13.7 million, or 12.5% for the year to date. The increase in Adjusted Property EBITDA was driven by the acquisition of the Central Ontario, Southwest Ontario and North Ontario properties, which contributed a combined Adjusted Property EBITDA of $75.5 million compared to $36.3 million in the prior year from the Southwest Ontario and North Ontario properties. During the first nine months of 2018, ongoing challenges at Grand Villa Casino Edmonton and construction disruption at the Palace Casino Edmonton (rebranded as Starlight Casino Edmonton with its grand opening on September 26, 2018) continued to negatively impact the Edmonton Region.

Free Cash Flow

Free Cash Flow was $72.1 million for the nine months ended September 30, 2018, representing an increase of $19.5 million, or 37.1%, compared to $52.6 million for the nine months ended September 30, 2017. The increase in the year was impacted by: (i) the Adjusted EBITDA from the acquisition of the Central Ontario, Southwest Ontario and North Ontario properties and (ii) lower mandatory debt principal repayments and interest expense as a result of the negotiated debt structure.

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Reportable Segments

Operating Results—Detailed Segment Information

The following tables present consolidated revenue and Adjusted Property EBITDA by segment for the nine months ended September 30, 2018 and 2017.

Grand Villa Casino Burnaby

The following table presents the Grand Villa Casino Burnaby’s results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(In thousands of $)	2018			2017
Gaming	$	66,493		$	57,541
Food and Beverage		12,443			10,348
Hotel, Automated Teller Machines and Other		11,564			10,097
Total Property Revenue		90,500			77,986
Property Operating Expense(1)		59,943			43,606
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		30,557			34,380
Non-cash deferred rent(2)		2,407			—
Tax adjustment for prior periods(3)		—			635
Adjusted Property EBITDA(1)	$	32,964		$	35,015
Adjusted Property EBITDA Margin(1)		36.4	%		44.9	%
Gaming Statistics(1)
Table Drop (in millions of $)	$	369.1		$	327.1
Table Win %		15.9	%		16.9	%
Slot Coin-in (in millions of $)	$	1,760.8		$	1,529.7
Slot Win %		7.1	%		7.1	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue increased by $12.5 million, or 16.0%, for the nine months ended September 30, 2018. Gaming revenue increased by $9.0 million or 15.6%, for the nine months ended September 30, 2018. Total property revenue benefited continued growth in the business from the redevelopment of the property in 2017, as well as from the effects of labor disruption at Hard Rock Casino Vancouver, which ended on July 22, 2018. We believe that we have been able to retain approximately 30% to 40% of this business post labor disruption. Slot revenue increased 14.1% for the nine months ended September 30, 2018 when compared to the same periods in 2017. Table games revenue continued to be positively impacted by the new OSA that became effective on April 1, 2018. Service provider compensation from regular-limit table games and poker increased from 40% of Net Win

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to 42.5%, and from 75.0% to 77.5%, respectively. When compared to prior year, table games revenue increased 18.2% for the nine months ended September.

F&B revenue increased by 20.2% for the nine months ended September 30, 2018 when compared to the same period in 2017, driven primarily by incremental sales from the CHOW and Atlas restaurant which were added in the third and fourth quarter of 2017. Hotel, Automated Teller Machines (“ATMs”) and other revenue increased by 14.5% when compared to the nine months ended September 30, 2017, driven by the increase in revenue generated from ATMs due to increased gaming. The average room rate for the hotel has continued to improve, rising by 8.2% to $205.71 for the nine months ended September 30, 2018 compared to $190.2 in the prior year period.

Adjusted Property EBITDA

Adjusted Property EBITDA was $33.0 million for the nine months ended September 30, 2018, representing a decrease of $2.1 million, or 5.9% when compared to the same period in 2017. The results were driven by a combination of improved gaming and non-gaming revenues, and new OSA changes to the service provider compensation, being offset by property rent of $9.8 million incurred from the Sale and Leaseback Transactions that closed on March 13, 2018. Excluding the effect of rent in 2018, Adjusted Property EBITDA would have grown 22.0% for the first nine months of 2018.

Cascades Casino Langley

The following table presents the Cascades Casino Langley’s results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(In thousands of $)	2018			2017
Gaming	$	37,120		$	34,345
Food and Beverage		7,555			8,262
Hotel, Automated Teller Machines and Other		3,813			3,228
Total Property Revenue		48,488			45,835
Property Operating Expense(1)		30,044			24,052
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		18,444			21,783
Non-cash deferred rent(2)		1,392			—
Tax adjustment for prior periods(3)		—			582
Adjusted Property EBITDA(1)	$	19,836		$	22,365
Adjusted Property EBITDA Margin(1)		40.9	%		48.8	%
Gaming statistics(1)
Table Drop (in millions of $)	$	91.8		$	87.4
Table Win %		19.3	%		20.0	%
Slot Coin-in (in millions of $)	$	1,372.0		$	1,239.9
Slot Win %		6.8	%		7.0	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

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(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue increased by $2.7 million, or 5.8%, for the nine months ended September 30, 2018 when compared to the same period in 2017. Gaming revenue increased by $2.8 million, or 8.1%, for the nine months ended September 30, 2018, driven by the combination of growth in table games, slots and bingo revenues. The gaming floor underwent a refresh in 2018, replacing a number of slot machines with newer products, and 50 slot machines were added to the gaming floor in the first quarter of 2018. Bingo operations were relocated from the former Chances Langley to Cascades Casino Langley in the second quarter of 2018, contributing revenue of $0.6 million to September 30, 2018. Gaming revenue also increased from the impact of the new OSA discussed above for Grand Villa Casino Burnaby.

F&B revenue decreased by $0.7 million, or 8.6%, for the nine months ended September 30, 2018 when compared to the same period in 2017. F&B revenue was negatively impacted by construction disruptions related to the expansion of MATCH restaurant’s patio space and kitchen upgrades, and the addition of a F&B outlet. Excluding the tax adjustment for prior periods recorded in prior year quarter, Hotel, automated teller machine and other revenue was consistent with the nine months ended September 30, 2017 due to hotel revenue being negatively impacted by ongoing hotel renovations which reduced the number of available rooms.

Adjusted Property EBITDA

Adjusted Property EBITDA was $19.8 million for the nine months ended September 30, 2018, representing a decrease of $2.5 million, or 11.3% when compared to the same period in 2017. The results were driven primarily by a combination of improved gaming revenue and new OSA changes to the service provider compensation being offset by property rent of $5.6 million for the nine months ended September 30, 2018, respectively, incurred from the Sale and Leaseback Transactions that closed on March 13, 2018. Excluding the effect of the rent expense in 2018, Adjusted Property EBITDA would have grown 13.9% to the nine months ended September 30, 2018.

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Starlight Casino New Westminster

The following tables present the Starlight Casino New Westminster’s results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(in thousands of $)	2018			2017
Revenue
Gaming	$	33,607		$	33,287
Food and Beverage		5,314			5,340
Automated Teller Machines and Other		1,703			1,276
Total Property Revenue	$	40,624		$	39,903
Property Operating Expense(1)		30,068			25,655
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		10,556			14,248
Non-cash deferred rent(2)		982			—
Tax adjustment for prior periods(3)		—			457
Adjusted Property EBITDA(1)	$	11,538		$	14,705
Adjusted Property EBITDA Margin(1)		28.4	%		36.9	%
Gaming statistics(1)
Table Drop (in millions of $)	$	149.4		$	163.9
Table Win %		18.4	%		18.1	%
Slot Coin-in (in millions of $)	$	1,019.5		$	946.9
Slot Win %		7.2	%		7.5	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue increased by $0.7 million, or 1.8%, for the nine months ended September 30, 2018. Gaming revenue increased by $0.3 million, or 1.0%, for the nine months ended September 30, 2018 driven by improved slots revenue. Table games revenue for the nine months ended September 30, 2018 was consistent with prior year with lower high-limit table play being partially offset by the increase in service provider compensation from regular-limit table games and poker as a result of the new OSA.

F&B revenue was $5.3 million for the nine months ended September 30, 2018, which was consistent when compared to the same period in 2017. Excluding the tax adjustment for prior periods recorded in the third quarter of 2017, ATM and Other revenue decreased by 1.7% for the nine months ended September 30, 2018 due mainly lower rental revenue.

Adjusted Property EBITDA

Adjusted Property EBITDA was $11.5 million for the nine months ended September 30, 2018, representing a decrease of $3.2 million or 21.5% when compared to the same period in 2017. The results were driven primarily by the incremental property rent of $4.0 million for the year to date incurred from the Sale and

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Leaseback Transactions that closed on March 13, 2018. Excluding the effect of the property rent incurred in 2018, Adjusted EBITDA would have grown by 5.5% for the nine months ended September 30, 2018.

Thompson-Okanagan Region

The following table presents the Thompson-Okanagan casinos’ results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(in thousands of $)	2018			2017
Revenue
Gaming	$	26,470		$	34,568
Food and Beverage		7,490			10,880
Automated Teller Machines and Other		1,501			1,097
Total Property Revenue		35,461			46,545
Property Operating Expense(1)		29,704			36,123
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		5,757			10,422
Non-cash deferred rent(2)		78			77
Tax adjustment for prior periods(3)		—			688
Adjusted Property EBITDA(1)	$	5,835		$	11,187
Adjusted Property EBITDA Margin(1)		16.5	%		24.0	%
Gaming statistics(1)
Table Drop (in millions of $)	$	29.7		$	46.3
Table Win %		24.1	%		21.7	%
Slot Coin-in (in millions of $)	$	1,157.1		$	1,471.6
Slot Win %		7.0	%		7.1	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue decreased by $11.1 million, or 23.8%, for the nine months ended September 30, 2018. Total property revenue of the four casinos in this region was negatively impacted due to the effect of a labor strike that started on June 29, 2018 and continued through the third quarter of 2018. Casinos’ hours of operations were reduced from the start of the strike with table games closed at Cascades Casino Penticton, Lake City Casino Vernon and Cascades Casino Kamloops for the duration of the strike. A new collective bargaining agreement was successfully ratified by employees on November 8, 2018 and operations reopened on November 13 and 14, 2018, with operations expected to return to normal levels in the weeks thereafter.

F&B revenue was $7.5 million for the nine months ended September 30, 2018, representing a decrease of $3.4 million, or 31.2% when compared to the same period in 2017. F&B outlets operated at reduced hours while Atlas and MATCH locations were closed at most casino locations for the duration of the strike.

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Adjusted Property EBITDA

Adjusted Property EBITDA for the nine months ended September 30, 2018 decreased by $5.4 million, or 47.8%, when compared to the same period in 2017. Impacted by the effect of the labor strike in the quarter, management is focused on rebuilding the operations as a new collective bargaining agreement has been reached on November 8, 2018. See “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”.

Edmonton Region

The following tables present the Edmonton casinos’ results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(in thousands of $)	2018			2017
Revenue
Gaming	$	14,879		$	15,562
Food and Beverage		6,815			6,464
Automated Teller Machines and Other		1,226			755
Total Property Revenue		22,920			22,781
Property Operating Expense(1)		32,418			28,707
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		(9,498	)		(5,926	)
Non-cash deferred rent(2)		1,527			1,038
Tax adjustment for prior periods(3)		—			304
Adjusted Property EBITDA(1)	$	(7,971	)	$	(4,584	)
Adjusted Property EBITDA Margin(1)		(34.8	%)		(20.1	%)
Gaming statistics(1)
Table Drop (in millions of $)	$	107.6		$	101.2
Table Win %		13.6	%		15.3	%
Slot Coin-in (in millions of $)	$	654.2		$	674.3
Slot Win %		7.7	%		7.7	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

               (2) 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. The adjustment removes the non-cash portion of rental expense.

               (3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue increased by $0.1 million or 0.6%, for the nine months ended September 30, 2018, driven primarily by contribution from the Starlight Casino Edmonton, which completed its phased renovations and had its grand opening on September 26, 2018, offset by lower revenue contribution from Grand Villa Casino Edmonton. Gaming revenue decreased by $0.7 million, or 4.4%, for the nine months ended September 30, 2018. The decrease, when compared to the same period in 2017, was attributable to lower overall revenue at Grand Villa Casino Edmonton being offset by Starlight Casino Edmonton. The Grand Villa Casino Edmonton continued to face challenges from construction activities adjacent to the property impacting the performance of the facility.

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Revenue at the Starlight Casino Edmonton saw an improvement of $2.7 million, or 25.4% for the nine months ended September 30, 2018 driven predominantly from an improvement in gaming and F&B revenues. Construction work on the expansion, which commenced in May 2017, reduced the gaming space by approximately 40% during the peak of construction. The Buffet, Nova Bar and MATCH all opened to the public during in the first quarter of 2018, and on June 15, 2018, the newly renovated slots floor opened to the public. The final phase of opening consists of an Atlas restaurant and expanded gaming floor occurred in the third quarter of 2018 as part of the grand opening of the facility.

Segment F&B revenue was $6.8 million for the nine months ended September 30, 2018, representing an increase of $0.4 million, or 5.4%, when compared to the same period in 2017. The results were driven mainly by increased F&B revenue from the introduction of new F&B outlets at the Starlight Casino Edmonton being partially offset by the decrease experienced in Grand Villa Casino Edmonton.

Adjusted Property EBITDA

Adjusted Property EBITDA was a loss of $8.0 million for the nine months ended September 30, 2018, representing a decrease of $3.4 million, or 73.9%, when compared to the same period in 2017. The loss was due to the on-going operational issues and continued construction activities around the ICE district at the Grand Villa Casino Edmonton and the renovations and construction disrupting the operations leading up to the grand opening at Starlight Casino Edmonton for the majority of the nine months period ended.

Ontario Region

The following table presents the Southwest Ontario and North Ontario properties’ results of operations for the nine months ended September 30, 2018 and 2017. The nine months ended September 30, 2017 represents the period beginning from the time of closing of the acquisitions of the Southwest Ontario and North Ontario properties, on May 9, 2017 and May 30, 2017 respectively, and ending on September 30, 2017.

	Nine months ended September 30,
(in thousands of $)	2018			2017
Revenue
Gaming	$	203,153		$	77,176
Food and Beverage		8,267			2,233
Automated Teller Machines and Other		11,120			2,642
Total Property Revenue		222,540			82,051
Property Operating Expense(1)		147,051			45,799
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		75,489			36,252
Adjusted Property EBITDA(1)	$	75,489		$	36,252
Adjusted Property EBITDA Margin(1)		33.9	%		44.2	%
Gaming statistics(1)
Table Drop (in millions of $)	$	155.0		$	13.6
Table Win %		3.4	%		20.6	%
Slot Coin-in (in millions of $)	$	4,512.0		$	1,759.1
Slot Win %		8.4	%		8.1	%

Note:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

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Revenue

Revenue for the nine months ended September 30, 2018 was $222.5 million. Excluding the contribution from the newly acquired Central Ontario properties, revenue was $162.3 million for the nine months ended September 30, 2018. Since the closing of the acquisition of Southwest Ontario properties and North Ontario properties, we have begun the implementation of Gateway’s Gaming Management System, or GMS, that underpins its customer loyalty program. Beginning June 15, 2018, there were a series of system outages resulting in major gaming floor disruptions at five properties where GMS was installed, which resulted in slot machines inoperability and an estimated impact of $5.2 million to date. Slot revenue for the Southwest Ontario properties and North Ontario properties was $142.0 million for the nine months ended September 30, 2018.

F&B revenue for the nine months ended September 30, 2018 was $8.3 million. Excluding the contribution from Central Ontario Properties, F&B revenue for the period was $5.1 million, representing an increase of $2.8 million when compared to the same period in 2017, due primarily to the Ontario properties acquisition and the newly opened F&B outlets including MATCH and The Buffet in the third quarter of 2018 at the Point Edward facility.

Hotel, ATM and Other revenue for the nine months ended September 30, 2018 was $11.1 million, representing an increase of $8.5 million, or 170.2% when compared to the same period in 2017 due primarily to the Southwest Ontario and North Ontario properties and the hotel, ATM and entertainment revenue contribution from the Central Ontario Properties.

Adjusted Property EBITDA

Adjusted Property EBITDA was $75.5 million for the nine months ended September 30, 2018. The Adjusted Property EBITDA Margin was 33.9% for the respective period, which was noticeably higher than our average of 30.5% due to a higher proportion of slot revenue of total revenue. Excluding Central Ontario Properties’ contribution of $13.6 million or 18.0% of the segment’s Adjusted Property EBITDA, the Southwest Ontario and North Ontario achieved an Adjusted Property EBITDA of $61.9 million.

CGCs

The following tables present the CGCs’ results of operations for the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,
(In thousands of $)	2018			2017
Revenue
Gaming	$	17,898		$	18,092
Food and Beverage		4,359			4,428
Automated Teller Machines and Other		1,481			1,255
Total Property Revenue		23,738			23,775
Property Operating Expense(1)		13,822			14,354
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		9,916			9,421
Non-cash deferred rent(2)		—			9
Tax adjustment for prior periods(3)		—			87
Adjusted Property EBITDA(1)	$	9,916		$	9,517
Adjusted Property EBITDA Margin(1)		41.8	%		40.0	%
Gaming Statistics(1)
Slot Coin-in (in millions of $)	$	810.0		$	747.8
Slot Win %		7.2	%		7.2	%

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Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $23.7 million for the nine months ended September 30, 2018, which is consistent with prior year-to-date. Gaming revenue, which is comprised mainly of slots revenue, was $13.7 million for the nine months ended September 30, 2018, representing an increase of $0.9 million, or 6.8%, year-to-date. Gaming revenue was driven by the increase in slots revenue being offset largely by the decline in Bingo revenue, due to the closure of the CGC Langley and CGC Newton operations on December 21, 2017 and April 21, 2018, respectively.

F&B revenue was $4.4 million for the nine months ended September 30, 2018, representing a decrease of $0.1 million, or 1.6%, when compared to prior year period. The decrease was due primarily to the construction disruption during the construction of MATCH at our Chances Playtime Campbell River and Chances Playtime Courtenay which opened in the third quarter of 2018.

Adjusted Property EBITDA

Adjusted Property EBITDA was $9.9 million for the nine months ended September 30, 2018, representing an increase of $0.4 million, or 4.2% when compared to the same period prior year. The increase was due primarily to a combination of improved slots revenue, ATM revenue, and lowered property expense being offset partially by the decline in bingo revenue.

Corporate

The Corporate segment relates to the head office in Burnaby, British Columbia and regional offices in Kelowna, British Columbia, Edmonton, Alberta and London, Ontario. Corporate costs increased for the nine month period ended September 30, 2018 due to the leasing of additional office spaces in Burnaby, Edmonton and London, and higher human resource and administration costs to support our growth and our expansion into Ontario, specifically. Corporate costs as a percentage of total revenue were roughly consistent across periods.

	Nine months ended September 30,
(in thousands of $)	2018			2017
Corporate revenue	$	6		$	92
Corporate costs		24,978			15,565
Corporate costs (net of corporate revenue)	$	24,972		$	15,473
% of revenue		5.2	%		4.6	%

Year ended December 31, 2017 compared to year ended December 31, 2016

The following section provides an overview of our financial performance for the year ended December 31, 2017 compared to the year ended December 31, 2016.

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Revenue

Revenue was $478.8 million for the year ended December 31, 2017, representing an increase of $150.6 million, or 45.9%, compared to $328.2 million for the year ended December 31, 2016.

Gaming revenue was $383.1 million for the year ended December 31, 2017, representing an increase of $135.1 million, or 54.4%, compared to $248.0 million for the year ended December 31, 2016. The Southwest Ontario and North Ontario properties accounted for the majority of the increased revenue in the year following our acquisition of such properties in May 2017. Gaming revenue for the British Columbia and Alberta properties combined experienced strong growth and increased by 4.4% for the year. Slot revenue, excluding the impact of the Southwest Ontario and North Ontario properties for the year ended December 31, 2017, improved by 6.1% over the year ended December 31, 2016, primarily driven by a 9.7% increase in Slot Coin-in.

F&B revenue was $66.0 million for the year ended December 31, 2017, representing an increase of $10.6 million, or 19.1%, when compared to $55.4 million for the year ended December 31, 2016. The increase in F&B revenue was due mainly to additional F&B outlets in the new Cascades Casino Penticton, a full year’s revenue for F&B at the Grand Villa Casino Edmonton and in the new Southwest Ontario and North Ontario properties. The F&B revenue generated in the Ontario Region represented 6.7% of the 19.1% increase for the year.

Hotel revenue was $13.5 million for the year ended December 31, 2017, representing an increase of $1.0 million, or 8.0%, when compared to hotel revenue of $12.5 million for the year ended December 31, 2016. The increase for the year was driven predominantly by higher Average Daily Rate, or ADR, and a higher occupancy rate percentage at our two hotels.

Other revenue, excluding hotel revenue, was $16.3 million for the year ended December 31, 2017, representing an increase of $4.1 million, or 33.6%, compared to $12.2 million for the year ended December 31, 2016. ATM revenue of the Ontario properties accounted for the majority of the increase in other revenue, offset by a $2.8 million accrual for uncollected GST/HST in relation to ATM fees for the period from May 18, 2010 to June 30, 2015, or the tax adjustment for prior periods. See “—Tax Matters—GST/HST Matters” below.

Operating Expenses

Operating expenses were $338.9 million for the year ended December 31, 2017, representing an increase of $107.1 million, or 46.2%, compared to $231.8 million for the year ended December 31, 2016. Excluding the impact of the Southwest Ontario and North Ontario properties, the increase would have been 10.9% due to higher F&B expenses as a result of the expansion of our F&B offering, human resources costs in supporting our continued growth and rent expense of Grand Villa Casino Edmonton being included for the full year.

Interest Expense

Interest expense was $59.6 million for the year ended December 31, 2017, representing an increase of $24.1 million for the year. The higher interest is due to the additional debt incurred in the first quarter of 2017 to fund the acquisitions of the Southwest Ontario and North Ontario properties, the shareholder return of capital and provide additional working capital. See “—Indebtedness” below.

Adjusted EBITDA

Adjusted EBITDA was $144.2 million for the year ended December 31, 2017, representing an increase of $47.9 million, or 49.7%. The increase was driven primarily by the acquired Southwest Ontario and North Ontario properties. During the year, ongoing start-up related challenges at the Grand Villa Casino Edmonton and construction interruptions at the Starlight Casino Edmonton negatively affected the Edmonton segment.

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Loss and comprehensive loss

Loss and comprehensive loss was $65.1 million for the year ended December 31, 2017, representing an increase of $44.6 million in losses, or 218.1%. This reflected the decrease in operating income, increase in depreciation of property and equipment, interest expense and expense on loss on debt extinguishment, partially offset by foreign exchange gain.

Free Cash Flow

Free Cash Flow was $69.4 million for the year ended December 31, 2017, representing an increase of $37.8 million, or 119.6%, compared to $31.6 million for the year ended December 31, 2016. The increase in the year was impacted by: (i) the Adjusted EBITDA from the acquisition of the Southwest Ontario and North Ontario properties and (ii) lower mandatory debt principal repayments as a result of the negotiated debt structure.

Reportable Segments

Operating Results—Detailed Segment Information

The following tables present consolidated revenue and Adjusted Property EBITDA by segment for the years ended December 31, 2017 and 2016.

Grand Villa Casino Burnaby

The following table presents the Grand Villa Casino Burnaby’s results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31,
(In thousands of $)	2017			2016
Gaming	$	78,544		$	74,172
Food and Beverage		14,282			14,229
Hotel, Automated Teller Machines and Other		13,519			12,855
Total Property Revenue		106,345			101,256
Property Operating Expense(1)		59,285			59,039
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		47,060			42,217
Non-cash deferred rent(2)		—			—
Tax adjustment for prior periods(3)		635			—
Adjusted Property EBITDA(1)	$	47,695		$	42,217
Adjusted Property EBITDA Margin(1)		44.8	%		41.7	%
Gaming Statistics(1)
Table Drop (in millions of $)	$	448.4		$	419.0
Table Win %		16.8	%		17.4	%
Slot Coin-in (in millions of $)	$	2,108.2		$	1,880.6
Slot Win %		7.0	%		7.1	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

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(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $106.3 million for the year ended December 31, 2017, representing an increase of $5.0 million, or 5.0%, compared to $101.3 million for the year ended December 31, 2016. During the year, as part of the property’s renovation and gaming expansion, 47 slot machines were added to the floor, contributing to increased slot revenue of $2.6 million, or 8.2%, compared to the year ended December 31, 2016. Despite the grand opening of Parq Vancouver on September 30, 2017, the Grand Villa Casino Burnaby achieved strong slots revenue for the year ended December 31, 2017. Six additional gaming tables and four poker tables were also added in the year, which contributed to an increase in table games revenue of $1.1 million, or 3.4%, compared to the prior year.

F&B revenue was $14.3 million for the year ended December 31, 2017, in line with F&B revenue for the year ended December 31, 2016, due to the incremental revenue from the addition of CHOW and Atlas Restaurant, offset by an accounting adjustment of $0.2 million, or the F&B accounting adjustment. Hotel, ATM and other revenue increased by $0.7 million, or 5.1%, as customers shifted to Vancouver suburbs due to low hotel room vacancy rates in downtown Vancouver. The hotel has also continued to benefit from increased bookings due to its listing on Marriott International, Inc.’s reservation database, which started in the third quarter of 2015. The occupancy rate for the hotel has continued to improve, rising to 83.0% for the year ended December 31, 2017 compared to 82.7% in the prior year. Other revenue for the year was negatively affected by $0.6 million, due to a tax adjustment for prior periods on ATM revenue. See “Tax Matters—GST/HST Matters” below.

Adjusted Property EBITDA

Adjusted Property EBITDA was $47.7 million for the year ended December 31, 2017, representing an increase of $5.5 million, or 13.0%, compared to $42.2 million for the year ended December 31, 2016. The increase was driven by a combination of increased revenues, a reduction in marketing expenses from the Free Play Program of $1.6 million, and the optimization of labor in most departments.

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Cascades Casino Langley

The following table presents the Cascades Casino Langley’s results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31
*(in thousands of $)	2017			2016
Gaming	$	46,280		$	42,345
Food and Beverage		11,467			10,999
Hotel, Automated Teller Machines and Other		4,815			4,507
Total Property Revenue		62,562			57,851
Property Operating Expense(1)		32,436			32,714
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		30,126			25,137
Non-cash deferred rent(2)		—			—
Tax adjustment for prior periods(3)		582			—
Adjusted Property EBITDA(1)	$	30,708		$	25,137
Adjusted Property EBITDA Margin(1)		49.1	%		43.5	%
Gaming statistics(1)
Table Drop (in millions of $)	$	119.3		$	106.2
Table Win %		19.7	%		19.9	%
Slot Coin-in (in millions of $)	$	1,686.9		$	1,463.8
Slot Win %		6.9	%		7.2	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $62.6 million for the year ended December 31, 2017, representing an increase of $4.7 million, or 8.1%, compared to $57.9 million for the year ended December 31, 2016. Slot revenue increased by $2.1 million, or 8.6%, for the year ended December 31, 2017. The increase in slot revenue was attributable to focused marketing strategies for slots and the conversion of a portion of the 50 machines transferred from Playtime Gaming Langley in the prior year to new products, which have significantly stronger performance than the original machines. Table games revenue increased 11.0% for the year ended December 31, 2017. Table Drop increased by 12.3% as a result of focused efforts to develop table game players in the Langley area, including an overall increase in table open hours, as well as successful efforts to grow the customer base for baccarat tables.

F&B revenue was $11.5 million for the year ended December 31, 2017, representing an increase of $0.5 million, or 4.5%, compared to $11.0 million for the year ended December 31, 2016. The increase is primarily due to continued strong sales generated in MATCH and The Buffet restaurants, partially offset by the F&B accounting adjustment of $0.2 million. Hotel, ATM and other revenue increased by $0.3 million, or 6.8%, due to increased online marketing promotions as well as tour group and hotel package sales.

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Adjusted Property EBITDA

Adjusted Property EBITDA was $30.7 million for the year ended December 31, 2017, an increase of $5.6 million, or 22.3%, compared to $25.1 million for the year ended December 31, 2016. The increase was driven by a combination of multiple factors, including lower human resources costs resulting from optimization, reduced operating costs and a reduction in marketing expenses in relation to the implementation of changes to the BCLC’s Free Play Program. The impact of the Free Play Program was $1.2 million for the year.

Starlight Casino New Westminster

The following tables present the Starlight Casino New Westminster’s results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31,
(in thousands of $)	2017			2016
Gaming	$	44,112		$	44,638
Food and Beverage		7,200			6,905
Automated Teller Machines and Other		1,840			2,016
Total Property Revenue	$	53,152		$	53,559
Property Operating Expense(1)		34,076			36,311
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		19,076			17,248
Non-cash deferred rent(2)		—			—
Tax adjustment for prior periods(3)		457			—
Adjusted Property EBITDA(1)	$	19,533		$	17,248
Adjusted Property EBITDA Margin(1)		36.7	%		32.2	%
Gaming statistics(1)
Table Drop (in millions of $)	$	216.5		$	274.7
Table Win %		18.1	%		16.1	%
Slot Coin-in (in millions of $)	$	1,270.7		$	1,140.0
Slot Win %		7.4	%		7.5	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $53.2 million for the year ended December 31, 2017, representing a decrease of $0.4 million, or 0.8%, compared to $53.6 million for the year ended December 31, 2016. The decrease was due primarily to higher F&B revenue and higher slot revenue, offset by lower table games revenue and lower ATM and other revenue. Slots revenue experienced an improvement of 7.8% in the year due to a focus on customer engagement, increasing site visitation through F&B incentives and targeted marketing to our customers. Table games revenue declined by 12.0% when compared to the prior year due largely to the fact that the prior year’s revenue included the play of a small group of high-limit players that did not return for the year ended December 31, 2017.

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F&B revenue was $7.2 million for the year ended December 31, 2017, representing an increase of $0.3 million, or 4.3%, compared to $6.9 million for the year ended December 31, 2016. The increase was due to improved integration of the casino, F&B and live entertainment offerings being offset by the F&B accounting adjustment of $0.1 million.

Adjusted Property EBITDA

Adjusted Property EBITDA was $19.5 million for the year ended December 31, 2017, representing an increase of $2.3 million, or 13.4%, compared to $17.2 million for the year ended December 31, 2016. The increase was a result of several factors, including an increase of 0.8% in revenue and a decrease in property operating expenses of 6.2%. Savings in operating expenses were achieved through human resources cost optimization, reduced operating costs and a $1.2 million reduction in marketing expenses from the Free Play Program.

Thompson-Okanagan Region

The following table presents the Thompson-Okanagan casinos’ results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31,
(in thousands of $)	2017			2016
Revenue
Gaming	$	45,071		$	42,417
Food and Beverage		14,269			10,920
Automated Teller Machines and Other		1,721			2,107
Total Property Revenue		61,061			55,444
Property Operating Expense(1)		48,166			41,440
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		12,895			14,004
Non-cash deferred rent(2)		109			—
Tax adjustment for prior periods(3)		688			—
Adjusted Property EBITDA(1)	$	13,692		$	14,004
Adjusted Property EBITDA Margin(1)		22.4	%		25.3	%
Gaming statistics(1)
Table Drop (in millions of $)	$	61.6		$	57.1
Table Win %		21.5	%		19.8	%
Slot Coin-in (in millions of $)	$	1,940.8		$	1,783.8
Slot Win %		7.1	%		7.1	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $61.1 million for the year ended December 31, 2017, representing an increase of $5.7 million, or 10.1%, compared to $55.4 million for the year ended December 31, 2016. The year ended December 31, 2017

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marked the successful launch of the Cascades Casino Penticton on April 5, 2017 that replaced the Lake City Casino Penticton. Despite this increase, the segment was adversely impacted by a series of natural events that had an adverse impact on tourism in the region for the year ended December 31, 2017. The region experienced severe and unseasonable winter conditions in the first quarter of 2017 whereby Kamloops experienced 20 additional snow days as compared to 10 snow days in the first quarter of 2016. Extensive flooding occurred in May and June of 2017 and the region experienced extensive forest fires in central British Columbia in July and August 2017, which spread thick smoke throughout the Thompson-Okanagan Region. This negatively affected tourism and the local economies in which these properties operate.

Gaming revenue was $45.1 million for the year ended December 31, 2017, representing an increase of $2.7 million, or 6.3%, to $42.4 million for the year ended December 31, 2016, driven by improvement in slots and tables revenue. Slots revenue increased $1.6 million, or 5.2%, driven largely by the growth from Cascades Casino Penticton. Table games revenue increased by $0.6 million, or 10.1%, due primarily to continued efforts and success in the development of mid-level players at Lake City Casino Kelowna.

F&B revenue was $14.3 million for the year ended December 31, 2017, representing an increase of $3.4 million, or 31.2%, to $10.9 million for the year ended December 31, 2016. The increase was attributable partially to additional F&B offerings at Cascades Casino Penticton. However, in July and August 2017, the smoke from the aforementioned forest fires restricted our ability to utilize our outdoor patios, which negatively affected customer visitation during the summer patio season. ATM and other revenue decreased by $0.4 million, or 18.2%, due to the tax adjustment for prior periods on ATM revenue. See “Tax Matters—GST/HST Matters” below.

Adjusted Property EBITDA

Despite improvements in gaming performance, Adjusted Property EBITDA declined to $13.7 million for the year ended December 31, 2017, a decrease of $0.3 million, or 2.1%, compared to $14.0 million for the year ended December 31, 2016. The decrease was due to overall increased human resources costs, operating expenses and higher marketing and promotion costs incurred to drive patron attendance at our facilities to counter the impact of the severe weather conditions. The financial impact resulting from these negative factors were partially negated by a $1.7 million reduction in marketing expenses from the impact of the Free Play Program.

Edmonton Region

The following tables present the Edmonton casinos’ results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31,
(in thousands of $)	2017			2016
Revenue
Gaming	$	20,835		$	20,600
Food and Beverage		9,128			6,594
Automated Teller Machines and Other		1,075			1,227
Total Property Revenue		31,038			28,421
Property Operating Expense(1)		38,738			27,951
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		(7,700	)		470
Non-cash deferred rent(2)		1,385			—
Tax adjustment for prior periods(3)		304			—
Adjusted Property EBITDA(1)	$	(6,011	)	$	470
Adjusted Property EBITDA Margin(1)		(19.4	%)		1.7	%

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	Year ended December 31,
(in thousands of $)	2017			2016
Gaming statistics(1)
Table Drop (in millions of $)	$	136.7		$	124.6
Table Win %		15.6	%		15.6	%
Slot Coin-in (in millions of $)	$	881.8		$	946.9
Slot Win %		7.7	%		7.6	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $31.0 million for the year ended December 31, 2017, representing an increase of $2.6 million, or 9.2%, compared to $28.4 million for the year ended December 31, 2016. The Grand Villa Casino Edmonton opened on September 7, 2016, which replaced Baccarat Casino, increasing revenue by $5.4 million, or 46.0%, for the year. The increase was driven mostly by table games revenue and F&B revenue, which grew by 50.8% and 72.8%, respectively. Slots revenue had a modest increase of 8.6%. Despite on-going improvements in all revenue streams, the Grand Villa Casino Edmonton continued to face start-up challenges during the year ended December 31, 2017, which affected the performance of the facility.

Revenue at the Palace Casino Edmonton (now the Starlight Casino Edmonton) has been adversely affected since the first quarter of 2016 due to demolition work related to the planned expansion. Construction work on the expansion, which commenced in May 2017, reduced the gaming space by approximately 40%. As a result, this gaming property has continued to lose a significant number of its customers. Management has optimized the game offerings and related costs to minimize the overall impact of construction. Revenue at the Palace Casino Edmonton (now the Starlight Casino Edmonton) was $13.8 million for the year ended December 31, 2017, representing a decrease of $2.8 million, or 16.9%, compared to $16.6 million for the year ended December 31, 2016.

F&B revenue was $9.1 million for the year ended December 31, 2017, representing an increase $2.5 million, or 37.9%, compared to $6.6 million for the year ended December 31, 2016, attributable to the additional offerings at the Grand Villa Casino Edmonton, partially offset by lower F&B revenue at the Palace Casino Edmonton (now the Starlight Casino Edmonton). The tax adjustment for prior periods on ATM revenue negatively affected other revenue by $0.3 million for the year ended December 31, 2017. See “Tax Matters—GST/HST Matters” below.

Adjusted Property EBITDA

Adjusted Property EBITDA was a loss of $6.0 million for the year ended December 31, 2017, representing a decrease of $6.5 million. The loss was due to the start-up issues and on-going losses at the Grand Villa Casino Edmonton and, to a lesser extent, the renovations and construction disrupting the operations at Palace Casino Edmonton (now the Starlight Casino Edmonton).

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Ontario Region

The following table presents the Southwest Ontario and North Ontario properties’ results of operations for the year ended December 31, 2017. The year ended December 31, 2017 represents the period beginning from the time of closing of the acquisitions of the Southwest Ontario and North Ontario properties, respectively, and ending on December 31, 2017.

(in thousands of $)	Year ended December 31, 2017
Revenue
Gaming	$	124,049
Food and Beverage		3,698
Automated Teller Machines and Other		4,975
Total Property Revenue		132,722
Property Operating Expense(1)		81,878
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		50,844
Adjusted Property EBITDA(1)	$	50,844
Adjusted Property EBITDA Margin(1)		38.3	%
Gaming statistics(1)
Table Drop (in millions of $)	$	21.8
Table Win %		20.1	%
Slot Coin-in (in millions of $)	$	2,844.1
Slot Win %		8.2	%

Note:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

Revenue

Revenue was $132.7 million for the year ended December 31, 2017. The financial results for the year ended December 31, 2017 reflect the operations of the Southwest Ontario properties from its acquisition on May 9, 2017 and the North Ontario properties from its acquisition on May 30, 2017. Prior to closing the acquisitions, we, in conjunction with the OLG, initiated a marketing campaign targeting the entire inherited database to promote increased patronage and additional visitation after closing. In addition, we implemented the first phase of our marketing and loyalty program and saw strong preliminary results. Gaming revenue was $124.0 million for the year ended December 31, 2017, due to the implementation of continued revenue improvement initiatives, including increased table games limits, and the introduction of new slot offerings to our customers.

Adjusted Property EBITDA

Adjusted Property EBITDA was $50.8 million for the year ended December 31, 2017. The Adjusted Property EBITDA Margin was 38.3%, which was noticeably higher than our average of 30.1% for the year. The financial results for this region were positively impacted by a strong focus on labor management through the implementation of a disciplined process for vacancy management enabling the effective management of labor costs.

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CGCs

The following tables present the CGCs’ results of operations for the years ended December 31, 2017 and 2016.

	Year ended December 31,
(In thousands of $)	2017			2016
Revenue
Gaming	$	24,178		$	23,877
Food and Beverage		5,931			5,762
Automated Teller Machines and Other		1,778			1,787
Total Property Revenue		31,887			31,426
Property Operating Expense(1)		19,330			19,643
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		12,557			11,783
Non-cash deferred rent(2)		10			—
Tax adjustment for prior periods(3)		87			—
Adjusted Property EBITDA(1)	$	12,654		$	11,783
Adjusted Property EBITDA Margin(1)		39.7	%		37.5	%
Gaming Statistics(1)
Slot Coin-in (in millions of $)	$	1,003.7		$	893.3
Slot Win %		7.2	%		7.4	%

Notes:    (1) For more information about these non-IFRS measures, see the “Non-IFRS Financial Measures” section in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Presentation of Financial Matters and Other Information—Non-IFRS Financial Measures” section in the prospectus.

(2) 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. The adjustment removes the non-cash portion of rental expense.

(3) Represents tax adjustments related to GST/HST of automated teller machine, or ATM, fees for fiscal year 2010 to 2015 accrued for in the third quarter of 2017. See “Income Tax Matters” below.

Revenue

Revenue was $31.9 million for the year ended December 31, 2017, representing an increase of $0.5 million, or 1.5%, compared to $31.4 million for the year ended December 31, 2016. The results for the year ended December 31, 2016 included nine additional days of operations for the Playtime Gaming Group from its acquisition on December 23, 2015. Excluding these additional days of operations from 2016, the CGC group’s revenue would have increased by 4.9% for the year. The year ended December 31, 2017 was also negatively impacted by unusual winter weather conditions in the first quarter of 2017, with significantly more snow days both in the Lower Mainland and on Vancouver Island, as compared to the prior year. The closure of the Penticton Bingo Palace on March 4, 2017, in anticipation of the opening of Cascades Casino Penticton, resulted in a revenue decrease of $0.6 million for the year.

Gaming revenue, which is comprised mainly of slots revenue, increased by $0.3 million, or 1.3%, for the year ended December 31, 2017. Slot Coin-in increased 12.4% for the year attributable to the implementation of our marketing and promotion activities, which resulted in a significant increase in carded play and a higher spend per patron.

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Adjusted Property EBITDA

Adjusted Property EBITDA was $12.7 million for the year ended December 31, 2017, representing an increase of $0.9 million, or 7.4% compared to the year ended December 31, 2016. The increase was due primarily to reduced marketing expense from the Free Play Program of $0.8 million for the year ended December 31, 2017.

Corporate

The Corporate segment relates to the head office in Burnaby, British Columbia and regional offices in Kelowna, British Columbia, Edmonton, Alberta and London, Ontario. Corporate costs increased for the year ended December 31, 2017 due to the leasing of additional office spaces in Burnaby, Edmonton and London, and higher human resource and administration costs to support our growth and our expansion into Ontario, specifically. Corporate costs as a percentage of total revenue were roughly consistent across periods.

	Year ended December 31,
(in thousands of $)	2017			2016
Corporate revenue	$	54		$	208
Corporate costs		24,963			14,732
Corporate costs (net of corporate revenue)	$	24,909		$	14,524
% of revenue		5.2	%		4.4	%

Year ended December 31, 2016 compared to year ended December 31, 2015

The following section provides an overview of our financial performance for the year ended December 31, 2016 compared to the year ended December 31, 2015.

Revenue

Revenue was $328.2 million for the year ended December 31, 2016, representing an increase of $38.3 million, or 13.2%, compared to $289.9 million for the year ended December 31, 2015.

Gaming revenue was $248.0 million for the year ended December 31, 2016, representing an increase of $22.6 million, or 10.0%, compared to $225.4 million for the year ended December 31, 2015. Slot revenue, excluding the impact of the Playtime Gaming Group, improved by 4.2% year on year mainly as a result of the implementation of a focused and effective marketing campaign to drive Slot Coin-in. Slot revenue also increased in the Thompson-Okanagan Region, reflecting the fact that the Cascades Casino Kamloops had been open for its first full year in 2016. The Playtime Gaming Group’s slot and bingo revenue was $15.1 million in the year ended December 31, 2016, which exceeded internal performance expectations. Table games revenue declined by 2.1%, driven mainly by a lower Table Win % of 17.3%, which was down from 18.9% in the previous year and the expected normalized Table Win % of 18.0%.

F&B revenue was $55.4 million for the year ended December 31, 2016, representing an increase of $12.6 million, or 29.4%, compared to $42.8 million for the year ended December 31, 2015. The increase was mainly attributable to the new additional F&B outlets in the Grand Villa Casino Edmonton, which opened on September 7, 2016. The Cascades Casino Kamloops also contributed a full year of F&B revenue from its restaurants. Most of the our other casinos also contributed to the increase in F&B revenue.

Hotel revenue was $12.5 million for the year ended December 31, 2016, representing an increase of $1.0 million, or 8.7%, compared to $11.5 million for the year ended December 31, 2015 due to higher ADR and a higher occupancy rate percentage in the Company’s two hotels. We improved on both of these metrics due to a high demand for hotel space in Vancouver, which has led to an increase in demand and pricing in adjacent centres.

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Despite favorable revenue trends, unseasonable and severe winter weather conditions in BC made it difficult for patrons to visit Gateway’s properties in the Greater Vancouver region in 2016. In December 2016, there were six separate snow falls, often occurring on a weekend, compared to nil in December 2015. Management estimates that the negative overall EBITDA impact of this anomaly to be in the range of $1.2 million to $1.6 million.

Operating Expenses

Operating Expenses were $231.8 million for the year ended December 31, 2016, representing an increase of $29.6 million, or 14.6%, compared to $202.2 million for the year ended December 31, 2015. Excluding the impact of the Playtime Gaming Group, the increase would have been 7.6% as compared to the same prior year period. Occupancy costs increased in 2016 due to the higher rent incurred at the new Grand Villa Casino Edmonton location, the leasing of additional office space in the Burnaby and Edmonton head office locations and leasing of the Newton Community Gaming Centre in the second quarter of 2016.

Interest Expense

Interest expense was $35.5 million for the year ended December 31, 2016, representing an increase of $1.3 million, or 3.8%, compared to $34.2 million for the year ended December 31, 2015. The increase was due to additional debt that was incurred in the fourth quarter of 2015 to fund the acquisition of the Playtime Gaming Group.

Adjusted EBITDA

Adjusted EBITDA was $96.3 million for the year ended December 31, 2016, representing an increase of $8.6 million, or 9.8%, compared to $87.7 million for the year ended December 31, 2015. The increase was due mainly to a full year’s worth of operations from the Playtime Gaming Group.

Free Cash Flow

Free Cash Flow was $31.6 million for the year ended December 31, 2016 representing a decrease of $1.9 million or 5.7% compared to $33.5 million for the year ended December 31, 2015. Free cash flow was negatively impacted by an increase in mandatory debt principal repayments of $9.8 million as well as an increase in interest expense of $1.3 million.

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Reportable Segments

Operating Results—Detailed Segment Information

The following table presents consolidated revenue and Adjusted Property EBITDA by segment for the years ended December 31, 2016 and 2015.

Grand Villa Casino Burnaby

The following table presents the Grand Villa Casino Burnaby’s results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	74,172		$	74,397
Food and Beverage		14,229			13,058
Hotel, Automated Teller Machines and Other		12,855			11,956
Total Property Revenue		101,256			99,411
Property Expense(1)		59,039			57,309
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		42,217			42,102
Adjusted Property EBITDA(1)	$	42,217		$	42,102
Adjusted Property EBITDA Margin(1)		41.7	%		42.4	%
Gaming Statistics(1)
Table Drop (in millions of $)	$	419.0		$	419.3
Table Win %		17.4	%		19.2	%
Slot Coin-in (in millions of $)	$	1,880.6		$	1,714.6
Slot Win %		7.1	%		7.3	%

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

Revenue

Revenue was $101.3 million for the year ended December 31, 2016, representing an increase of $1.9 million, or 1.9%, compared to $99.4 million for the year ended December 31, 2015. Gaming revenue declined by $0.2 million, or 0.3%, compared to the same prior year period largely due to the loss in high-limit table play in 2016 due primarily to the additional conditions imposed by the BCLC in 2015 for certain high-limit players in British Columbia to demonstrate the source of funds used to purchase chips, or the “2015 BCLC Conditions”.

F&B revenue increased by 9.0% compared to the prior year period due to the addition of the Alpina Bar in August 2016, adding entertainment offerings at the Personas + Patio + Restaurant + Lounge and implementing a menu refresh. Hotel, ATM and other revenue increased by 7.5% compared to the prior year period driven by an increase in the hotel occupancy rate and ADR, resulting from the hotel compression in the downtown Vancouver core. During the third quarter of 2015, the Delta Burnaby hotel became available on Marriott’s reservation database, which also contributed to the increase in occupancy and ADR for the year ended December 31, 2016.

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Adjusted Property EBITDA

Adjusted Property EBITDA was $42.2 million for the year ended December 31, 2016, representing an increase of $0.1 million, or 0.2%, compared to $42.1 million for the year ended December 31, 2015. The increase was largely driven by the improvement in F&B margins from the menu refresh and from efficient spending on marketing and promotional programs that generated a higher return-on-investment.

Cascades Casino Langley

The following table presents the Cascades Casino Langley’s results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	42,345		$	39,518
Food and Beverage		10,999			9,447
Hotel, Automated Teller Machines and Other		4,507			4,143
Total Property Revenue		57,851			53,108
Property Expense(1)		32,714			31,408
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		25,137			21,700
Adjusted Property EBITDA(1)	$	25,137		$	21,700
Adjusted Property EBITDA Margin(1)		43.5	%		40.9	%
Gaming Statistics(1)
Table Drop (in millions of $)	$	106.2		$	102.4
Table Win %		19.9	%		20.9	%
Slot Coin-in (in millions of $)	$	1,463.8		$	1,334.1
Slot Win %		7.2	%		7.4	%

Note:    (1) For more information about these Non-IFRS measures, see the “Non-IFRS Financial Measures” section in this MD&A.

Revenue

Revenue was $57.9 million for the year ended December 31, 2016, representing an increase of $4.8 million, or 9.0%, compared to $53.1 million for the year ended December 31, 2015. Gaming revenue increased by $2.8 million, or 7.1%, compared to the prior year period. Table games and slots revenue increased by 9.7% and 6.4%, respectively, as compared to the prior year period. The increase in table games revenue was due to focused efforts to develop the table games market in the region and realizing the full year benefit of four table games that were added in the third quarter of 2015. The increase in slots revenue was due to the continuation of focused marketing strategies.

F&B revenue improved by 16.4% compared to the prior year period due to continued sales momentum generated in the MATCH and The Buffet restaurants. Hotel, ATM and other revenue has seen consistent revenue growth due to increased online marketing and promotions, as well as more active catering to Asian tour groups.

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Adjusted Property EBITDA

Adjusted Property EBITDA was $25.1 million for the year ended December 31, 2016, an increase of $3.4 million, or 15.7%, compared to $21.7 million for the year ended December 31, 2015. The increase was due mainly to revenue growth coupled with optimizing labor in gaming departments and an improvement in F&B margins.

Starlight Casino New Westminster

The following tables present the Starlight Casino New Westminster’s results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	44,638		$	41,733
Food and Beverage		6,905			5,727
Automated Teller Machines and Other		2,016			1,862
Total Property Revenue		53,559			49,322
Property Expense(1)		36,311			33,900
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		17,248			15,422
Adjusted Property EBITDA(1)	$	17,248		$	15,422
Adjusted Property EBITDA Margin(1)		32.2	%		31.3	%
Gaming statistics(1)
Table Drop (in millions of $)	$	274.7		$	208.8
Table Win %		16.1	%		19.5	%
Slot Coin-in (in millions of $)	$	1,140.0		$	1,092.8
Slot Win %		7.5	%		7.4	%

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

Revenue

Revenue was $53.6 million for the year ended December 31, 2016, representing an increase of $4.3 million, or 8.7%, compared to $49.3 million for the year ended December 31, 2015. Gaming revenue increased by $2.9 million, or 7.0%, compared to the prior year period due to the growth of both table games and slot revenue by 9.8% and 4.7%, respectively. Table games revenue increased due to the redirection of marketing and promotional efforts to mid-tier and low-tier customers stemming from the BCLC Conditions. Despite the conditions, the gaming facility was able to increase high-limit table play through its high-limit customer relationships. Slot revenue increased as a result of the implementation of a focused and effective marketing campaign to drive Slot Coin-in. F&B revenue increased by 20.6% as compared to the same prior year period due to a full year of operations of the Red Bar Lounge, additional entertainment offerings at the MATCH and implementing a menu refresh.

Adjusted Property EBITDA

Adjusted Property EBITDA was $17.2 million for the year ended December 31, 2016, representing an increase of $1.8 million, or 11.7%, compared to $15.4 million for the year ended December 31, 2015. The increase was due to the revenue growth noted above, coupled with the optimization of labor in the gaming departments and an improvement in F&B margins.

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Thompson-Okanagan Region

The following table presents the Thompson-Okanagan casinos’ results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	42,417		$	40,547
Food and Beverage		10,920			7,913
Hotel, Automated Teller Machines and Other		2,107			2,028
Total Property Revenue		55,444			50,488
Property Expense(1)		41,440			37,019
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		14,004			13,469
Adjusted Property EBITDA(1)	$	14,004		$	13,469
Adjusted Property EBITDA Margin(1)		25.3	%		26.7	%
Gaming statistics(1)
Table Drop (in millions of $)	$	57.1		$	49.6
Table Win %		19.8	%		20.8	%
Slot Coin-in (in millions of $)	$	1,783.8		$	1,722.5
Slot Win %		7.1	%		7.2	%

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

Revenue

Revenue was $55.4 million for the year ended December 31, 2016, representing an increase of $4.9 million, or 9.7%, compared to $50.5 million for the year ended December 31, 2015. Gaming revenue increased by $1.9 million, or 4.6%, compared to the prior year period driven by table game and slot revenue growth of 13.2% and 2.3%, respectively. A significant portion of the year-over-year growth came from having a full year of operations from the Cascades Casino Kamloops. The Lake City Casino Vernon also experienced strong growth due to an increased number of high value players. F&B revenue grew by 38.0% as compared to the prior year period driven by the full year of operations at the Cascades Casino Kamloops, which included a MATCH, Atlas and The Buffet.

Adjusted Property EBITDA

Adjusted Property EBITDA was $14.0 million for the year ended December 31, 2016, representing an increase of $0.5 million, or 3.7%, compared to $13.5 million for the year ended December 31, 2015. The increase was driven by the revenue growth noted above and was partially offset by start-up inefficiencies at the Cascades Casino Kamloops that were resolved in the latter part of 2016.

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Edmonton Region

The following tables present the Edmonton casinos’ results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	20,600		$	23,768
Food and Beverage		6,594			4,759
Automated Teller Machines and Other		1,227			1,205
Total Property Revenue		28,421			29,732
Property Expense(1)		27,951			24,894
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		470			4,838
Adjusted Property EBITDA(1)	$	470		$	4,838
Adjusted Property EBITDA Margin(1)		1.7	%		16.3	%
Gaming statistics(1)
Table Drop (in millions of $)	$	124.6		$	160.0
Table Win %		15.6	%		15.4	%
Slot Coin-in (in millions of $)	$	946.9		$	984.4
Slot Win %		7.6	%		7.6	%

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

Revenue

Revenue was $28.4 million for the year ended December 31, 2016, representing a decrease of $1.3 million, or 4.4%, compared to $29.7 million for the year ended December 31, 2015. Gaming revenue declined by $3.2 million, or 13.3%, compared to the same prior year period. The Baccarat Casino’s operations were impacted by construction activities of the neighboring ICE District development from the beginning of 2016 to the date the gaming property was closed on August 31, 2016. On September 7, 2016, the Grand Villa Casino Edmonton opened, which replaced the Baccarat Casino. Revenue at the Grand Villa Casino Edmonton for the fourth quarter of 2016 was 103.8% greater than revenue at the Baccarat Casino for the fourth quarter of 2015.

Construction activities commenced at the Palace Casino Edmonton (now the Starlight Casino Edmonton) site in the first quarter of 2016 as part of the Company’s expansion plans. The disruption adversely impacted operations, which led to declines in gaming revenue of 13.9% for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The decline was notable for table games as the high-limit gaming area was closed due to demolition activities. Cost reduction efforts were also implemented throughout 2016, which focused on optimizing table game labor hours and overhead costs during construction activities for the expansion plan.

Adjusted Property EBITDA

Adjusted Property EBITDA was $0.5 million for the year ended December 31, 2016, representing a decrease of $4.4 million, compared to $4.8 million for the year ended December 31, 2015. The significant decrease compared to the same prior year period was due to losses at the Baccarat Casino and the Grand Villa Casino Edmonton for the reasons described above.

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CGCs

The following tables present the CGCs’ results of operations for the years ended December 31, 2016 and 2015.

	Year ended December 31,
(In thousands of $)	2016			2015
Revenue
Gaming	$	23,877		$	5,419
Food and Beverage		5,762			1,866
Automated Teller Machines and Other		1,787			339
Total Property Revenue		31,426			7,624
Property Expense(1)		19,643			6,371
Property earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses		11,783			1,253
Adjusted Property EBITDA(1)	$	11,783		$	1,253
Adjusted Property EBITDA Margin(1)		37.5	%		16.4	%
Gaming statistics(1)
Slot Coin-in (in millions of $)	$	893.3		$	191.0
Slot Win %		7.4	%		7.6	%

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

Revenue

Revenue was $31.4 million for the year ended December 31, 2016, representing an increase of $23.8 million, compared to $7.6 million for the year ended December 31, 2015. The significant increase was due to the inclusion of Playtime Gaming Group’s operating results following its acquisition in December 2015. Operating results exceeded expectations due to the implementation of a number of operational improvements, which included the optimization of gaming floor layouts, improvements and efficiencies in gaming operations, implementation of Gateway’s marketing and promotion activities and the relocation of 50 slot machines from the Playtime Gaming Langley to Cascades Casinos Langley. Excluding the Playtime Gaming Group, revenue increased by 7.2% compared to same prior year period. This increase was due mainly to the slot business growth at Chances Mission property as a result of continued momentum in the higher denomination slot business, as well as strong population growth in Mission.

Adjusted Property EBITDA

Adjusted Property EBITDA was $11.8 million for the year ended December 31, 2016, representing an increase of $10.5 million, compared to $1.3 million for the year ended December 31, 2015. Excluding the impact of the Playtime Gaming Group, Adjusted Property EBITDA was relatively flat in 2016 compared to 2015. As noted above, strong performance at the Chances Mission property was offset by a lower EBITDA contribution from the Newton Community Gaming Centre property after the sale-and-leaseback transaction in the first quarter of 2016.

Corporate

The Corporate segment relates to the head office in Burnaby, BC and regional offices in Kelowna, BC, Edmonton, Alberta and London, Ontario. Corporate costs have increased from 2015 to 2016 due to higher human resources, information technology and administration costs to support revenue growth.

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	Year ended December 31,
(In thousands of $)	2016			2015
Corporate revenue	$	208		$	242
Corporate costs		14,732			11,345
Corporate costs (net of corporate revenue)		14,524			11,103
% of revenue		4.4	%		3.8	%

Financial Condition, Liquidity and Capital Resources

Overview

We principally use cash flow from operations to fund operating expenses, debt service requirements and capital expenditures, including growth initiatives but excluding major acquisitions. However, our ability to fund operating expenses, capital expenditures and future debt service requirements will depend on, among other things, our future operating performance, which will be affected by general economic, financial and other factors, including factors beyond our control. See “Risk Factors” in this prospectus.

Cash Flows

The following table provides a summary of our consolidated cash flows for the years ended December 31, 2017, 2016 and 2015 and the nine months ended September 30, 2018 and 2017.

	Nine months ended September 30,						Year ended December 31,
(in thousands of $)	2018			2017			2017			2016			2015
Net Cash generated from operating activities	$	70,475		$	82,040		$	106,246		$	95,444		$	92,821
Net Cash (used for) investing activities		306,930			(199,698	)		(216,828	)		(19,702	)		(117,255	)
Net Cash (used for) generated from financing activities		(264,223	)		201,971			170,514			(69,139	)		33,191
Net change in cash and cash equivalents	$	113,182		$	84,313		$	59,932		$	6,603		$	8,757
Cash and cash equivalents	$	210,567		$	121,766		$	97,385		$	37,453		$	30,850

Our primary source of liquidity is cash flow from operations. Details of net cash generated from operating, investing and financing activities are presented in the Statement of Cash Flows of the Financial Statements.

Analysis of cash flows for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017

Net cash generated from operating activities for the nine months ended September 30, 2018 was lower due mainly to additional expenses incurred due to increased occupancy costs at the SLB Properties when compared to the same period in 2017.

Net cash from investing activities in the nine months ended September 30, 2018 increased, when compared to the same period in 2017, was higher due mainly to the proceeds from the Sale and Leaseback Transactions, partially offset by investment in growth capital projects.

Net cash used for financing activities during the nine months ended September 30, 2018 was due mainly to the repayment of debt and return of capital to shareholders in the first quarter of 2018.

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Analysis of cash flows for the year ended December 31, 2017 compared to the year ended December 31, 2016

Net cash generated from operating activities was higher for the year ended December 31, 2017 when compared to the year ended December 31, 2016 due to the operations of the Ontario properties, acquired in May 2017.

Net cash used for investing activities for the year ended December 31, 2017 was higher when compared to the year ended December 31, 2016 due mainly to the acquisition of the North and Southwest Bundles, investment in maintenance and investment in growth capital projects, and offset by proceeds from the sale of property and equipment of $7.5 million.

Net cash generated from financing activities was higher for the year ended December 31, 2017 due mainly to the refinancing of our secured debt in 2017, or the 2017 Refinancing, less the return of capital to the shareholders. Pertinent details regarding the 2017 Refinancing are discussed further in the “Indebtedness” section below.

Analysis of Cash Flows for the year ended December 31, 2016 compared to the year ended December 31, 2015

Net cash generated from operating activities was higher for the year ended December 31, 2016 when compared to the year ended December 31, 2015 partially due to the full year inclusion of the Playtime Gaming Group which was acquired in December 2015.

Net cash used for investing activities included significant maintenance and growth capital projects. Pertinent details of growth capital expenditures are discussed further in the “Capital Expenditures” section below. Other major transactions that affected investing activities were the proceeds from the sale of property and equipment of $35.8 million for the year ended December 31, 2016 and the acquisition of the Playtime Gaming Group for $68.6 million in 2015.

Net cash used for financing activities was higher for the year ended December 31, 2016 when compared to 2015 due mainly to the following: higher principal and interest payments on long-term debt due to additional debt incurred in 2015 for the acquisition of the Playtime Gaming Group; repayment of amounts owing on the revolving credit facility; and payment of deferred consideration in connection with the acquisition of the Playtime Gaming Group.

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) which we refer to collectively as the SLB Properties, for $503.6 million, subject to certain customary adjustments, and the leaseback of the SLB Properties to us, which we refer to collectively as the Sale and Leaseback Transactions. The Sale and Leaseback Transactions closed on March 12, 2018. Under the Sale and Leaseback Transactions, certain of our subsidiaries entered into long-term leases, as tenants, for each of the SLB Properties. We will continue to provide operational services for the casinos under such leases in the ordinary course. We anticipate that the Sale and Leaseback Transactions will enhance liquidity and increase our future financial flexibility. From the net proceeds of the Sale and Leaseback Transactions, $2.0 million was used to repay in full the mortgage on the land adjacent to the Cascades Casino Langley and $490.6 million was used to repay loans under our 2017 Senior Secured Credit Facility.

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Indebtedness

Where cash flow from operations is not sufficient to fund investing activities, we rely on our credit facilities. Following the 2017 Refinancing, our new debt structure included a revolver in an aggregate principal amount of $125.0 million (with a sublimit of US$25.0 million available in US dollars), or the Revolver, a US Term Facility, a Canadian Term Facility and the US$255.0 million 8.25% Second Priority Senior Secured Notes, or the 8.25% Notes. Total transaction costs incurred related to the 2017 Refinancing were $27.7 million.

Outstanding debt amounts as at September 30, 2018, December 31, 2017 and December 31, 2016 were as follows:

	As at September 30,		As at December 31,		As at December 31,
(in thousands of $)	2018		2017		2016
Term loans
Term Loan B (US$438,900)	$	574,127		—		—
Term Loan B-1 (US$402,975)		—	$	505,532		—
Term Loan B-2		—		79,600		—
Term Loan A		—		—	$	192,250
Term Loan B-1		—		—		116,400
Revolving Credit Facility		—		45,000		20,590
Swingline Facility (b)		—		—		5,000
	$	574,127		630,132		334,240
Langley mortgage		—		2,016		2,073
Vernon mortgage		3,793		3,942		4,133
8.25% Second Priority Senior Secured Notes (US$255,000)		330,098		319,898		—
8.50% Second Priority Senior Secured Notes		—		—		200,000
Total debt	$	908,018	$	955,988	$	540,446

The complete terms of the refinanced Revolver, US Term Facility, Canadian Term Facility and 8.25% Notes are outlined in Note 14 of the Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements. A summary of the terms is provided under the heading “Description of Indebtedness” in this prospectus.

The US Term Facility, Canadian Term Facility and Revolving Credit Facility include a total net leverage ratio covenant. As of September 30, 2018, we are in compliance with this covenant.

On February 22, 2017, we repaid and discharged all outstanding amounts under our previous term loan facilities, revolving credit facility and swingline facility, and redeemed the 8.50% notes due in 2020 in the aggregate principal amount of $200.0 million, or the 8.50% Notes, at a redemption price of 104.25% plus accrued and unpaid interest, collectively, the 2017 Refinancing. The remaining balance of the unamortized deferred transaction costs, the embedded derivative and premium on long-term debt related to the previous debt of $7.6 million was written off due to the extinguishment of debt.

As part of the 2017 Refinancing, our shareholders authorized a $131.7 million (US$100.0 million) share capital reduction, which was paid out to the shareholders on February 22, 2017. The remaining funds from the 2017 Refinancing were designated to fund the acquisitions of the Southwest Ontario and North Ontario properties and to fund a portion of our planned growth capital for 2017.

On March 13, 2018, or the 2018 Refinancing Date, we completed the 2018 Refinancing. The 2018 Senior Secured Credit Facility consists of a US$335.0 million first lien secured term loan facility, or the New Term Loan, and an up to $150.0 million senior secured revolving credit facility, or the New Revolver. The transaction costs incurred related to the refinancing were $8.1 million.

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On July 16, 2018, we amended the 2018 Senior Secured Credit Facility to increase the first lien secured term loan facility by US$105.0 million to US$440.0 million. The transaction costs incurred related to the credit amendment were $2.6 million.

The New Term Loan and New Revolver will mature on March 2025 and March 2023, respectively. Effective beginning in the third quarter of 2018, we are required to make quarterly installment payments on the New Term Loan equal to 0.25% of the original principal amount. The interest rate on the New Revolver will range between 300 and 325 basis points above the Canadian Dollar Offered Rate, or CDOR. The interest rate on the New Term Loan is 300 basis points above Base Rate loans. Base rate loans bear interest equal to the highest of the Federal Fund Effective Rate, Prime Rate or the Adjusted LIBOR plus 1.00%. In completing the 2018 Refinancing, we have amended the cross-currency interest rate swaps, or the CCIRS, which were entered previously as part of the 2017 Refinancing in order to continue to manage the interest rate and foreign exchange risks associated with our new debt structure.

Our ability to fund working capital needs, planned capital expenditures and scheduled debt payments under the New Term Loan, New Revolver and the 8.25% Notes, depends on our future operating performance and cash flow, which in turn, is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control.

Working Capital

We define working capital as current assets less current liabilities, excluding debt net of the unamortized portion of deferred transaction costs and debt premium related to the embedded derivative. Working capital and cash flow measures are used to evaluate the performance of our operations and the ability to meet financial obligations. The following table presents the components of working capital as of the periods listed below:

	As at September 30,			As at December 31,
(in thousands of $)	2018			2017			2016
Cash and cash equivalents	$	210,567		$	97,385		$	37,453
Amounts receivable		54,453			39,838			2,519
Contract assets		6,061			—			—
Inventory		5,371			3,300			1,916
Prepaid expenses and deposits		11,478			3,455			2,783
Gaming revenue payable to the BCLC, AGLC and OLG		(13,475	)		(13,900	)		(6,739	)
Accounts payable and accrued liabilities		(102,526	)		(96,306	)		(44,956	)
Working Capital	$	171,929		$	33,772		$	(7,024	)

The working capital deficiency at a period end is due largely to operating payables and/or construction payables. Negative working capital at the end of a period is funded through a combination of cash from operations, and draws under the Revolver. We also closely manage the timing of our capital expenditure program and have the ability to scale back or adjust the timing of non-committed capital expenditures as necessary to conserve cash. We expect that our cash on hand and cash flows from operations will be adequate to meet our working capital needs for the next twelve months.

Under the terms of the BCLC operational agreements, cash floats of $nil million were provided as at September 30, 2018 by the BCLC. Effective April 20, 2018, we completed the transition and was responsible for providing the cash floats. On April 30, 2018, the BCLC returned the letters of credits issued to them by us in the amount of $22.7 million in relation to the cash floats and security provided.

We have provided the OLG with letters of credit totaling $72 million as at September 30, 2018 as performance security under the COSAs.

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Contractual Obligations

The following table summarizes our contractual obligations on an undiscounted basis (excluding excess cash payments as required by the credit agreement of the New Term Loan and the Revolving Credit Facility) as of September 30, 2018:

Contractual Obligation	Expected payments by period as at September 30, 2018
(in thousands of $)	Expected within 1 year		2–3 years		4–5 years		More than 5 years		Total
Deferred consideration payable	$	700	$	—	$	—	$	—	$	700
Long-term debt(1)(2)		70,482		134,416		131,936		897,944		1,234,778
Operating lease and other commitments(3)		95,963		140,910		133,841		1,080,418		1,451,132
Total contractual obligations	$	167,145	$	275,326	$	265,777	$	1,978,362	$	2,686,610

Notes:    (1) Calculation includes projected principal repayments and interest payments on long-term debt calculated as at September 30, 2018.

(2) As at September 30, 2018, the mandatory prepayment or the Excess Cash Payment related to the 2018 Senior Secured Credit Facility is nil as the calculation is performed on an annual basis effective the fiscal year ending December 31, 2018.

(3) The lease terms are between one and 23 years, and the majority of lease agreements are renewable at the end of the lease period at market rent. This also includes commitments for the acquisition of slot machines, the GMS implementation, construction and development expenditures, and security deposit for the SLB properties.

Capital Expenditures

The majority of our properties have been renovated or expanded in recent years and require minimal maintenance capital expenditures. In the newly acquired Southwest Ontario and North Ontario properties, we are obligated to maintain and purchase slot machines, which will increase maintenance capital expenditures in future periods. The following table summarizes our capital expenditures and the breakdown between maintenance and growth capital expenditures.

	Nine months ended September 30,		Year ended December 31,
(in thousands of $)	2018		2017		2016
Maintenance capital expenditures	$	3,872	$	4,140	$	3,834
Growth capital expenditures		93,181		95,644		66,709
Total	$	97,053	$	99,784	$	70,543

As at September 30, 2018, the majority of our capital expenditures on gaming operations in British Columbia were eligible for reimbursement by the BCLC through the FDC, which reimburses gaming operators for approved gaming-related property expenditures by allowing gaming operators to recover these capital expenditures in the form of an additional share of future gaming revenue, to March 31, 2018, and the Minimum Investment Requirement (“MIR”) program effective April 1, 2018. In Ontario, we are entitled to remuneration from the OLG up to a predefined amount per gaming property in each operating year for permitted capital expenditures, a term defined in our COSAs with the OLG. Growth capital projects and expenditures are expected to be funded by cash on hand and operating cash flow.

For the nine months ended September 30, 2018, the majority of our capital expenditures on gaming operations in BC qualify under the MIR program, which replaced the BCLC’s FDC and Accelerated Facility Development Costs program, effective April 1, 2018 in connection with the new OSA. Through the MIR program, all our British Columbia casino and community gaming centre operations are entitled to additional compensation from BCLC at a rate of 5% of net win as long as we are meeting its agreed long-term investment. In Ontario, we are entitled to remuneration from the OLG up to a predefined amount per gaming property in each operating year for permitted capital expenditures, a term defined in our COSAs with OLG.

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For the year ended December 31, 2017 growth capital expenditures primarily related to the following: the purchase of slot machines for the Ontario properties; renovations and new F&B outlets at Grand Villa Casino Burnaby; the development of the Starlight Casino Edmonton; the relocation and new build of Cascades Casino Penticton; and new F&B outlets at Chances Playtime Campbell River and Chances Playtime Courtenay.

For the year ended December 31, 2016, growth capital expenditures mainly related to the development of the Grand Villa Casino Edmonton, Palace Casino Edmonton and Cascades Casino Penticton properties, the construction of the Alpina Bar at the Grand Villa Casino Burnaby, and the acquisition of land and building adjacent to the Cascades Casino Langley for future development of the property.

As we continue to expand and diversify our revenue stream through property expansions, relocations and renovations, we currently have a number of initiatives at our operations in British Columbia including (i) the expansion and hotel renovation at our Cascades Casinos Langley that is expected to complete in the second quarter of 2019; (ii) the relocation and expansion of our Mission property that is expected to complete in the fourth quarter of 2019; and (iii) a new casino build in the City of Delta that is expected to offer 40,000 square feet in gaming space. The estimated capital expenditure for above is expected to be approximately $82 million.

Growth Capital Projects for Ontario

The transaction with the OLG included the acquisition of all capital assets related to the operations of the Southwest Ontario, North Ontario and Central Ontario properties, including all owned facilities, all slot machines and other gaming equipment. Plans for the properties include significant renovations, redevelopments or relocations of four of the existing properties and the development of three new casinos. The total estimated capital costs of these plans, including the acquisition price of the properties is approximately $490 million to $530 million and is being incurred over a three-year period from the closing of the acquisitions of the Southwest Ontario, North Ontario and Central Ontario properties.

Quantitative and Qualitative Disclosure about Market Risk

Our activities expose us to a variety of financial risks, which include credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. Our risk management activities are designed to mitigate possible adverse effects on our performance. Risk management activities are managed by the finance and accounting department.

Our significant financial instruments and the types of risks to which their carrying values are exposed are as follows:

Credit Risk

Credit risk is the risk that a party to one of our financial instruments will cause a financial loss to us by failing to discharge an obligation. The carrying values of our financial assets represent the maximum exposure to credit risk and are as follows:

Cash and cash equivalents: Credit risk associated with these assets is minimized by ensuring that cash and cash equivalents are held by high-quality financial institutions or are held at our casinos or CGCs.

Amounts receivable: Credit risk associated with these balances is minimized due to the nature of our business. The majority of the balances are due from the federal government for sales tax rebates and provincial gaming corporations. As at September 30, 2018, we had a provision for bad debts of $4.0 million (2017–$nil; 2016–$nil) and no amounts receivable were past due or impaired.

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Liquidity Risk

Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with our financial liabilities that are settled by delivery of cash or another financial asset. We settle our financial obligations out of cash and cash equivalents. Our ability to accomplish this depends on generating sufficient revenue, collecting amounts receivable in a timely manner and maintaining sufficient cash and cash equivalents for anticipated needs. As at September 30, 2018, we had gaming revenue payable to the BCLC, the AGLC and the OLG of $13.5 million, accounts payable and accrued liabilities of $102.5 million, current debt obligations of $70.5 million (including the current portion of long-term debt and projected interest payments) and current deferred consideration payable of $0.7 million, all of which become due with one year of the balance sheet date.

Market Risk

Market risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates and/or foreign exchange rates or other price risk.

Interest Rate Risk

Interest rate risk is the risk that the fair values or cash flow of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to market risk for changes in interest rates is due to our variable-rate debt.

As at September 30, 2018, if interest rates on the variable rate long-term debt (US and Canadian Term Facility) had been 1% higher or 1% lower, with all other variables held constant, the effect on interest expense for the nine months ended September 30, 2018 would have been $3.7 million (2017—$5.7 million; 2016—$3.2 million; 2015—$2.9 million).

For additional information about interest rates on the debt, see Note 9 of the Gateway Casinos & Entertainment Limited Condensed Consolidated Interim Financial Statements and Note 14 of the Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements. Pursuant to our CCIRS contracts described below, management has converted 75% of the interest due on Term Loan B-1 from a floating to fixed rate loan for the duration of the CCIRS.

Foreign Exchange Rate Risk

Foreign exchange rate risk is the risk that the fair value or cash flow of a financial instrument will fluctuate due to changes in foreign exchange rates. We are exposed to foreign exchange rate risks, as at September 30, 2018, because the Term Loan B and 8.25% Notes are denominated in US dollars. We have entered into CCIRS to manage known currency exposure on our 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.

The CCIRS contracts cover 75% of the US$440.0 million principal of the Term Loans B and 75% of the US$255.0 million principal of the 8.25% Notes. The CCIRS contracts pertaining to Term Loan B are fixed at a weighted average US dollar to Canadian dollar foreign exchange rate of 1.3166 and 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%.

If the period end foreign exchange rate had been 10% higher or 10% lower, with all other variables held constant, the effect on our foreign exchange for the nine months ended September 30, 2018 would have been $90.4 million higher or lower (year ended December 31, 2017—$85.3 million), respectively.

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Cash and cash equivalents as at September 30, 2018, December 31, 2017 and December 31, 2016 contain US dollar denominated amounts of US$5.2 million, US$5.6 million and US$0.2 million, respectively.

Accounts payable and accrued liabilities as at September 30, 2018, December 31, 2017 and December 31, 2016 contain US dollar denominated amounts of US$17.3 million, US$22.3 million and US$0.2 million, respectively.

Effects of Inflation

The effects of inflation were not considered material in the periods covered, due to the steady nature of inflation over this period.

Debt Prepayment Option

As of September 30, 2018, we have prepayment options on our long-term debt, which are considered embedded derivatives. The embedded derivatives are accounted for separately and included in “Other assets” on the consolidated balance sheet.

Contingencies and Litigation

Various claims and litigation arise in the course of our business. We have accounted for sufficient provisions in relation to such claims and litigation, and remaining contingencies should not have a material effect on our financial position or operating results.

Tax Matters

Income Tax Matters

As of September 30, 2018, 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 FDCs as taxable income, and (ii) reclassified certain costs incurred by us as “eligible capital expenditures” rather than the cost of Class 14 depreciable property, as described in greater detail below. In addition, the CRA has also issued notices of reassessment or notices of determination of loss to our subsidiaries Boardwalk Squamish and 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.

Under our MCOSA with the BCLC, we are entitled to receive FDCs in respect of certain agreed upon capital expenditures undertaken by us. Similarly, Boardwalk Squamish and 427967 are entitled, under their respective OSAs with the BCLC, to receive FDCs in respect of certain agreed upon capital expenditures undertaken by them. For income tax purposes, we, Boardwalk Squamish and 427967 treated the FDCs as payments that reduced the cost of the related capital expenditures.

In the reassessments and loss determinations for us, Boardwalk Squamish and 427967, the CRA has taken the position that the FDCs were service fees, and that they should therefore be included in income rather than reducing the cost of the related capital expenditures. In the reassessments and loss determinations for us, the CRA has also taken the position that the MCOSA constituted an “eligible capital property” rather than Class 14 depreciable property. This reclassification resulted in a reduction in the capital cost allowance that may be claimed by us, which reduction was partly offset by an increase in our cumulative eligible capital deductions.

We disagree with the CRA’s position, and have filed notices of objection with the Appeals division of the CRA to the reassessments and loss determinations referred to above. We intend to vigorously defend our tax filing position and have appealed to the Tax Court of Canada.

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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.

GST/HST Matters

The CRA has conducted excise tax audits of us relating to the period May 18, 2010 to June 30, 2015 and of our subsidiary 7588674 relating to the period and February 1, 2010 to September 16, 2010. The CRA has taken the view that ATM fees collected by us and our subsidiary did not relate to the provision of an exempt “financial service” to our customers, and that GST and/or HST therefore should have been collected and remitted by us and our subsidiary.

During the year ended December 31, 2017, we and our subsidiary 7588674 received a reassessment from the CRA relating to the taxation period of May 18, 2010 to June 30, 2015 and February 1, 2010 to September 16, 2010, respectively. In the reassessment, the CRA has issued an adjustment to the net tax on our GST/HST returns of $2.5 million and an adjustment to the net tax on its subsidiary 7588674’s GST/HST returns of $0.2 million. In addition, the CRA has assessed penalties of $0.6 million and $0.1 million, respectively. At September 30, 2018, we and our subsidiary 7588674 remitted to the CRA $0.6 million and $0.1 million, respectively.

We and our subsidiary 7588674 intend to vigorously defend their tax filing positions and filed notices of objection to the CRA and, if necessary, will file notices of appeal to the Tax Court of Canada. As at September 30, 2018, the Company and its subsidiary 7588674 have remitted to the CRA $2.5 million and $0.2 million, respectively. The resolution of this matter is likely to take years.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future adverse effect on its financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. From time to time, we may enter into operating leases or letters of credit that would not be reflected in the balance sheet. As at September 30, 2018, we have issued letters of credit totaling $78.1 million.

Transactions with Related Parties

For the nine months ended September 30, 2018 and the years ended December 31, 2017, 2016 and 2015, our controlling shareholder, Catalyst, provided consulting and advisory services through our Executive Chairman Gabriel de Alba without charge.

Key management includes our board of directors and executive officers. Compensation awarded to key management is as follows:

	Nine months ended September 30,		Year ended December 31,
(in thousands of $)	2018		2017		2016			2015
Salaries and other benefits	$	2,721	$	3,314	$	1,975		$	1,401
Share-based payments (recovery)		8,441		19,631		(3,111	)		4,982
Total	$	11,162	$	22,945	$	(1,136	)	$	6,383

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Outstanding Share Data

As at September 30, 2018, there were 39,407,510 common shares issued and outstanding compared to 39,398,564 common shares as at December 31, 2017, 39,389,618 common shares as at December 31, 2016 and 39,380,673 common shares as at December 31, 2015.

Application of Critical Accounting Estimates and Judgments

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management’s estimates, assumptions and judgments are based on historical experience and other factors considered to be reasonable, including expectations of future events.

Estimates and assumptions that could result in a material effect in the next financial year on carrying amounts of assets and liabilities are outlined below:

Impairment of Non-Financial Assets

The determination of a long-lived asset impairment requires significant estimates and assumptions to determine the recoverable amount of a cash generating unit, or CGU, the recoverable amount being the higher of fair value less costs of disposal, or FVLCOD, and value in use, or the VIU. The FVLCOD and VIU methods involve estimating the net present value of future cash flows derived from the use of the CGU, discounted at an appropriate rate.

In the event an impairment analysis is required, the key assumptions that would be utilized in the determination of our future cash flows would represent management’s best estimate of the range of economic conditions relating to the CGU, and would be based on historical experience, economic trends and communication with our other key stakeholders. These key assumptions would include the revenue growth rate, margin as a percentage of revenues, capital expenditures, the inflation growth rate and the discount rate. Significant changes in the key assumptions that would be utilized in the determination of future cash flows could result in an impairment loss or reversal of a previously recognized impairment loss.

Estimated useful lives of non-financial assets

Judgment is used to estimate each component of a tangible and intangible asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and, in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives change, this could result in an increase or decrease in the annual amortization and depreciation expense, and future impairment charges.

Income Taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the consolidated financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of our future financial results.

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Changes in the expected operating results, enacted tax rates, legislation or regulations, and our interpretations of income tax legislation, will result in adjustments to the expectations of future timing difference reversals, and may require material deferred tax adjustments.

Fair value of long-term debt

We make estimates and assumptions relating to fair value disclosure of the long-term debt. The critical assumptions underlying the fair value disclosure include the credit spread. We review various comparable debt securities and determine a reasonable credit spread applicable to the debt securities.

Fair Value of Embedded Derivatives

We are required to determine the fair value of embedded derivatives, such as prepayment options, separate from its long-term debt. Fair values for embedded derivatives are determined using valuation techniques and require estimates of redemption dates and forward interest rates existing at the balance sheet date as the financial instruments are not traded in an active market.

Fair value of derivative financial instruments

The estimated fair value of derivative financial instruments has been determined based on appropriate valuation methodologies and/or third party indications. Fair values determined using valuation models require the use of assumptions concerning the amount and timing of future cash flows, discount rates, credit risk and probability of future events that are beyond management’s control. In determining these assumptions, we relied on external, readily observable quoted market inputs, where available, including Canadian and United States forward interest rate yield curves, and Canadian and United States foreign exchange rates, discounted to a present value as appropriate.

Share-based Compensation

Share-based compensation provided to executives takes into account the number of common shares expected to vest based on an estimate of the most likely possible outcome of a sale of some or all common shares by the existing shareholders and the possible service periods of the officers. The calculation also incorporates a per share fair value, based on the most recent share issuance.

It is reasonably possible that future estimates or the actual outcomes and timing of a liquidity event may be different from the assumptions used in the preparation of the financial statements and a material change in the share-based compensation reflected in the condensed consolidated interim statement of operations and comprehensive loss may occur. The range of possible outcomes is dependent on the interaction of multiple factors.

Judgments that management has made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized in the Financial Statements are outlined below:

Segment reporting

We have aggregated our operating segments into reportable segments based on an assessment that each operating segment has similar economic characteristics, types of customers, types of services and products provided, regulatory environments and management and reporting structures.

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Leases

We have classified our leases as finance or operating based on assessments that the definition of a lease arrangement was met, the lease terms could be estimated with certainty and the discount rate used was reasonable.

Revenue recognition

The application of IFRS 15 requires that we make a number of estimates and judgments, including the determination of the nature of our performance obligations under our contracts, the assessment of the amount we expect to be entitled for and the timing of recognition.

In analyzing our contracts with the different Provincial Crown corporations, we first evaluate whether our various promises to provide goods or services represent that of the principal in the transactions with casino patrons or that of the provincial body’s agent in providing such services. We have concluded our services are as an agent since the legal party in the wagering transaction with customers rests with the Provincial Crown corporations and we are engaged to provide services under their authority. As a result, revenue is recognized net of the amounts paid to the Provincial Crown corporations.

New Accounting Standards Applied in the Year

Effective January 1, 2017, IAS 7, Statement of Cash Flows, introduced new requirements to disclose changes in liabilities arising from financing activities, including changes arising from cash flows and noncash changes. The required disclosures have been added to Note 14 of the Gateway Casinos & Entertainment Limited Audited Consolidated Financial Statements.

IFRS 9, Financial Instruments, addressed revised guidance on the classification and measurement of financial instruments and replaced guidance in IAS 39, Financial Instruments: Recognition and Measurement. We adopted IFRS 9 on a retrospective basis without restatement of comparative periods. The new standard also includes a new expected credit loss model for calculating impairment on financial statements. Due to the nature of our business, this change did not have a material impact on the consolidated financial statements.

IFRS 15, Revenue from Contracts with Customers, deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard introduces a single, principles-based, five-step model to be applied to all contracts with customers. The standard provides guidance on timing of revenue recognition, including accounting for variable consideration, costs of fulfilling and obtaining a contract and various other matters. New disclosures in respect of revenue are also introduced. The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.

We adopted IFRS 15 using the full retrospective method on January 1, 2018, which resulted in changes in accounting policies and adjustments to the amounts recognized in the consolidated financial statements and previous periods. The adoption of IFRS 15 had no impact on the consolidated balance sheet as at January 1, 2016.

The new standard increased our revenue disclosure requirements, including disaggregation of revenue and discussion of deferred revenue.

Accounting Standards Issued But Not Yet Applied

At December 31, 2017, a number of standards and interpretations, and amendments thereto, had been issued by the IASB. A summary of those standards, interpretations and amendments, are set out below:

IFRS 16, Leases, specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease

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term is 12 months or less or the underlying asset has a low value. IFRS 16 will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted.

We have started the assessment of the impact of adoption of the new standard on our financial statements. 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 we currently treat as operating leases. We do not intend to adopt the new standard prior to the mandatory effective date.

IFRIC 23, Uncertainty Over Income Tax Treatments, includes requirements that add to the requirements in IAS 12, Income Taxes by specifying how to reflect the effects of uncertainty in accounting for income taxes. IFRIC 23 will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted.

We are currently assessing the impact of the interpretation and do not intend to adopt the new standard prior to the mandatory effective date.

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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 and Southwest Bundles. With this acquisition, 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, 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, the anticipated acquisition of a gaming facility in British Columbia and a proposed new build in Delta, British Columbia, would bring our total number of properties to 30.

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

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

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 four

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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 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”.

Our Properties

See “Prospectus Summary—Property Highlights” for information regarding our properties.

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

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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, 2018, 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) 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 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.

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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, New Jersey Division of Gaming Enforcement.

Notes:    (1) 2018 U.S. gaming win is presented for the last twelve months as of March 31, 2018 and assumes an exchange rate of $1.28 per US$1, representing the average exchange rate from April 1, 2017 to March 31, 2018.

(2) Peak to trough decline is calculated as the percentage change between fiscal year 2010 and fiscal year 2008 for the Canadian markets and the percent 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 2018. Illinois data includes VGTs.

Our Markets

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 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 revenue, table games consisted of approximately

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25% of total 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.

Within the Alberta market, our two properties compete with six other casinos, four of which are in the Edmonton region and the other two are just outside Edmonton (Enoch and St. Albert respectively).

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 at 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 the COSA.

According to the OLG, in fiscal year 2017–18, the OLG generated approximately $7.58 billion in total revenue (gaming and non-gaming) 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. For fiscal years 2016 to 2018 revenue is presented net of service provider fees.

(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 $2.0 billion in aggregate casino and CGC Win for the year ended March 31, 2018. For this period, the BCLC generated revenue from the following activities:

Total Gaming Win by Channel	Casino Gaming Win by Channel

Source: BCLC.

Casino Win in British Columbia grew at a CAGR of 2.1% for the 10-year period ended March 31, 2018 and the BCLC is forecasting a CAGR of 0.4% from the year ended March 31, 2018 to March 31, 2021. The following chart presents annual gaming revenue in British Columbia:

Historical and Forecast Casino Gaming Win in British Columbia⁽¹⁾

(in $ billions)

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

Note:    (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.

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%,

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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 MIR program has replaced the FDC and AFDC programs. Under the MIR program, service providers are required to make minimum annual investments (generally in an amount equal to 5% of Net Win for the year ended March 31, 2017 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 $3.43 billion in annual casino Win and $7.6 billion in total revenue (gaming and non-gaming) for the year ended March 31, 2018. The following chart illustrates the division of OLG total revenues by gaming activity:

OLG Win by Channel

(year ended March 31, 2018)

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 after prizes has grown at a 5.0% CAGR.

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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. The following chart presents annual casino revenue after prizes in Ontario for the 10-year period ended March 31, 2018 as well as forecast to March 31, 2022.

Historical and Forecast Casino 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. For fiscal years 2016 to 2018 revenue is presented net of service provider fees.

(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.

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 113% higher in Alberta than in Ontario, 65% higher in British Columbia and 120% higher in the five largest U.S. locals driven markets:

Adult Population⁽¹⁾⁽²⁾

(in millions)

Sources: United States Census Bureau, Statistics Canada.

Notes:    (1) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

(2) Five largest U.S. locals driven markets include Nevada (excluding contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey.

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Adult Persons per Gaming Position^(1)(2)(3)

Sources: United States Census Bureau, Statistics Canada, OLG, BCLC, AGLC, Nevada Gaming Control Board, Pennsylvania Gaming Control Board, Louisiana State Police, Illinois Gaming Board, New Jersey Division of Gaming Enforcement, The Innovation Group.

Notes:    (1) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

(2) Five largest U.S. locals driven markets include Nevada (excluding contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey.

(3) Gaming positions as of 3/31/2018 for Top 5 U.S. Locals Driven Markets, Alberta and British Columbia; Ontario gaming positions for Gateway’s properties per the prospectus and all other Ontario properties are per The Innovation Group report from November 2017; table games includes poker tables and assumes six gaming positions per table.

Gaming Win per Adult Person^(1)(2)(3)

(in C$)

Sources: United States Census Bureau, Statistics Canada, OLG, BCLC, AGLC, UNLV, Nevada Gaming Control Board.

Notes:    (1) Gaming win is presented for the last twelve months as of March 31, 2018. U.S. gaming win assumes an exchange rate of $1.28 per US$1, representing the average exchange rate from April 1, 2017 to March 31, 2018.

(2) Five largest U.S. locals driven markets include Nevada (excluding gaming win contribution from Las Vegas strip), Pennsylvania, Louisiana, Illinois and New Jersey. Illinois data includes VGTs and Alberta data includes VLTs.

(3) Adult population includes individuals ages 18 years and older; population statistics as of July 1, 2017.

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

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• 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.

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.

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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, 2018. 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.

The following chart presents annual Win in Alberta for the 10-year period ended March 31, 2018.

Historical Gaming Win in Alberta⁽¹⁾

(in $ billions)

Source: AGLC.

Note:    (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.

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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.

Competitive Strengths

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.

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• 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⁽¹⁾⁽³⁾ (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 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 with adjustments made by the Company. 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 audited 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.

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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 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.

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 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 at our properties is expected to end fully 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.

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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 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. For the period from 2011 through March 31, 2018, we were reimbursed $207 million for qualifying capital expenditures incurred since the inception of the FDC and AFDC programs. 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.

The Permitted Capital Expenditures Allowance

For our operations in Ontario, we are entitled to Permitted Capital Expenditures allowances, payable by the OLG, for a proportion of the Permitted Capital Expenditures that we incur in the various gaming zones located in the Southwest, North and Central Bundles as per the terms set forth in the COSAs. These allowances are captured as revenue and they increase Adjusted EBITDA. The amount of Permitted Capital Expenditures payable to us will increase annually based on a pre-determined inflation rate.

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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. 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.

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). 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

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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 industry-leading 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 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, 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.”

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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(2)	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.

(2)    The renovation and rebranding of the Point Edward Casino was completed in November 2018.

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.

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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 and expect that they will be funded through a combination of cash on hand and operating cash flow as well as the available capacity under our revolver to manage timing difference in cash flow. 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(2)	30(2)	•  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.

(2) Subject to BCLC final approval.

Regulatory and Licensing Matters

Overview

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. Accordingly, we and other licensed service providers must provide gaming-related services in accordance with applicable provincial laws and regulations. In addition to the relevant provincial legislation, service providers are also subject to a variety of other regulatory obligations, including federal anti-money laundering regulations, certain municipal approval processes, provincial licensing requirements for the sale and use of alcohol, and federal anti-spam legislation.

Provincially Regulated Gaming

The Gaming Control Act (British Columbia), the Ontario Lottery and Gaming Corporations Act, 1999, the Gaming Control Act (Ontario), the Gaming, Liquor and Cannabis Act (Alberta), or GLCA, and the regulations promulgated thereunder empower the Gaming Authorities and Gaming Regulators to oversee and regulate the gaming industry in British Columbia, Ontario and Alberta. This legislation (i) sets out certain registration requirements for service providers and/or key personnel, (ii) prescribes certain ongoing reporting and approval requirements and (iii) imposes other obligations on service providers, including the obligation to prevent unauthorized gaming by minors.

The Gaming Authorities broadly oversee the gaming industry and license and/or enter into operating services agreements with third party private service providers, like us, which govern the development and operation of gaming properties within the applicable province. Third party service providers provide gaming properties and services and in return, share in the revenue earned at such properties.

The Gaming Regulators are responsible for the enforcement of their respective aforementioned provincial gaming legislation and ensuring the integrity of all gaming operations and activities. Service providers must be approved by and registered with the Gaming Regulators before being granted a license or entering into an operating services agreement. Each of the Gaming Regulators is also empowered to, among other things, conduct inquires and investigations, make orders to freeze property and suspend registrations or licenses. Service providers are obligated under provincial gaming legislation to demonstrate compliance with applicable regulations, comply with information requests and submit to or facilitate investigations or inquiries.

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Anti-Money Laundering

Certain industries in Canada, like the gaming industry, are subject to the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or the PCMLTFA, and applicable regulations promulgated thereunder. Entities that conduct and manage casinos and CGCs of a certain size in Canada, such as the Gaming Authorities, are required to meet the strict anti-money laundering, customer identification and reporting requirements set out in the PCMLTFA. Compliance with the requirements of the PCMLTFA is overseen by the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, a federal financial intelligence unit that reports to the Minister of Finance. Among other responsibilities, FINTRAC is charged with ensuring provincial Crown corporations, including the Gaming Authorities, have developed and initiated effective anti-money laundering, or AML, compliance programs.

On September 28, 2017, the Attorney General of British Columbia appointed independent expert, Peter German, to conduct a review of British Columbia’s anti-money laundering policies and practices in the gaming industry, with a focus on the GVRD. The review was undertaken in response to a 2016 MNP LLP report, commissioned by the GPEB that looked at practices related to suspicious cash transactions at a single British Columbia casino. Mr. German reviewed the role of partners and agencies, including provincial regulators, federal regulators, law enforcement and operators such as Gateway.

On December 5, 2017, Mr. German provided the Attorney General of British Columbia with the following interim recommendations: (i) that gaming service providers must complete a source of funds declaration for cash deposits or bearer bonds of $10,000 or more and (ii) that GPEB investigators must be seen on site at large, high-volume facilities in the Lower Mainland. The Attorney General directed the BCLC and the GPEB to implement the interim recommendations. Mr. German completed his review in March 2018 and delivered an independent report, which included 48 substantive recommendations, to the Attorney General of British Columbia on April 3, 2018. On June 27, 2018, the Attorney General of British Columbia released Mr. German’s independent report to the general public.

The comprehensive report has attracted considerable media and political attention and includes a number of recommended changes to gaming laws, regulations and practices in British Columbia. 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. We will continue to actively monitor developments with respect to the adoption of any of the recommendations and any other pending changes to the gaming regulatory environment in British Columbia. Any interim recommendations or other changes implemented by BCLC or GPEB as a result of Mr. German’s independent report have had no material impact on our business. While we currently believe that any further changes made as a result of 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 further specific amendments are proposed to gaming laws and regulations.

In order to ensure strict compliance with all AML programs and requirements, we have implemented a comprehensive AML policy that includes the following areas:

• Training—we train all key staff (including key gaming floor staff) on our standard AML procedures, at minimum, on an annual basis and normally also provide continued on-the-job training in between annual sessions. We also provide basic training to all potential employees prior to offering them employment.

• Processes and Procedures—we regularly update our AML processes and procedures to reflect any changes in the regulatory requirements and/or in response to feedback from our employees. To facilitate the communication of this feedback, our Chief Compliance and Risk Officer meets regularly

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with staff to discuss potential issues, pending risks and the development of mitigation strategies where prudent.

• Internal Audits—we conduct scheduled and unscheduled internal audit reviews of our AML processes and procedures. Any identified deficiencies have mitigation strategies developed to ensure ongoing compliance.

• Industry Insight and Visibility—our Chief Compliance and Risk Officer and other members of our compliance team are members of the “Casino Anti-Money Laundering Working Group”. The Casino Anti-Money Laundering Working Group includes participants representing service providers, the Gaming Authorities and other stakeholders in the gaming industry who regularly discuss recent developments in AML issues and regulation. The Chief Compliance and Risk Officer and other key staff also meet regularly with regulators to discuss AML and other compliance activities, to ensure ongoing compliance and maintain our strong and transparent relationship with the regulators.

We provide oversight and implementation of our anti-corruption compliance policy through our compliance, internal audit and corporate functions within the organization. In addition, we have developed an anti-corruption policy and related procedures to address anti-corruption risks. Our anti-corruption policy explicitly prohibits overt, direct or indirect, bribery of public officials, kickbacks and the provision of excessive hospitality and entertainment to public officials. Employees are also required to report any solicitation by public officials, knowledge or suspicion of bribery and “red flags” to our Chief Compliance & Risk Officer. We have also implemented certain organizational procedures designed to ensure precautions are taken to form business relationships with reputable partners and business associations. We complete periodic reviews and monitor our compliance programs and embed assessment of these risks in our internal controls and risk practices.

We also assist the Gaming Authorities with fulfilling their reporting obligations to FINTRAC by regularly preparing and providing to Gaming Authorities, for submission to FINTRAC, reports on suspicious transactions, the possession of terrorist property, large cash transactions, electronic funds transfers, casino disbursements and any other reports as may be required by PCMLTFA. Our strict policies and reporting procedures have allowed us to proactively mitigate compliance risks and have helped us foster a strong reputation for overall compliance including AML compliance and a transparent relationship with the Gaming Authorities.

We operate in a business sector that is exposed to money laundering risks, and recognizes that it must take measures to ensure compliance with national and international laws and regulations regarding money laundering, terrorist financing, tax evasion, corruption and other crimes. In recognition of this, we have established risk-based policies and procedures designed to help ensure that its business is not exploited by those that wish to launder the proceeds of crime. Although we take reasonable efforts to help ensure its compliance with applicable anti-money laundering laws, in the event that we are found to have violated such applicable law, we could incur significant costs associated with an investigation, significant monetary fines and penalties, and its licenses to operate its business could be subject to regulatory review.

See “Risk Factors—Risks Related to Our Business—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.”

Other Regulatory and Licensing Requirements

Elements of our gaming operations are subject to the approval of local governments. New property developments, expansions and relocations are subject to municipal approval, which involves considerable consultation with the public, including one or more public hearings. See “Risk Factors—Risks Related to Our Business—Municipal restrictions or prohibitions may affect our operations.”

The use and sale of alcohol in gaming properties is also highly regulated in BC, Ontario and Alberta through the issuance, monitoring and enforcement of liquor license requirements and related liquor license conditions.

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Liquor licenses are issued and enforced by the British Columbia Liquor Control and Licensing Branch, the AGCO and the AGLC, respectively. We have liquor licenses for each of its properties that serve alcohol. See “Risk Factors—Risks Related to Our Business—Liquor laws and associated liquor licenses in British Columbia, Ontario or Alberta may affect our operations.”

We are subject to legislation commonly referred to as Canada’s Anti-Spam Legislation, or CASL, which establishes rules for the sending of commercial electronic messages and the installation of computer programs. CASL also prohibits the unauthorized alteration of transmission data. CASL applies to all persons, including incorporated businesses, that send electronic messages for commercial purposes. In order to promote compliance with CASL, we maintain an anti-spam policy applicable to all employees, managers, executives and the Board.

Operating Agreements and Licenses

British Columbia

In British Columbia, the GPEB is responsible for the overall integrity and regulation of gaming. The BCLC conducts and manages all gaming activity in the province. Registration with the GPEB is required for us and our directors, officers and key employees. The GPEB investigates all applicants for registration, including conducting background searches, and has the discretion to grant or refuse registration.

Recent Changes to Our BC Casino Operating Agreements

On April 1, 2017, BCLC introduced several changes to the financial framework related to the customer loyalty program which ultimately led to changes to how all operators, including Gateway, account for free play credits and loyalty points redeemed by patrons (“Free Play Program”). The treatment of the Free Play Program resulted in a decrease in slot revenue (as free play credits and loyalty points are now deducted from Slot Win before the service provider commission is calculated) and a corresponding significant reduction in marketing expense. Prior to the change, service providers incurred 100% of the cost of free play redeemed which was recorded as a cost within marketing expense. Currently there is no cost to free play redeemed up to a maximum threshold (2.5% of net slot win or 1% of net table win). The reduction in marketing expense significantly exceeds the corresponding reduction in revenue. Above the maximum threshold, the service providers are charged a fee of $0.47 per dollar redeemed. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Factors and Trends Affecting Our Performance—Regulatory Changes and Changes to our Operating Agreements or Gaming Licenses.”

The new OSAs, which became effective April 1, 2018 and run for a 20-year period, replace the MCOSA, CGCOSAs, and BOSAs (other than the Playtime Gaming Victoria BOSA) which previously governed our relationship with the BCLC. The new OSAs increase our share of table and bingo commissions, eliminate marketing commissions and table games supply costs previously payable to the BCLC and introduce the fixed 5% MIR program to replace the FDC and AFDC program. For further information about how the new OSAs are expected to impact our business and financial performance, see “Management’s Discussion & Analysis of Financial Condition and Results of Operations”, “Selected Summary Pro Forma Financial Information” and “Selected Pro Forma Financial Information”.

OSAs

The BCLC engages service providers, including us, to deliver gaming services pursuant to operational services agreements. Each of our casino gaming properties and CGCs in British Columbia, other than Playtime Gaming Victoria, is operated pursuant to the OSAs. The BCLC remains solely responsible for the conduct, management and operation of all slot machines, table games and other such lottery and related promotional schemes that are conducted, managed and operated by the BCLC in the premises from time to time. The BCLC additionally owns, provides and maintains certain gaming equipment and supplies that enable us to perform the operational services set out in the OSAs.

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Under the OSAs, we agree to indemnify and save harmless the BCLC from any and all liabilities, claims, actions and judgments arising from or relating to any acts or omissions of ours or any person engaged or employed by us in the provision of operational services or the performance of the OSAs. Among other things, we also agree to indemnify and save harmless the BCLC in respect of all costs, expenses, charges and liabilities which may be levied or assessed against the BCLC in connection with our obligations as an employer and as a party to independent contractor agreements for the supply of operational services.

Under the OSAs, we are required to obtain prior written approval from the BCLC, which will not be unreasonably withheld, before granting a security interest in the OSAs to a lender in connection with a financing arrangement. Such approval cannot prevent the BCLC from exercising its rights and remedies under the OSAs upon the occurrence of an “Event of Default” (as defined in the OSAs) or authorize or permit the lender to supply the operational services to be provided by us under the OSAs, other than with the express written consent of the BCLC on such terms and conditions as may be prescribed by the BCLC.

Under the OSAs, the BCLC restricts share ownership of our common shares without approval from the BCLC and GPEB. No person or group of persons acting jointly or in concert may hold or beneficially own a Significant Interest without obtaining prior written consent of GPEB and the BCLC. In addition, any person or group of persons acting jointly or in concert holding or beneficially owning, either directly or indirectly, a Significant Interest in our common shares must obtain GPEB and the BCLC’s consent prior to disposing or acquiring common shares or disposing of any part of that interest if such disposition or acquisition would result in a change of control of Gateway. A “Significant Interest” for purposes of the BCLC and the OSAs is an interest greater than 5% of our issued and outstanding common shares.

The OSAs will be effective for a 20 year term and, upon twelve months written notice from the BCLC, can be extended for an additional five years. Pursuant to the OSAs, we collect the following remuneration from the BCLC:

• 25% of Net Win from slot machines and electronic table games;

• 42.5% of Net Win from electronically assisted table games;

• 40.0% or 42.5% of Net Win from standard table games, as prescribed by the BCLC;

• 62.5% of Net Win from low limit blackjack;

• 77.5% of Net Win from craps and community poker;

• 77.5% of the Net Win from craps;

• a portion of the Net Win from bingo games, calculated as follows:

(i) 90% of weekly Net Win from bingo games on the first $10,000 of weekly Net Win from bingo games;

(ii) 45% on weekly Net Win from bingo games in excess of 10,000 of weekly Net Win from bingo games;

(iii) 60% of weekly Net Win from bingo paper side games; and

(iv) 25% of weekly Net Win from electronic pull tabs (BETS);

• 5% of Net Win, assuming we make the required minimum investments required under the MIR program; and

• For all other classes or subclasses of games, the percentage of Net Win for that class or subclass of game as may be prescribed by the BCLC.

The BCLC may terminate the OSAs with notice upon any of the following events: (i) in the event that any applicable law renders the performance of the OSAs wholly or partially illegal; (ii) an “Event of Default” (as such term is defined in the OSAs); or (iii) a suspension of our rights as service provider pursuant to the OSAs, if such suspension continues for at least 18 months.

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BOSA

We continue to provide operational services for bingo at Playtime Gaming Victoria pursuant to the BOSA, pending the conclusion of BCLC’s request for proposal for a new gaming property in the Greater Victoria Region. Under the BOSA, we provide the premises and the BCLC remains solely responsible for the conduct, management and operation of all bingo games and such other related promotional schemes, conducted, manages and operated by the BCLC in the premises from time to time. The BCLC additionally owns, provides and maintains certain gaming equipment and supplies that enable us to perform the operational services set out in the BOSA. We collect 60% of Win on the first $20,000 of weekly Win; 40% of Win in excess of $20,000 up to and including $80,000 of weekly Win; and 25% thereafter, as remuneration for operational services at Playtime Gaming Victoria.

We expect that our operational services for bingo at this location will cease on December 31, 2018 upon the formal termination of our BOSA.

The following tables set forth, for each of our British Columbia properties, the authorized games, principal gaming equipment and supplies provided by the BCLC pursuant to the OSAs and BOSA:

Our British Columbia Casinos

	Grand Villa Casino Burnaby	Cascades Casino Langley	Starlight Casino New Westminster
Authorized Games	•  Slot machines and electronic table games •  Various table games(1)	•  Slot machines and electronic table games •  Various table games(1)	•  Slot machines and electronic table games •  Various table games(1)
Equipment & Supplies Provided and Maintained by BCLC	•  Slot Machines & Electronic Table games—Minimum of 900(2) •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Slot Machine Control Equipment •  Playing Cards, Dice •  Shuffle Machines •  Integrated Voucher Technology System •  Game Licences •  Game Signage	•  Slot Machines & Electronic Table games—Minimum of 450(2) •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Slot Machine Control Equipment •  Playing Cards, Dice •  Shuffle Machines •  Integrated Voucher Technology System •  Game Licences •  Game Signage	•  Slot Machines & Electronic Table games—Minimum of 850(2) •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Shuffle Machines •  Game Licences •  Game Signage

Notes:    (1) Table games may include Blackjack, Red Dog, Roulette, Wheel of Fortune, Mini Baccarat, and various poker or other games.

(2) The BCLC has the discretion to increase the quantity provided above the minimum specified.

	Cascades Casino Kamloops	Playtime Casino Kelowna	Cascades Casino Penticton	Lake City Casino Vernon
Authorized Games	•  Slot machines •  17 table games(1)	•  Slot machines •  17 table games(1)	•  Slot machines •  Various table games(1)	•  Slot machines and electronic table games •  Various table games(1)

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	Cascades Casino Kamloops	Playtime Casino Kelowna	Cascades Casino Penticton	Lake City Casino Vernon
Equipment & Supplies Provided and Maintained by BCLC	•  Slot Machines •  Slot Machine Control Equipment •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Shuffle Machines •  Game Licences	•  Slot Machines •  Slot Machine Control Equipment •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Playing Cards, Dice •  Shuffle Machines •  Game Licences •  Game Signage	•  Slot Machines •  Roulette Wheels/Balls / Chips •  Chips •  Shuffle Machines •  Coin Counters, Coin Wrap/Counter •  Hard Count Win Scale •  Currency Counters	•  Slot Machines & Electronic Table games—Minimum of 350(2) •  Roulette Wheels/Balls •  Electronic Equipment •  Value & Non-Value Chips •  Playing Cards, Dice •  Shuffle Machines •  Game Licences •  Game Signage •  Slot Machine Control Equipment •  Integrated Voucher Technology System

Notes:    (1) Table games may include Blackjack, Roulette, Mini Baccarat, and various poker tables.

(2) The BCLC has the discretion to increase the quantity provided above the minimum specified.

Our CGCs

	Chances Mission	Chances Squamish
Authorized Games	•  Slot machines •  Bingo Games	•  Slot machines •  Bingo Games
Equipment & Supplies Provided and Maintained by BCLC	•  Slot Machines •  Slot Machine Control Equipment •  Integrated Voucher Technology System •  Bingo Equipment & Supplies •  Monitors	•  Slot Machines •  Slot Machine Control Equipment •  Integrated Voucher Technology System •  Bingo Equipment & Supplies Monitors

	Chances Playtime Abbotsford	Chances Playtime Campbell River	Chances Playtime Courtenay	Playtime Gaming Victoria
Authorized Games	•  Slot machines •  Electronic Blackjack •  Bingo Games	•  Slot machines •  Electronic Blackjack •  Bingo Games	•  Slot machines •  Electronic Blackjack •  Bingo Games	•  Bingo Games
Equipment & Supplies Provided and Maintained by BCLC	•  Slot Machines •  Slot Machine Control Equipment •  Integrated Voucher Technology System •  Bingo Equipment & Supplies •  Monitors	•  Slot Machines •  Slot Machine Control Equipment •  Integrated Voucher Technology System •  Bingo Equipment & Supplies •  Monitors	•  Slot Machines •  Slot Machine Control Equipment •  Integrated Voucher Technology System •  Bingo Equipment & Supplies •  Monitors	•  Bingo Equipment & Supplies •  Monitors

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Facility Development and Minimum Investment Requirement Programs

Pursuant to the new OSAs, the MIR program replaced the FDC and AFDC programs on April 1, 2018. Under the MIR program, we are required to make minimum investments equal to 5% of Net Win for the year ended March 31, 2018 multiplied by 20 years, less the carry-forward balance under the FDC and AFDC programs (“MIR Investments”), throughout the terms of the OSAs. In return, the BCLC will pay a commission to us for such investments at a rate of 5% of Net Win. The minimum investment that we are required to make over the 20-year term of the OSA is approximately $500 million, which is net of the carry-forward balance under the FDC and AFDC programs of approximately $200 million. There is no mandated investment frequency or a minimum annual amount. The timing of the MIR Investments is determined by our strategic plan that we are required to submit to the BCLC under the OSA. The strategic plan outlines our vision, objectives and a general description of the activities and methods we intend to use to reach our objectives at each of our BC properties. Our Strategic Plan also outlines all MIR Investments planned throughout the terms of the OSAs and allocates these MIR Investments across three categories: Capital, Repairs and Maintenance, and Strategic Non-Capital (i.e., investments in new initiatives that are neither Capital or Repairs and Maintenance expenses, which are expected to generate incremental gaming revenue through a new market or development of a new product). The MIR expenditures eligibility was extended to operating expenses, such as repairs and maintenance and strategic marketing programs, which the operations would have incurred in normal course of business. This decreases the capital expenditures requirement of the program. We must also submit to the BCLC an “Annual Business Plan” that outlines any changes to our anticipated MIR Investments and/or any new MIR Investments. The BCLC must consent to all of our planned MIR Investments and any changes that we wish to make to our planned MIR Investments over the course of the terms of the new OSAs. At the end of the terms of the OSAs, if we have not completed the planned MIR Investments, we will be required to repay a proportional amount of the commission paid to us by the BCLC under the MIR program. We do not anticipate not meeting our MIR requirements over the term of the OSA, however there can be no assurances of this.

From 2011 to 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. For the period from 2011 through March 31, 2018, we were reimbursed $207 million for qualifying capital expenditures incurred since the inception of the FDC and AFDC programs. 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.

Ontario

In Ontario, the provincial government regulates the operation of casinos, slot machine facilities and internet gaming through the AGCO. The AGCO regulates the sale, service, and consumption of alcoholic beverages and regulates certain aspects of casino gaming, charitable gaming, lotteries and horse racing within Ontario. Service providers are required to register with the AGCO pursuant to the Gaming Control Act (Ontario). In addition, registration with the AGCO is required for key gaming workers. The AGCO investigates all applicants for registration, including conducting background searches, and has discretion to grant or refuse registration.

Ontario COSAs

On May 9, 2017, we entered into a COSA for the Southwest Ontario properties, on May 30, 2017, we entered into a COSA for the North Ontario properties and on July 18, 2018, we entered into a COSA for the Central Ontario properties.

Under each COSA, we execute the operations relating to the gaming properties, while the OLG retains the authority to conduct and manage the gaming and lottery schemes carried out at the gaming properties. Each COSA contains customary representations and warranties regarding, among other things, corporate existence and

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qualifications; the due authorization, execution and delivery of each COSA; and each COSA being a valid and binding obligation of each party. Pursuant to the terms of the COSAs, we agree to realize gaming revenue in each operating year that is equal to or greater than the Threshold, or to pay to OLG the difference. The Threshold for each of the first ten 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. If the gaming revenue realized in such year is less than that threshold amount, we must pay to OLG the difference. As its fee for service under the COSAs, we are entitled to the payments of certain fixed amounts during each year, as well as to 70% of all gaming revenue that is in excess of such set threshold amount.

The gaming policies of the OLG, or the OLG Gaming Policies, are incorporated by reference into the COSAs. The OLG Gaming Policies have been developed by the OLG in furtherance of its conduct and management of gaming in respect of gaming facilities in the Province of Ontario, and provide comprehensive rules of play for casino games. In addition, pursuant to the terms of the COSAs, we have developed and will maintain operating procedures, which, together with the OLG Gaming Policies, constitute the operating manual for the gaming properties in Ontario. The OLG Gaming Policies specify certain standards as to casino games, customer feedback and responsible gaming, among other requirements. The OLG retains the right to review, revise and impose amendments to any existing OLG Gaming Policies or service provider policies. To ensure compliance, we will provide quarterly and annual reports to the OLG and will also be subject to audits and/or inspections by the OLG.

Under the COSAs, we also agree to indemnify and hold harmless the OLG and the Crown of the Province of Ontario from certain claims and losses, including (but not limited to) claims and losses relating to any inaccuracy or misrepresentation in the COSAs or any other document delivered to the OLG pursuant to the COSAs; a failure by us to comply with any obligation, covenant or agreement in the COSAs (the indemnification of OLG for which is absolute and not qualified by materiality); a failure by us to comply with any obligation, covenant or agreement in any agreements that are material to the COSAs; the development or operation of non-gaming services by us; or any surety, bond or guarantee provided by the OLG with respect to our obligations or liabilities under a casino head lease. In addition, the OLG agrees to indemnify us from certain claims and losses, including (but not limited to) claims and losses relating to any inaccuracy or misrepresentation in the COSAs or any other document delivered to us pursuant to the COSAs or a failure of the OLG to perform or comply with any obligations in the COSAs. The indemnification obligations of each party with respect to the Southwest Ontario properties are limited to $40 million (subject to increases for the inflation based on the increase in the consumer price index), the indemnification obligations of each party with respect to the North Ontario properties are limited to $24 million (subject to increases for the inflation based on the increase in the consumer price index), and the indemnification obligations of each party with respect to the Central Ontario properties are limited to $80 million (subject to increases for the inflation based on the increase in the consumer price index). The indemnification limitations set out in the COSAs are subject to customary carve outs, including (but not limited to) claims or losses directly or indirectly arising out of or resulting from the gross negligence, willful misconduct, criminal conduct or fraud of the indemnitor; claims by us for all or any portion of certain fees properly owing to us (including our service provider fee); and claims by OLG for certain top up amounts.

Each COSA provides that, without the consent of the OLG, no person may beneficially acquire, directly or indirectly, in the aggregate, more than 10% of our voting securities or the voting securities of one of our control persons, which we refer to as a Significant Interest. In addition, we are required to notify the OLG, within 30 days, when any person becomes the holder or beneficially acquires, directly or indirectly, in the aggregate, more than 5% of our voting securities or the voting securities of one of our a control persons. For the first five operating years, shareholders holding or beneficially owning a Significant Interest are unable to (i) dispose of all or a portion of their Significant Interest, or (ii) acquire or obtain any right to acquire a greater Significant Interest, in each case where a disposition or acquisition would result in a change of control of Gateway, unless prior written consent is obtained by the OLG (which can be withheld in the sole and absolute discretion of the OLG).

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After the first five operating years, the OLG agrees to not unreasonably withhold its consent to such dispositions or acquisitions, provided that it will be considered reasonable for the OLG to withhold its consent if the disposition or acquisition would, in the opinion of the OLG, (i) constitute a material adverse effect to the OLG (as set out below), (ii) cause a breach of the “concentration limits” set out in the COSAs, which restrict us from owning or obtaining the right to provide services in respect of more than 50% of the gaming regions or electronic gaming positions permitted in Ontario by the OLG, or (iii) own or operate gaming sites within a certain distance of the gaming facilities.

The OLG also agrees to not make changes to the boundaries of the applicable gaming zones or certain other changes that may impact gaming in each region until, depending on the nature of the change, either 10 years following the effective date, 20 years following the effective date, or for the duration of the term of the COSAs. While certain changes may be made after the mandated time periods, we may be entitled to compensation for such changes. Each COSA provides, for the benefit of the OLG, provisions for early termination following certain events of default, including (only after, in many cases, the end of a cure period) if: there is an inaccuracy or misrepresentation in any representation or warranty of ours in the COSAs or any document delivered pursuant to the COSAs that constitutes a material adverse effect; we fail to perform or comply with certain financial obligations; we fail to comply with its obligations under the COSAs (if such failure would constitute a material adverse effect); a breach of the security constraints occurs; we are insolvent; or we are convicted of a criminal offence (if that conviction would result in a material adverse effect). A material adverse effect includes an event that would be (i) materially adverse to the business of the OLG or the Ontario properties, (ii) materially adverse to the operation of the Ontario properties, (iii) contrary to the public interest in any material way or materially adverse or prejudicial to the reputation or integrity of the OLG, casino games conducted and managed by the OLG or the Ontario government, or (iv) adverse or prejudicial to OLG’s authority to conduct and manage gaming.

The COSAs provide that concurrently with the execution of each COSA, “step-in leases” must be entered into with the OLG for each of the owned Ontario properties. The step-in leases will come into effect if the COSAs are terminated by the OLG or otherwise expire in accordance with their terms. Each step-in lease provides the OLG with the option, exercisable in their sole and absolute discretion, to lease the fee simple Ontario properties for an initial term of four months, with options to extend the term for an aggregate of up to seven years (subject to the remaining terms of each COSA, in the case of early termination). Likewise, for any of the Ontario properties that are leased by us from a party other than the OLG, the COSAs provide that concurrently with the execution of each COSA “novation agreements” must be entered into with the OLG in respect of such leased properties. The novation agreements provide for similar rights to the step-in leases, permitting OLG to take over and novate (or cause to be taken over and novated) the lease agreements with any third-party landlord if the COSAs are terminated by the OLG or otherwise expire in accordance with their terms. For any of the Ontario properties that are leased or subleased by us from OLG, such lease or sublease provides similar abilities for OLG to terminate or assign such lease or sublease if the COSAs are terminated by the OLG or otherwise expire in accordance with their terms. In addition, we also agree to sell any gaming and non-gaming equipment and supplies relating to the Ontario properties that are owned by us at the time of termination to the OLG for fair market value. As security for these obligations, we granted the OLG a security interest in such assets.

Although we own the principal gaming and non-gaming equipment and supplies at each of the Ontario properties, we are required under each COSA to obtain the prior written consent from the OLG, which cannot be unreasonably withheld, before granting a security interest in the COSA or gaming and non-gaming equipment and supplies to a lender in connection with a financing arrangement. Any security interest will be subject to OLG’s right to purchase certain assets, as set out above, and cannot prevent the OLG from exercising its rights under each COSA.

Subject to the rules and policies set by the OLG and the AGCO and in the COSAs, we are permitted to increase gaming positions at the casinos, not to exceed the maximum number of gaming positions as set out in

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the COSA. If we wish to exceed the maximum number of gaming positions, we must seek the approval of OLG and such further governmental consents as may be required. During the term of the COSAs, we are also entitled to propose to OLG that a new casino be opened or that an existing casino be closed. The approval of OLG must be obtained for the closure of an existing casino. A proposal for a new casino must be approved by OLG and the Ontario provincial government.

The following tables set out, for each property located in the Southwest, North and Central Bundles, the contract term, the renewal term, authorized games and principal gaming equipment and supplies owned by us. The OLG does not own any of the principal gaming equipment and supplies at any of the Ontario properties.

	Southwest Ontario
	Western Fair District London Slots	Point Edward Casino	Woodstock Raceway Slots	Dresden Raceway Slots	Clinton Raceway Slots	Hanover Raceway Slots
Contract Expiry	March 31, 2037	March 31, 2037	March 31, 2037	March 31, 2037	March 31, 2037	March 31, 2037
Renewal Term	10 years	10 years	10 years	10 years	10 years	10 years
Authorized Games	Slot machines and electronic table games	Slot machines, live table games and electronic table games	Slot machines and electronic table games	Slot machines and electronic table games	Slot machines and electronic table games	Slot machines and electronic table games
Equipment & Supplies	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips

	North Ontario			Central Ontario
	Thunder Bay Casino	Sault Ste. Marie Casino	Sudbury Downs Slots	Gateway Innisfil	Casino Rama
Contract Expiry	March 31, 2037	March 31, 2037	March 31, 2037	July 31, 2041	July 31, 2041
Renewal Term	10 years	10 years	10 years	Varies	Varies
Authorized Games	Slot machines, live table games and electronic table games	Slot machines, live table games and electronic table games	Slot machines and electronic table games	Slot machines and electronic table games	Slot machines, live table games and electronic table games
Equipment & Supplies	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips	Slot Machines & Electronic Table Games Roulette Wheels / Balls Electronic Equipment Value & Non-Value Chips

The Permitted Capital Expenditures Allowance

Pursuant to the COSAs we are entitled to Permitted Capital Expenditures Allowances (as described herein), payable by the OLG, for a proportion of permitted capital expenditures that we incur in the various gaming zones

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located in the Southwest, North, and Central Bundles. The amount of the Permitted Capital Expenditure Allowances payable to us by the OLG in our first operating year on a pro-rated basis from the date of acquisition was $6.4 million as specified in the COSAs on the basis of gaming zone-specific schedules determined by the OLG. The Permitted Capital Expenditure Allowances payable in subsequent operating years will increase by an inflation factor calculated by dividing (i) the reported annual average value of the Consumer Price Index for Canada for the most recently reported calendar year at the time that such determination is being made by (ii) the reported annual average value of the Consumer Price Index for Canada for the year immediately preceding the most recently reported year referred to in clause (i).

Alberta

In Alberta, the provincial government, through the AGLC, licenses the operation of casinos to third-party service providers, including us. The AGLC is responsible for the licensing and regulation of gaming and liquor within Alberta. We operate the Starlight Casino Edmonton and the Grand Villa Casino Edmonton under casino property licenses with the AGLC. In return for operating the properties, we receive a certain percentage of Win, which is shared with the Alberta Lottery Fund/AGLC and a designated charity (which varies from time to time).

AGLC registration is required for our key gaming workers. The AGLC conducts background checks on all officers, directors, shareholders holding 5% or more of our voting shares, applicants for registration and any other person the AGLC considers necessary or appropriate, and has the discretion to grant or refuse registration. Any sale, assignment or transfer of a 5% or greater interest in Gateway must be disclosed to the AGLC within 10 business days after the effective date of the transaction and approved by the board of the AGLC. Prior approval of the AGLC is required for the acquisition of any “financial interest” in us, our business or in a property to which our AGLC license relates, in a manner other than by way of a sale, assignment or transfer. See “Common Share Constraints Required by Gaming Regulators and Change of Control”.

Pursuant to our license with the AGLC for the Starlight Casino Edmonton, we earn a service provider’s commission for slot machine (15% of Slot Win), craps (75% of Table Win), poker (75% of Poker Rake) and table games (50% of Table Win). The licenses for Starlight Casino Edmonton and Grand Villa Casino Edmonton expire on August 31, 2022.

Each of our licenses for the Starlight Casino Edmonton and the Grand Villa Casino Edmonton allows us to operate the applicable premises for the purpose of conducting licensed casino gaming events in accordance with the provisions of the GCLA, the Gaming and Liquor Regulation, AGLC policies and all other conditions prescribed by the board of the AGLC, subject to certain restrictions. Under the terms of the licenses, the operation of casino gaming terminals is permissible Monday to Sunday, up to a maximum of 17 consecutive hours, commencing no earlier than 10:00 a.m. and ending no later than 3:00 a.m. and only on days that there is a licensed casino event in the property. Poker at each property is permissible on flexible hours and table games are permissible to be operated Monday to Sunday, up to a maximum of 14 consecutive hours, commencing no earlier than 10:00 a.m. and ending no later than 2:00 a.m. Each property is required to be closed on Christmas Day.

The AGLC has the right to suspend or cancel our licenses for the Grand Villa Casino Edmonton or the Starlight Casino Edmonton for certain reasons, including: (i) failure to comply with the GCLA or an order of the AGLC; (ii) failure to comply with any condition imposed on our licenses; (iii) if we are sold, or if we sell or assign our business or any of our casino property licenses, without the prior consent of AGLC; or (iv) the criminal conviction of Gateway or any of our principals or senior employees.

Corporate Structure

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

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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.

At a meeting of shareholders held on April 20, 2018, the existing shareholders approved, among other things, the LTIP (as defined herein) for the benefit of selected employees, officers, and directors of Gateway to take effect following completion of this offering, and further amendments to our articles prior to the completion of this offering to comply with updated restrictions on transfer of common shares contained in certain of our existing casino operating services agreements.

Our principal executive office is located at 4331 Dominion Street, Burnaby, British Columbia V5G 1C7. Prior to completion of this offering, our registered office will be located at Unit 2200 Guinness Tower, 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9.

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The following organizational chart illustrates the current and anticipated beneficial ownership of common shares by principal shareholders upon completion of this offering, assuming the underwriters do not exercise their option to purchase additional shares. The organizational chart also illustrates the material components of our current structure, which will be unaffected by the completion of this offering. The jurisdiction of incorporation or organization, as applicable, are indicated in parentheses.

Notes:    (1) It is expected that, following this offering, a total of                 common shares (     %) will be held by the Catalyst Capital Funds, which are affiliated limited partnership funds managed, controlled and directed by Catalyst.

(2) It is expected that, following this offering, a total of                 common shares (     %) will be held by Top V New World Holdings, LLC and that BlackRock, Inc., an affiliate of Top V New World Holdings, LLC, will be the beneficial holder of such shares.

(3) With the exception of Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley (which are now held by 1144808 B.C. Ltd., 1144809 B.C. Ltd. and 1144803 B.C. Ltd., respectively, pursuant to long term leases), Chances Courtenay, Chances Campbell River and Playtime Gaming Victoria (which are held by Playtime Gaming Group Inc.), Chances Playtime Abbotsford (which is held by Abby Properties Ltd.) and Cascades Casino Kamloops (which is held by 0998282 B.C. Ltd.), all of our gaming properties are held by us.

(4) 0998282 B.C. Ltd. is the registered owner of the lands and premises on which the Cascades Casino Kamloops is located and was appointed to hold legal title for us pursuant to a nominee agreement between the Company and 0998282 B.C. Ltd.

(5) 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 Inc.) 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.

(6) Under the Sale and Leaseback Transactions, 1144808 B.C. Ltd., 1144809 B.C. Ltd. and 1144803 B.C. Ltd, entered into long-term leases as tenants in respect of Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley, respectively, for and on behalf of us pursuant to three separate nominee agreements.

(7) Employs Casino Rama employees.

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Environmental Matters

We are subject to environmental legislation, including federal and provincial statutes and regulations and municipal bylaws, that govern activities or operations that may have adverse environmental effects, including the presence or migration of contaminants at or from our properties. We endeavor to maintain compliance with environmental laws, but, from time to time, current or historical operations on, or adjacent to, our properties may have resulted or may result in non-compliance with environmental laws or other liability for the investigation, remediation, monitoring or other work related to contaminants, including hazardous or toxic substances or wastes pursuant to environmental laws or common law obligations. Compliance with environmental laws or undertaking the investigation, remediation, monitoring or other work related to contaminants can require significant expenditures. Failure to comply with such laws could result in material fines, penalties and other liabilities or expenditures. We believe that we are in substantial compliance with current environmental laws and are not currently aware of any material environmental liabilities. However, environmental laws continue to evolve in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. Environmental requirements and potential liabilities related to the development and redevelopment of properties can result in material expenditures. No assurance can be given that environmental issues relating to currently unknown matters will not require investigation, assessment, remediation, other work or material expenditures.

Employees

Specialized Skills and Knowledge

Over the last 26 years, we have developed and implemented recruitment strategies, screening processes and training programs that ensure that our employees have, and can continuously develop, the specialized skills, knowledge and experience necessary for us to continue to succeed in the Canadian gaming industry. We have recruited business professionals to supervisory and senior management positions who possess a wide range of valuable experience in marketing, business and property development and the gaming industry. We also focus on developing talent from within, by encouraging all of our employees to embrace new responsibilities and challenges within our business. We pride ourselves on having established a collegial and supportive culture that has resulted in positive employee relations and high retention rates, and we believe that this culture will reduce labor disputes and related costs over the long-term.

Unions and Labor Relations at Properties

As of October 31, 2018, our team comprised approximately 8,500 employees, with approximately 4,900 of our employees belonging to various unions. We have no unionized employees at the Chances Squamish, Chances Mission, Chances Playtime Courtenay, Playtime Gaming Victoria, Western Fair District London Slots, Hanover Raceway Slots, Clinton Raceway Slots or Woodstock Raceway Slots.

The vast majority of our unionized employees are front-line staff, such as dealers, slot machine attendants and F&B servers. At our Grand Villa Casino Burnaby, Starlight Casino Edmonton and Grand Villa Casino Edmonton, we also have some unionized front-line supervisors. Some of our security staff are also unionized workers. Our gaming properties are regulated by the labor and employment legislation applicable to the province in which each property is located.

We have had a historically strong relationship with the British Columbia Government and Service Employees Union, or BCGEU, which represents the majority of our unionized employees in British Columbia. The collective agreements for certain unionized employees at our Grand Villa Casino Burnaby property and at the properties comprising our Thompson-Okanagan segment expired in 2017.

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 these 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.

On December 9, 2018, and prior to any strike action, we tentatively ratified our collective bargaining agreements with the BCGEU with respect to our Grand Villa Casino Burnaby and Starlight Casino New Westminster.

Surveillance operators at our Cascades Casino Penticton are represented by the Canadian Office and Professional Employees union, or COPE. Surveillance operators at our Lake City Casino Vernon recently voted to decertify from this union. Surveillance operators at our Grand Villa Casino Burnaby are represented by Unifor and certain staff at our Chances Playtime Campbell River and Chances Playtime Abbotsford are represented by the United Steelworkers union, or USW. Surveillance operators at our Cascades Casino Penticton may refuse to cross the picket line during the work stoppage currently affecting that property.

Except as described above and for a strike at Chances Playtime Campbell River that occurred prior to our purchase of that property (October 2014–January 2015), we have not had work stoppages at any of our British Columbia properties since 2001.

In Ontario, we have established relationships with the unions, United Steelworkers, or USW, Teamsters Canada, or Teamsters, and Unifor, which represent many of the employees at our transitioned properties. The previous collective agreement with Teamsters for employees working as security officers at Point Edward Casino expired on April 30, 2017 (prior to the transition of the property from the OLG) and a new collective agreement was reached and ratified in October 2017. The collective agreements with Unifor represent a significant number of our employees in Ontario, with certifications at Point Edward Casino, Dresden Raceway Slots, Sudbury Downs Slots, Innisfil and Casino Rama. The balance of our unionized Ontario employees are represented by USW, which represents certain employees at our Thunder Bay Casino, Sault Ste. Marie Casino and Sudbury Downs Slots. To the best of our knowledge, there have not been any work stoppages at any of the Ontario properties since 2001, except for a labor disruption at Sudbury Downs Slots that occurred prior to our purchase of that operation (from September 2015–October 2015).

Our relationship with The United Food and Commercial Workers Union, or UFCW, which represents the unionized employees at the Starlight Casino Edmonton and Grand Villa Casino Edmonton, has greatly improved since the strike for a first collective agreement at the Starlight Casino Edmonton (September 2006–July 2007).

Although management does not anticipate encountering difficulty in reaching agreements with the non-striking unions that represent our employees, should an agreement not be reached, it may result in a work stoppage or interruption to the business of that specific operation.

See “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.”

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The table below provides a summary of the collective bargaining units in place, and the status of negotiations, as of the date of this prospectus.

Property	Employee Group	Union	Number of Unionized Employees (approx.)(1)	Collective Agreement Expiry Date	Status
Grand Villa Casino Burnaby	Front-line staff Front-line supervisors	BCGEU	900	December 31, 2017	Tentatively ratified new agreement in December 2018.
	Surveillance operators	Unifor	20	March 31, 2019	No current activity.
Starlight Casino New Westminster	Front-line staff Security officers	BCGEU	450	March 31, 2018	Tentatively ratified new agreement in December 2018.
Cascades Casino Langley	Surveillance operators	COPE (MoveUp)	10	New certification	Collective bargaining tentatively scheduled for December 2018.
Thompson-Okanagan Segment
Cascades Casino Penticton	Surveillance operators	COPE (MoveUp)	10	May 31, 2018	In communication with union to begin negotiation.
	Front-line staff Security officers	BCGEU	660(2)	September 5, 2021	Ratified new agreement in November 2018.
Cascades Casino Kamloops	Front-line staff Security officers	BCGEU	660(2)	September 5, 2021	Ratified new agreement in November 2018.
Playtime Casino Kelowna	Front-line staff Security officers	BCGEU	660(2)	September 5, 2021	Ratified new agreement in November 2018.
Lake City Casino Vernon	Front-line staff Security officers	BCGEU	660(2)	September 5, 2021	Ratified new agreement in November 2018.

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Property	Employee Group	Union	Number of Unionized Employees (approx.)(1)	Collective Agreement Expiry Date	Status
CGC Segment
Chances Playtime Abbotsford	Front-line staff Security officers	USW	30	February 28, 2020	No current activity.
Chances Playtime Campbell River	Front-line staff Security officers	USW	30	January 22, 2019	Bargaining tentatively scheduled for February 2019.
Ontario Segment
Point Edward Casino	Front-line staff	Unifor	210	November 12, 2020	No current activity.
	Security officers	Teamsters	30	October 15, 2019	No current activity.
Dresden Raceway Slots	Front-line staff	Unifor	35	November 11, 2020	No current activity.
Thunder Bay Casino	Front-line staff	USW	130	October 31, 2019	No current activity.
	Clerical staff	USW	10	October 31, 2019	No current activity.
Sault Ste. Marie Casino	Front-line staff	USW	110	January 31, 2020	No current activity.
	Surveillance operators	Teamsters	10	February 28, 2019	No current activity.
Sudbury Downs Slots	Front-line staff	Unifor	50	May 31, 2021	No current activity.
	Security officers	USW	20	March 31, 2019	No current activity.
Gateway Innisfil	Security	Unifor	35	September 30, 2021	No current activity
Casino Rama	Front line staff	Unifor	1460	January 23, 2019	Bargaining tentatively scheduled for January 2019.
Edmonton Segment
Grand Villa Casino Edmonton	Front-line staff Front-line supervisors Security officers	UFCW	280	March 31, 2019	No current activity.

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Property	Employee Group	Union	Number of Unionized Employees (approx.)(1)	Collective Agreement Expiry Date	Status
Starlight Casino Edmonton	Front-line staff Front-line supervisors Security officers	UFCW	415	November 1, 2018	Bargaining proposed for February 2019.

Notes:    (1) Number of unionized employees at individual sites are approximate and as of September 30, 2018.

(2) Number of unionized employees represented by BCGEU at Cascades Casino Kamloops, Playtime Casino Kelowna, Lake City Casino Vernon and Cascades Casino Penticton presented as an aggregate of all unionized employees represented by BCGEU at our Thompson-Okanagan region properties.

Legal Proceedings

We are involved, from time to time, in a variety of litigation and regulatory proceedings arising out of our business, including actions related to patron claims, BCLC’s Voluntary Self-Exclusion Program, labor and employees, regulatory compliance and other operational matters. We are not a party to any legal proceeding or regulatory actions, the outcome of which, in the opinion of management, would have a material adverse effect on our business or financial condition. 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. There can be no assurance that our established accruals or insurance will cover all claims that may be asserted against us. See “Risk Factors—Risks Related to Our Business—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.”

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MANAGEMENT

Executive Officers and Directors

The following table sets forth certain information relating to our directors and executive officers as of the date of this prospectus. Unless otherwise stated, the business address for our directors and officers is c/o Gateway Casinos & Entertainment Limited, 4331 Dominion Street, Burnaby, British Columbia, Canada V5G 1C7.

Name	Age		Position
Executive Officers
Tony Santo		57	President, Chief Executive Officer and Director
British Columbia, Canada
Bradley Hutchings		53	Chief Financial Officer
British Columbia, Canada
Bradley Bardua		51	Chief Administrative Officer
British Columbia, Canada
Jagtar Nijjar		52	Executive Vice President, Development and Construction (West)
British Columbia, Canada
Tolek Strukoff		37	Chief Legal Officer and Corporate Secretary
British Columbia, Canada
Terry McInally		46	Chief Compliance and Risk Officer / Chief Information Officer
Ontario, Canada
Carrie Kormos		45	Chief Marketing and Communications Officer
Ontario, Canada
Robert Ward		49	Executive Vice President and Managing Director of Casinos, Western Canada
British Columbia, Canada
Keith Andrews		58	Senior Vice President and Managing Director of Casinos, Ontario
Ontario, Canada
Scott Phillips		47	Senior Vice President, Human Resources
British Columbia, Canada
Queenie Wong		35	Senior Vice President, Finance
British Columbia, Canada
Hargo Roopra		40	Senior Vice President, Operations and Marketing Analytics
British Columbia, Canada
Board of Directors
Gabriel de Alba		45	Executive Chairman and Director
Ontario, Canada
Newton Glassman(1)		54	Director
Ontario, Canada
Michael C. Burns		79	Director
British Columbia, Canada
Lyle Hall		62	Director Nominee
Ontario, Canada
Olga Ilich		67	Director Nominee
British Columbia, Canada
Dr. Michael Percy		70	Director Nominee
Alberta, Canada
Michael Plotzker(2)		41	Director Nominee
Ontario, Canada

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Notes:    (1) Mr. Glassman will resign as one of our directors immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. Mr. Glassman will be replaced on our board of directors by Michael Plotzker, the replacement nominee of Catalyst.

(2) Mr. Plotzker will replace Mr. Glassman as the replacement nomimee of Catalyst immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part.

Tony Santo, President, Chief Executive Officer and Director

Mr. Santo has been a Director since July of 2017, and our President and Chief Executive Officer since October of 2013. Prior to joining us, Mr. Santo served as the President and Chief Executive Officer of Santo Gaming LLC from July of 2007 to October of 2013. He has extensive experience in the gaming industry over the past 35 years. From June of 2005 to January of 2007, Mr. Santo served as Senior Vice President of Operations, Products and Services for Harrah’s Entertainment, Inc. From May of 2003 to May of 2005, Mr. Santo served as Senior Vice President of Western and Mid-South Regions for Caesars Entertainment Inc. Prior to his senior management role at Caesars, Mr. Santo served as President of Paris Las Vegas, Bally’s Las Vegas, Las Vegas Hilton, Reno Hilton Casino (now the Grand Sierra Resort) and Flamingo Reno. Mr. Santo has previously served on the boards of Las Vegas Events, the Culinary Training Academy of Las Vegas, UNLV Harrah Hotel College Alumni Association, the Las Vegas Convention and Visitors Authority and the Reno-Sparks Convention and Visitors Authority. Mr. Santo was the recipient of the 1998 Hotelier of the Year by the Nevada Hotel Motel Association. Mr. Santo has also been honored with knighthood by the Opportunity Village of Las Vegas. Mr. Santo earned a Bachelor of Science Degree in Hotel Administration at the University of Nevada, Las Vegas.

Bradley Hutchings, Chief Financial Officer

Mr. Hutchings is our Chief Financial Officer, a position he has held since December 13, 2018. Prior to joining us, Mr. Hutchings spent the last 11 years as a Partner with Deloitte LLP providing professional services. Mr. Hutchings has over 20 years’ experience in the gaming and hospitality industries. Prior to Deloitte, Mr. Hutchings was the Chief Financial Officer for Fallsview Casino Resort and Casino Niagara. Mr. Hutchings is a Chartered Professional Accountant, a Chartered Accountant and holds a MBA from McMaster University and a Bachelors of Business Administration from Brock University.

Bradley Bardua, Chief Administrative Officer

Mr. Bardua is our Chief Administrative Officer. Prior to holding this position, Mr. Bardua was our Chief Financial Officer (since December 1, 2016). Mr. Bardua has over 25 years of senior level financial leadership of both public and private companies, including extensive experience raising equity and debt capital in both public and private sectors. From 2002 to 2007, Mr. Bardua also served as the Chief Financial Officer of Gateway Casinos Income Fund, a TSX-listed predecessor entity to us that was acquired and taken private in 2007 by Macquarie Group Limited and Publishing and Broadcasting Limited (now known as Consolidated Media Holdings Limited), at a significant premium to the then trading price of its units on the TSX. Prior to rejoining us, Mr. Bardua was the Chief Executive Officer at Endurance Wind Power from January of 2016 to October of 2016 and its Chief Financial Officer from June of 2014 to December of 2015, a global leader in distributed wind. He also served as the Chief Financial Officer of TSX-listed Avigilon Corporation from January of 2012 to May of 2014, a global company that designs and manufactures high-definition surveillance systems. Mr. Bardua is a Chartered Professional Accountant and holds a Bachelor of Business Administration from Simon Fraser University.

Jagtar Nijjar, Executive Vice President, Development and Construction (West)

Mr. Nijjar has held various management positions during his 22-year tenure with us. Mr. Nijjar has served as our Manager of Casino Surveillance/Security and as Casino Manager of various former and current Gateway

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properties, including the Mandarin Centre, the Burnaby Casino (the predecessor to the Grand Villa), Royal Towers and Royal City Star. Mr. Nijjar has been involved in the planning, development and operation of many of our current properties, such as the Grand Villa Casino Burnaby, the Starlight Casino New Westminster, the Cascades Casino Langley, the Playtime Casino Kelowna and the Lake City Casino Vernon. Mr. Nijjar was promoted to his current position as our Executive Vice President, Development and Construction (West) in 2018. Mr. Nijjar holds a Computer Sciences/General Diploma from Langara College in Vancouver, British Columbia.

Tolek Strukoff, Chief Legal Officer and Corporate Secretary

Mr. Strukoff is our Chief Legal Officer and Corporate Secretary. Mr. Strukoff was appointed as the Chief Legal Officer and Corporate Secretary on June 6, 2016. Prior to joining us, Mr. Strukoff practiced corporate and commercial law with Lawson Lundell LLP. Mr. Strukoff also served as the Deputy General Counsel at UrtheCast Corp. from September of 2014 to May of 2016, a technology company listed on the TSX, and as the Director of Legal Affairs at Westport Fuel Systems Inc. from March of 2012 to August of 2014, a technology company listed on the TSX and NASDAQ. Mr. Strukoff holds a Bachelors of Business Administration (Honors) from Simon Fraser University in Burnaby, British Columbia and an LL.B from the University of Victoria, in Victoria, British Columbia.

Terry McInally, Chief Compliance and Risk Officer and Chief Information Officer

Mr. McInally is our Chief Compliance and Risk Officer and Chief Information Officer. Mr. McInally joined us on April 24, 2017, bringing to us over 20 years of risk management, governance, strategy and compliance experience. Prior to joining us, Mr. McInally was a Partner and National Gaming Practice Leader at Richter Advisory Group from February of 2014 to April of 2017, the National Gaming Practice Leader for PwC Canada from June of 2012 to February of 2014, and a former executive at the AGCO from May of 2006 to June of 2012. Mr. McInally holds a Bachelor’s Degree with Honours from the University of Toronto and is a Chartered Professional Accountant and Certified Information Systems Auditor. Prior to joining us, Mr. McInally served as a consultant for us for two years, assisting us with the development of our bids in conjunction with the Ontario modernization plan.

Carrie Kormos, Chief Marketing and Communications Officer

Ms. Kormos is our Chief Marketing and Communications Officer and joined us in October of 2016 as our Senior Vice President, Marketing and Communications, bringing 17 years of industry experience. She has worked across Canada and the United States advising clients on developing gaming opportunities as well as providing sound strategic communications, marketing and issues counsel to management teams. Ms. Kormos has served as Vice President Public Relations at Enterprise Canada, was National Director of Brand Marketing at Magna Entertainment and was Principal at Navigator Ltd. from February of 2012 to October of 2016, a leading public strategy and communications firm. Prior to joining us, Ms. Kormos served as a consultant for us for two years, advising us on communications, branding and GR along with the development of our bids in conjunction with the Ontario modernization process. Ms. Kormos holds a Bachelor of Arts in Economics from the University of Western Ontario and a Certificate in International Economics from the Université Canadienne en France in Nice.

Robert Ward, Executive Vice President and Managing Director of Casinos, Western Canada

Mr. Ward joined us in July of 2013 and currently serves as our Executive Vice President and Managing Director of Casinos, Western Canada. Mr. Ward has previously held the positions of Director of Corporate F&B, Director of Property Development, Vice President of Operations and Senior Vice President, Operations with us. Mr. Ward has over 20 years of industry experience, with past senior executive positions at Points West Hospitality Group, Sequoia Enterprises, Keg Restaurants and The Urban Project Group. He has also acted as an advisor to the President of the Tampa Bay Lightning.

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Keith Andrews, Senior Vice President and Managing Director of Casinos, Ontario

Mr. Andrews has been our Senior Vice President and Managing Director of Casinos, Ontario since July of 2017. Mr. Andrews has over 23 years of management experience in the Ontario gaming industry. Mr. Andrews joined us on July 16, 2014. Prior to joining us, Mr. Andrews served as President of The Winterton Group from April of 2010 to July of 2014. Mr. Andrews started his career as a member of the opening team for Ontario’s first resort gaming property in 1994. Since then, Mr. Andrews has held a number of senior corporate and operational positions with Windsor Casino Limited. During his time with Windsor Casino Limited, Mr. Andrews was involved with many projects, including leading a team in the development of the Northern Belle Riverboat casino, as a member of the opening team of Casino Windsor and as a member of the team in charge of the redevelopment and construction of Caesars Windsor. Prior to joining us, Mr. Andrews served as a consultant for us, assisting us with the development of our bids in conjunction with the Ontario modernization plan.

Scott Phillips, Senior Vice President, Human Resources

Mr. Phillips has served as our Senior Vice President, Human Resources since October of 2016. Prior to serving in this role, Mr. Phillips served as our Vice President, Human Resources from August of 2013 to October of 2016. Mr. Phillips has over 20 years of industry experience, and has held positions at JD Sweid Foods, Sodexo Canada, Abitibi-Consolidated and TimberWest Forest. Mr. Phillips holds a Bachelor of Business Administration from Simon Fraser University.

Queenie Wong, Senior Vice President, Finance

Ms. Wong has served as our Senior Vice President, Finance since March of 2018. Prior to serving in this role, Ms. Wong served as our Vice President, Finance from July of 2016 to February of 2018, and as our Director, Finance from August 2011 to July 2016. Prior to joining us, Ms. Wong was a senior manager at PricewaterhouseCoopers LLP. Ms. Wong is a Chartered Professional Accountant and holds a Bachelor of Commerce with Honours from the University of British Columbia.

Hargo Roopra, Senior Vice President, Operations and Marketing Analytics

Mr. Roopra has served as our Senior Vice President, Operations and Marketing Analytics since November 2018. Prior to serving in this role, Mr. Roopra served as our Vice President, Operations and Marketing Analytics, Executive Director of Operations, Director of Operations, and Director of Finance within the last five years. Mr. Roopra has been with Gateway for over ten years. He holds a Bachelor of Commerce from the University of British Columbia.

Gabriel de Alba, Executive Chairman and Director

Mr. de Alba is a Managing Director and Partner of Catalyst, and he joined Catalyst in October of 2002. As one of Catalyst’s representatives, Mr. de Alba is our Executive Chairman and a Director. Mr. de Alba’s responsibilities at Catalyst have included acting as a director or senior officer of various Catalyst portfolio companies, including Frontera Energy Corporation TSX:FEC (formerly Pacific Exploration and Production), Geneba Properties, Cable Satisfaction International Inc. / Cabovisão, Therapure Biopharma Inc., World Color Press Inc., and Sonar Entertainment Inc. Catalyst and funds managed by it have, since 2002, invested in numerous distressed and/or under-valued companies, including (in addition to the portfolio companies mentioned above) AT&T Canada Inc. (Allstream), Call-Net Inc., Stelco Inc., IMAX Corporation, Countryside Power Income Fund, Canwest, YRC Worldwide Inc. and Tervita. Prior to joining Catalyst at its inception in 2002, Mr. de Alba worked at AT&T Latin America. Mr. de Alba was a founding member of the Bank of America International Merchant Banking Group and, prior to that, worked in Bankers Trust’s New York Merchant Banking Group.

Mr. de Alba is fluent in five languages and holds a double B.S. in Finance and Economics from the NYU Stern School of Business and a Master of Business Administration from Columbia University. He has also

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completed graduate courses in Mathematics, Information Technology and Computer Sciences at Harvard University.

Michael C. Burns, Director

Mr. Burns has served on our Board of Directors since August 2010. Mr. Burns is an experienced director and senior executive. He has served at the highest levels of major public and private corporations in the energy, technology, finance and mining sectors working both within Canada and abroad. Mr. Burns has served as Chairman of Sentinel Strategies Ltd. since February of 1983. He has been recognized for his community service locally, provincially and federally. Mr. Burns holds a Bachelor of Arts in Economics from the University of Manitoba. He resides in Vancouver.

Newton Glassman, Director

Mr. Glassman is the Founder, Managing Partner and acting Chief Executive Officer of Catalyst. He devotes all of his working time to Catalyst, investment funds managed by Catalyst and assets held by those investment funds. Mr. Glassman was formerly a director of FrontPoint Partners, LLC. He also serves, or has formerly served, as a director or senior officer of various Catalyst portfolio companies, including Callidus Capital Corporation, Cable Satisfaction International Inc. / Cabovisão and Therapure Biopharma Inc. Mr. Glassman was previously a Managing Director at Cerberus Capital Management LP where he was involved in several Canadian restructurings, including Loewen Inc., Livent Corporation of Canada, Inc., Philip Services Corporation, GST Telecommunications, Inc., Pacifica Papers, Inc. and AT&T Canada Inc. Catalyst and Catalyst Capital Funds have, since 2002, invested in numerous distressed and/or undervalued companies. Mr. Glassman holds a Master of Business Administration from The Wharton School of the University of Pennsylvania, a law degree from the Faculty of Law, University of Toronto and an undergraduate degree from the University of Toronto. Mr. Glassman will resign as one of our directors immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. Mr. Glassman will be replaced on our board of directors by Michael Plotzker, the replacement nominee of Catalyst.

Lyle Hall, Director

Mr. Hall is expected to be appointed to our Board of Directors immediately following the completion of this offering, subject to regulatory approval. Mr. Hall both formed and worked as the President and Managing Director of HLT Advisory Inc. from August of 2005 to May of 2017. Prior to his time at HLT Advisory Inc., Mr. Hall was the National Director of KPMG Canada’s Hospitality, Leisure & Tourism practice, based in Toronto. Through HLT and KPMG, Mr. Hall has been intimately involved in the evolution of land-based casino gaming in Canada having advised senior management and the boards of most provincial gaming corporations. Mr. Hall’s past consulting experience includes not only a wide range of gaming projects but related and stand-alone accommodation, entertainment, public infrastructure and tourism projects for both the public and private sector. He has worked in every province across Canada as well as in Europe, Asia, the Caribbean, the United States and Africa. He holds a Bachelor of Commerce (marketing) degree from the University of Calgary, is a Certified Management Consultant and is a member of the International Society of Hospitality Consultants. Mr. Hall is also active in the arts and heritage areas where he serves as a Trustee of the Shaw Festival Theatre in Niagara-on-the-Lake and on the board of The Niagara Foundation.

Olga Ilich, Director

Ms. Ilich is expected to be appointed to our Board of Directors immediately following the completion of this offering, subject to regulatory approval. Ms. Ilich has been in the development and construction business in British Columbia for over 35 years. She has served as the President of Suncor Developments Ltd. from July of 1997 to present, specializing in the building of single-family homes, multi-family housing and commercial projects. From 2005 to 2009, Ms. Ilich was an elected member of the Legislative Assembly of British Columbia.

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During that time, she served as the Minister of Tourism, Sport, and the Arts, and the Minister of Labour and Citizens’ Services. Ms. Ilich has extensive board experience, having served most recently as the Chair of the Board of Destination Canada. She has also been a member of the board of directors of the Vancouver Symphony Orchestra, a director of the Vancouver International Airport Authority, a director of UBC Properties Investment Ltd., a director of Discovery Parks, a director of the British Columbia Achievement Foundation, the President and a director of the Urban Development Institute, Pacific Region and the Chair of the British Columbia Assessment Authority. In 2012 Ms. Ilich was co-chair, along with the Mayor of Vancouver, of the City of Vancouver’s Affordable Housing Task Force. In 2009, Ms. Ilich was chosen as one of Canada’s Most Powerful Women: Top 100 Award winner by the Women’s Executive Network after a 35-year career at senior levels in both business and government. Ms. Ilich has a Master of Business Administration from the Memorial University of Newfoundland, a Master of Arts from the University of Manitoba and a Bachelor of Arts degree from the University of British Columbia.

Dr. Michael Percy, Director

Dr. Percy is expected to be appointed to our Board of Directors immediately following the completion of this offering, subject to regulatory approval. Dr. Percy also serves as an Independent Director of K-Bro Linen Inc. Before joining us, Dr. Percy most recently served as the Chief of Staff to Alberta Premier Jim Prentice from September of 2014 to May of 2015. Dr. Percy also served as a director for ATB Financial, Epcor Utilities Inc., Matrikon, Sawridge, Timber Holdings, Alberta Life Sciences Institute and Alberta Science and Research Authority. Additionally Dr. Percy served on the Investment Advisory Board of the Workers’ Compensation Board of Alberta. As both a Professor at the University of Alberta and a Dean for three consecutive terms at the Alberta School of Business, Dr. Percy’s impact on the academic community is notable. He has contributed research through commentary and authorship on a variety of public policy, international trade and economic developmental issues. Dr. Percy has also served as a consultant and review panelist for a number of government summits and agencies and has been an active guest speaker and instructor for professional development programs. He currently serves as Academic Director for the Directors Education Program at the University of Alberta offered by the Institute of Corporate Directors and Rotman. Dr. Percy received his Bachelor of Arts (Honours) from the University of Victoria and his Master of Arts and Doctoral Degree in Economics from Queen’s University.

Michael Plotzker, Director Nominee

Mr. Plotzker has been an employee of Catalyst since 2014. Prior to joining Catalyst, Mr. Plotzker worked at Capstone Advisory Group. Mr. Plotzker is a CFA charterholder and holds a BBA from Emory University and an Master of Business Administration from The Wharton School of the University of Pennsylvania. Mr. Plotzker will replace Mr. Glassman as the replacement nominee of Catalyst immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part.

Foreign Private Issuer Status

The NYSE Listing Rules include certain accommodations in the corporate governance requirements that allow foreign private issuers, such as us, to follow home country corporate governance practices in lieu of the otherwise applicable corporate governance standards of the NYSE. The application of such exceptions requires that we disclose any significant ways that our corporate governance practices differ from the NYSE Rules that we do not follow. When our common shares are listed on the NYSE, we intend to continue to follow Canadian corporate governance practices in lieu of the corporate governance requirements of the NYSE in respect of the quorum requirement for meetings of our common shareholders as described below.

Corporate Governance

We are incorporated under the CBCA. Our governing documents consist of articles of incorporation, or articles, and bylaws, each of which will be amended and restated in connection with the offering.

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Section 310.00 of the NYSE Listing Rules generally requires that a listed company’s bylaws provide for a quorum for any meeting of the holders of our common shares that is sufficiently high to ensure a representative vote but not less than 33^1/3% of the outstanding shares of our voting stock. Pursuant to the NYSE Listing Rules we, as a foreign private issuer, have elected to comply with practices that are permitted under Canadian law in lieu of the provisions of Section 310.00 of the NYSE Listing Rules.

Our bylaws, as they will be amended and restated in connection with this offering, will provide that a quorum of shareholders shall be the holders who, in the aggregate hold at least 25% of the voting rights attached to issued shares entitled to be voted at the meeting, provided that at least two shareholders are represented in person or by proxy at such meeting.

Except as discussed elsewhere in this prospectus, we intend to comply with the rules generally applicable to U.S. domestic companies listed on the NYSE. We may in the future decide to use other foreign private issuer exemptions with respect to some of the other NYSE listing requirements. Following the requirements of applicable Canadian laws, as opposed to the requirements that would otherwise apply to U.S. domestic issuer listed on the NYSE, may provide less protection than is accorded to investors under the NYSE Listing Rules applicable to U.S. domestic issuers.

The Canadian Securities Administrators have issued corporate governance guidelines pursuant to National Policy 58-201—Corporate Governance Guidelines, or the Corporate Governance Guidelines, together with certain related disclosure requirements pursuant to National Instrument 58-101—Disclosure of Corporate Governance Practices, or NI 58-101. The Corporate Governance Guidelines are recommended as best practices for Canadian reporting issuers to follow. We recognize that good corporate governance plays an important role in our overall success and in enhancing shareholder value and, accordingly, even though we are not and will not become a Canadian reporting issue as a result of this offering, we have adopted, or will be adopting in connection with the completion of this offering, certain corporate governance policies and practices which reflect our consideration of the recommended Corporate Governance Guidelines. The disclosure set out below includes disclosure required by NI 58-101 describing our approach to corporate governance in relation to the Corporate Governance Guidelines.

Corporate Cease Trade Orders and Bankruptcies

To the knowledge of the Company, no director or executive officer of the Company (nor any personal holding company of any such persons) is, as at the date of this prospectus, or was within 10 years before the date of this prospectus, a director, CEO or CFO of any company (including the Company), that: (i) was subject to a cease trade order (including a management cease trade order), an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was in effect for a period of more than 30 consecutive days (collectively, an “Order”), and that was issued while the director or executive officer was acting in the capacity as director, CEO or CFO; or (ii) was subject to an Order that was issued after the director or executive officer ceased to be a director, CEO or CFO and which resulted from an event that occurred while that person was acting in the capacity as director, CEO or CFO.

To the knowledge of the Company, except as described below, no director or executive officer of the Company (nor any personal holding company of any such persons), or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company: (i) is, as at the date of this prospectus, or has been within the 10 years before the date of this prospectus, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has, within the 10 years before the date of this prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

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Mr. Glassman was appointed as a director of Snowbear Limited on March 11, 2005, following the acquisition of Snowbear Limited by Catalyst Fund Limited Partnership I. In 2012, an application was made by Catalyst Fund Limited Partnership I for an order pursuant to section 243(1) of the Bankruptcy and Insolvency Act (Canada) and section 101 of the Courts of Justice Act appointing PricewaterhouseCoopers Inc. as receiver, without security, of all of the assets, undertakings and properties of Snowbear Limited. On May 2, 2012, the Ontario Superior Court of Justice granted the motion made by PricewaterhouseCoopers Inc. to approve an auction services agreement entered into between PricewaterhouseCoopers Inc. and Century Services Inc., and vesting Snowbear Limited’s rights, title and interests in and to the assets described in such auction services agreement in the purchasers thereof free and clear of all claims.

Mr. Bardua served as CFO of Pacific BioEnergy Corporation from October 2009 until December 2011. In December 2011, Kitwanga Lumber Co. Ltd. (a wholly owned subsidiary of Pacific BioEnergy Corporation) made an assignment in bankruptcy. PricewaterhouseCoopers Inc. was appointed trustee of Kitwanga Lumber Co. Ltd. All of the assets of Kitwanga Lumber Co. Ltd. were sold on March 8, 2012.

Mr. Bardua served as CFO of Endurance Wind Power Inc. from June 2014 until December 2015 and also served as Endurance Wind Power Inc.’s CEO between January 2016 and October 2016. In November 2016, Endurance Wind Power Inc. made an assignment in bankruptcy and Grant Thornton Limited was appointed trustee. Two wholly owned UK subsidiaries of Endurance Wind Power Inc., Endurance Wind Power (UK) Limited and Endurance Energy MFTG (UK) Limited, subsequently went into administration in late 2016. Grant Thornton UK LLP was appointed trustee of both of the UK subsidiaries.

Mr. Ward was adjudged bankrupt pursuant to the Bankruptcy and Insolvency Act (Canada) in April 2013. Smythe Ratcliffe Insolvency Inc. was appointed trustee of Mr. Ward’s estate. As a first-time bankrupt, and on the expiry of 21 months, Mr. Ward was discharged from bankruptcy in January 2015.

Penalties and Sanctions

To the knowledge of the Company, no director or executive officer of the Company (nor any personal holding company of any of such persons), or Shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Board of Directors

Board Composition and Election of Board Members after This Offering

Under our articles, as they will be amended and restated in connection with this offering, our board of directors will consist of a minimum of three and a maximum of 15 directors, where such number of directors between such range is determined from time to time by the board. Upon completion of this offering, our board of directors will be comprised of seven directors. Our bylaws will provide that a director may be removed with or without cause by a resolution passed by a majority of the votes cast by shareholders present in person or by proxy at a meeting and who are entitled to vote.

The directors will be elected by the shareholders at each annual meeting of shareholders, and all directors will hold office for a term expiring at the close of the next annual shareholders meeting or until their respective successors are elected or appointed. Under the CBCA and our articles, between annual meetings of our shareholders, the directors may appoint one or more additional directors to fill vacancies in the board, whether created by a resignation of a director or due to an increase in the size of the board, provided that after such

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additional directors are appointed, the total number of directors is not greater than one and one-third times the number of directors elected at the last annual meeting.

Certain aspects of the composition and functioning of our board of directors may be subject to the rights of our principal and selling shareholders under their agreements with us. Nominees for election as directors will be recommended to our board of directors by our nominating and corporate governance committee in accordance with the provisions of applicable corporate law and the charter of our nominating and corporate governance committee. See “Board Committees—Nominating and Corporate Governance Committee.”

Director Term Limits and Other Mechanisms of Board Renewal

Our board of directors has not adopted director term limits, a retirement policy for its directors or other automatic mechanisms of board renewal. Rather than adopting formal term limits, mandatory age-related retirement policies and other mechanisms of board renewal, the nominating and corporate governance committee of our board of directors will develop appropriate qualifications and criteria for our board as a whole and for individual directors. The nominating and corporate governance committee will also conduct a process for the assessment of our board of directors, each committee and each individual director regarding his, her or its effectiveness and contribution, and will also report evaluation results to our board of directors on a regular basis. The nominating and corporate governance committee will develop a succession plan for the board of directors, including maintaining a list of qualified candidates for director positions.

Director Independence

Following the completion of this offering, we will be a “controlled company” under the NYSE Listing Rules because more than 50% of the voting power of our common shares will be held by affiliates of Catalyst. See “Principal and Selling Shareholders.” We intend to rely upon the “controlled company” exception relating to the board of directors and committee independence requirements under the NYSE Listing Rules. Pursuant to this exception, we will be exempt from the rules that would otherwise require that our board of directors consist of a majority of independent directors and that our compensation committee and nominating and corporate governance committee be composed entirely of independent directors. The “controlled company” exception does not modify the independence requirements for the audit committee, and we intend to comply with the requirements of the Exchange Act and the NYSE Listing Rules and applicable Canadian securities laws, which require that our audit committee have a majority of independent directors upon consummation of this offering, and exclusively independent directors within one year following the effective date of the registration statement relating to this offering.

Under the NYSE Listing Rules, an independent director means a person who, in the opinion of our board of directors, has no material relationship with our company. Under NI 58-101, a director is considered to be independent if he or she is independent within the meaning of Section 1.4 of National Instrument 52-110—Audit Committees, or NI 52-110. Pursuant to NI 52-110, an independent director is a director who is free from any direct or indirect material relationship with us which could, in the view of our board of directors, be reasonably expected to interfere with the exercise of a director’s independent judgment.

Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that                 ,                 , and                 , representing                of the                members of our board of directors, are “independent” as that term is defined under the NYSE Listing Rules, NI 58-101 and as such term is defined in Rule 10A-3(b)(1) under the Exchange Act. In making this determination, our board of directors considered the current and prior relationships that each such non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence.

We will take steps to ensure that adequate structures and processes will be in place following the completion of this offering to permit our board of directors to function independently of management, including for purposes

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of encouraging an objective process for nominating directors and determining executive compensation. It is contemplated that the independent members of our board of directors will consider, on the occasion of each meeting, whether an in camera meeting without the non-independent directors and members of management would be appropriate and that they will hold an in camera meeting without the non-independent directors and members of management where appropriate.

Members of our board of directors may also serve as members of the boards of other public companies. See “Management—Executive Officers and Directors.” Our board of directors has not adopted a formal director interlock policy, but is keeping informed of other directorships held by its members.

Mandate of the Board of Directors

Our board of directors is responsible for supervising the management of our business and affairs, including providing guidance and strategic oversight to management. Our board of directors will hold regularly scheduled meetings as well as ad hoc meetings from time to time. Our board will adopt a formal mandate for the board of directors. The responsibilities of our board of directors upon completion of this offering will include:

• adopting a strategic planning process, approving the principal business objectives for the Company and approving major business decisions and strategic initiatives;

• appointing our Chief Executive Officer and developing the corporate goals and objectives that the Chief Executive Officer is responsible for meeting, and reviewing the performance of the Chief Executive Officer against such goals and objectives;

• overseeing communications with shareholders, other stakeholders, analysts and the public, including the adoption of measures for receiving feedback from stakeholders; and

• monitoring the implementation of procedures, policies and initiatives relating to corporate governance, risk management, corporate social responsibility, health and safety, ethics and integrity.

Our board of directors has not developed at this time written position descriptions for the chairman of the board of directors or the chairperson of the board committees. Their primary roles are managing the affairs of the board of directors or of such relevant committee, including ensuring the board of directors or such committee is organized properly, functions effectively and meets its obligations and responsibilities. Each committee chairperson will conduct the affairs of the applicable committee in accordance with the charter of such committee.

Our board of directors and our Chief Executive Officer have not developed at this time a written position description for the Chief Executive Officer or for other executive officers. The role of the Chief Executive Officer is delineated on the basis of customary practice. The board of directors considers that the role and responsibilities of the Chief Executive Officer are to develop our strategic plans and policies and recommend such plans and policies to the board of directors, provide executive leadership, oversee a comprehensive operational planning and budgeting process, supervise day-to-day management, report relevant matters to the board of directors, facilitate communications between the board of directors and the senior management team, and identify business risks and opportunities and manage them accordingly, and has communicated the same to the Chief Executive Officer.

Orientation and Continuing Education

Following the completion of this offering, we will implement an orientation program for new directors under which each new director will meet separately with the chairman of our board of directors, individual directors and members of the senior management team. New directors will be provided with comprehensive orientation and education as to our business, operations and corporate governance (including the role and responsibilities of the board of directors, each committee and directors individually).

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The chairman of our board of directors will be responsible for overseeing director continuing education designed to maintain or enhance the skills and abilities of our directors and to ensure that their knowledge and understanding of our business remains current. The chairperson of each committee will be responsible for coordinating orientation and continuing director development programs relating to the committee’s mandate.

Board Committees

Upon the completion of this offering, our board of directors will have three standing committees: the audit committee; the compensation committee; and the nominating and corporate governance committee. Each of the committees will operate under its own written charter adopted by our board of directors, each of which will be available on our website upon the closing of this offering.

Audit Committee

Following this offering, our audit committee will be composed of                 ,                  and                  , with                 serving as chairperson of the committee. Our board of directors has determined that                  and                 meet the independence requirements under the rules of the NYSE, the CBCA, NI 58-101 and under Rule 10A-3 of the Exchange Act. Within one year following the effective date of the registration statement relating to this offering, our audit committee will consist exclusively of independent directors. Our board has determined that                 is an “audit committee financial expert” with the meaning of the SEC’s regulations and the NYSE Listing Rules. The principal responsibilities and duties of the audit committee will include:

• appointing, compensating, retaining and overseeing the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services and reviewing and appraising the audit efforts of our independent accountants;

• pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

• establishing procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and (ii) confidential and anonymous submissions by our employees of concerns regarding questionable accounting or auditing matters;

• reviewing and approving our hiring policies regarding partners, employees and former partners and employees of our present and former registered public accounting firm;

• engaging independent counsel and other advisers, as necessary and determining funding of various services provided by accountants or advisers retained by the committee;

• reviewing our financial reporting processes and internal controls;

• establishing, overseeing and dealing with issues related to our code of ethics for managers and financial officers;

• reviewing and approving related-party transactions or recommending related-party transactions for review by independent members of our board of directors; and

• providing an open avenue of communication among the independent accountants, financial and senior management and the board.

Both our independent auditors and internal financial personnel regularly meet privately with the audit committee and have unrestricted access to this committee. Grant Thornton LLP was appointed as our independent registered public accountant by our board of directors on September 16, 2018. See “Changes in Registrant’s Certifying Accountant.”

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Compensation Committee

Following this offering, our compensation committee will be composed of                 ,                  and                  , with                 serving as chairperson of the committee. Our board of directors has determined that                  and                 are independent within the meaning of NI 58-101. The committee’s primary purpose, with respect to compensation, will be to assist our board of directors in fulfilling its oversight responsibilities and to make recommendations to our board of directors with respect to the compensation of our directors and executive officers. The principal responsibilities and duties of the compensation committee will include:

• evaluating our Chief Executive Officer’s and other executive officers’ performance in light of the goals and objectives established by our board of directors and, based on such evaluation, with appropriate input from other independent members of our board of directors, determining the Chief Executive Officer’s and other executive officers’ compensation;

• administering our equity-based plans and management incentive compensation plans and making recommendations to our board of directors about amendments to such plans and the adoption of any new employee incentive compensation plans; and

• engaging independent counsel and other advisers, as necessary and determining funding of various services provided by accountants or advisers retained by the committee.

Nominating and Corporate Governance Committee

Following this offering, our nominating and corporate governance committee will be composed of                 ,                  and                  , with                serving as chairperson of the committee. Our board of directors has determined that                  and                 are independent within the meaning of NI 58-101. The principal responsibilities and duties of the nominating and corporate governance committee will include:

• developing and recommending to the board of directors criteria for board and committee membership;

• recommending to the board of directors the persons to be nominated for election as directors and to each of the committees of the board of directors;

• assessing the independence of directors within the meaning of securities laws and stock exchange rules as applicable;

• reviewing and making recommendations to the board of directors in respect of our corporate governance principles;

• providing for new director orientation and continuing education for existing directors on a periodic basis;

• performing an evaluation of the performance of the committee; and

• overseeing the evaluation of the board of directors and its committees.

Code of Business Conduct and Ethics

Prior to the completion of this offering, we expect to adopt a Code of Business Conduct and Ethics, or Code of Conduct, applicable to all of our directors, officers and employees, which will be available on our website upon the closing of this offering. The Code of Conduct will set out our fundamental values and standards of behavior that are expected from our directors, officers and employees with respect to all aspects of our business. The objective of the Code of Conduct will be to provide guidelines for maintaining our integrity, reputation and honesty with a goal of honoring others’ trust in us at all times. The Code of Conduct will set out guidance with respect to conflicts of interest, protection and proper use of corporate assets and opportunities, confidentiality of corporate information, fair dealing with third parties, compliance with laws and reporting of any illegal or unethical behavior.

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Monitoring Compliance with the Code of Business Conduct and Ethics

Our audit committee is responsible for reviewing and evaluating the Code of Conduct periodically and will recommend any necessary or appropriate changes thereto to our board of directors for consideration. The audit committee will also assist our board of directors with the monitoring of compliance with the Code of Conduct, and will be responsible for considering any waivers of the Code of Conduct (other than waivers applicable to our directors or executive officers, which shall be subject to review by our board of directors as a whole).

Interests of Directors

A director who has a material interest in a matter before our board of directors or any committee on which he or she serves is required to disclose such interest as soon as the director becomes aware of it. In situations where a director has a material interest in a matter to be considered by our board of directors or any committee on which he or she serves, such director may be required to excuse himself or herself from the meeting while discussions and voting with respect to the matter are taking place. Directors will also be required to comply with the relevant provisions of the CBCA regarding conflicts of interest. See “Description of Share Capital—Certain Important Provisions of Our Amended and Restated Articles of Incorporation and the CBCA—Directors.”

Complaint Reporting and Whistleblower Policy

In order to foster a climate of openness and honesty in which any concern or complaint pertaining to a suspected violation of the law, our Code of Conduct or any of our policies or any unethical or questionable act or behavior, the board of directors will adopt a whistleblower policy that requires that our employees promptly report such violation or suspected violation. In order to ensure that violations or suspected violations can be reported without fear of retaliation, harassment or an adverse employment consequence, our whistleblower policy will contain procedures that are aimed to facilitate confidential, anonymous submissions by our employees.

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EXECUTIVE COMPENSATION

Overview

The following tables and discussion relate to the compensation paid to or earned by our Chief Executive Officer, Tony Santo, and our two most highly compensated executive officers (other than Mr. Santo) who were serving as executive officers on the last day of 2018. They are Bradley Bardua, who served as our Chief Financial Officer until December 13, 2018 and then transitioned to the position of Chief Administration Officer, and Keith Andrews, who serves as our Senior Vice President and Managing Director of Casinos, Ontario. Messrs. Santo, Bardua and Andrews are referred to collectively in this prospectus as our named executive officers, or the NEOs.

Summary Compensation Table

The following table sets forth information about certain compensation awarded to, earned by or paid to our NEOs during the year ended December 31, 2018. In accordance with SEC rules all amounts set forth in the Summary Compensation Table (and the related disclosure in this Executive Compensation section) are denominated in U.S. dollars rather than Canadian dollars.

Name and Principal Position	Year		Salary ($)	Bonus ($)(3)	All Other Compensation ($)(4)	Total Compensation ($)
Tony Santo(1)(5) Chief Executive Officer and Director		2018
Bradley Bardua(1)(2) Chief Financial Officer		2018
Keith Andrews(1) Senior Vice President and Managing Director of Casinos, Ontario		2018

Notes:    (1) All amounts reported in the Summary Compensation Table and related executive compensation section disclosure (excluding the base salary for Mr. Santo set forth in the “Salary” column, which is paid in U.S. dollars) have been converted to U.S. dollars using an exchange rate of US$                =C$        , which was the exchange rate as of December                 , 2018.

(2) Mr. Bardua served as Chief Financial Officer of the Company until December 13, 2018. As of December 14, 2018, Mr. Bardua commenced service as our Chief Administrative Officer.

(3) Amounts represent the amount of the discretionary increase paid to each NEO in connection with the payout of legacy equity awards under the Legacy Equity Compensation Program in 2018. In accordance with the terms of the Legacy Equity Compensation Program awards granted to each of our NEOs prior to 2018, in March 2018 Messrs. Santo, Bardua and Andrews became entitled to payments of $                 , $     and $                , respectively, due to the occurrence of a dividend payment that constituted a “liquidity event” within the meaning of the Legacy Equity Compensation Program awards. The board of directors and each participant determined to settle these legacy equity awards in cash rather than shares of common stock. As a result, the board of directors determined in its discretion to increase the amount paid to each NEO in order to provide each NEO with the after-tax value the NEO would have received as an actual equity-holder in connection with the liquidity event. For further information on these legacy equity awards, see “Narrative to Summary Compensation Table – Legacy Equity Compensation Program.”

(4) Amounts represent (i) a $                car allowance paid to Mr. Santo and (ii) a defined contribution plan matching contribution of $                paid by us to Mr. Andrews’ defined contribution plan account.

(5) Mr. Santo is compensated as Chief Executive Officer and does not receive additional compensation for his service on our board of directors.

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Narrative to Summary Compensation Table

Overview

We offer our NEOs cash compensation in the forms of base salary and bonuses. Our NEOs also participate in our current equity program, pursuant to which they will receive equity compensation upon the happening of certain pre-determined events. Following the completion of this offering, we may grant long-term incentives under a new long-term equity incentive plan, or the 2018 LTIP, which is described below under “—2018 Long Term Incentive Plan”, to our NEOs.

Historically, the compensation of our Chief Executive Officer has been set by our board of directors and the compensation of our other NEOs has been set by our Chief Executive Officer. In anticipation of becoming a public company, our board of directors intends to adopt a written charter for the Compensation Committee setting out its responsibilities for administering our compensation programs and reviewing and making recommendations to our board of directors concerning the level and nature of the compensation payable to our directors and executive officers.

Compensation Components

Base Salary

Base salary is the fixed component of total direct compensation for the NEOs, and is intended to attract and retain executives, providing a competitive amount of income certainty. Each NEO’s initial base salary was provided in his employment agreement.

Bonuses

Each of our NEOs is party to a legacy short term incentive plan that has not resulted in any incentive payments since 2011. However, following completion of this offering, we intend to adjust our short-term incentive plan, or STIP, to align this element of our compensation program with market norms and motivate our executive officers to meet annual financial performance targets. Under the STIP, we expect that our NEOs will be eligible to receive annual bonuses that are earned and measured with reference to our and the individual’s overall annual performance.

NEOs may also receive additional discretionary bonuses, as determined by our CEO and approved the board of directors.

Legacy Equity Compensation Program

Legacy Equity Compensation Program — Historical Employment Agreement Arrangements

Pursuant to their respective employment arrangements, each of the NEOs is party to our current equity program, or our Legacy Equity Compensation Program, which provides for equity participation in a “liquidity event” during the term of the NEO’s employment and up to six months following termination (in the case of termination without cause). Our Legacy Equity Compensation Program is designed to simulate share ownership to encourage our executives to maximize shareholder value. Pursuant to the employment agreements of Messrs. Bardua and Andrews, each of the following events constitutes a “liquidity event” under our Legacy Equity Compensation Program: (i) an initial public offering, including this offering, or a secondary public offering of common shares by our existing shareholders, (ii) a disposition by Catalyst, following an initial public offering, of its common shares, (iii) a dividend payment that is not a periodic dividend payment paid pursuant to an established dividend policy, and (iv) a sale of the Company in which the consideration is cash and/or securities of the acquirer or one of its affiliates. On the occurrence of a liquidity event, Messrs. Bardua and Andrews will receive consideration equal to                 % and                 %, respectively, of the consideration received by the existing shareholders in connection with such liquidity event, which will be settled in common shares from treasury unless otherwise agreed to by Messrs. Bardua and Andrews.

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Pursuant to our CEO Mr. Santo’s offer letter, the following events each constitute a “liquidity event” under our Legacy Equity Compensation Program: (i) a secondary public offering, including this offering, (ii) a dividend payment that is not a periodic dividend payment paid pursuant to an established dividend policy, and (iii) a sale of the Company in which the consideration is cash and/or securities of the acquirer or one of its affiliates. On the occurrence of a liquidity event, Mr. Santo will receive consideration equal to                 % of the consideration received by existing shareholders in connection with a liquidity event, which may be paid in common shares or another equity-based instrument or cash.

Participants in our Legacy Equity Compensation Program, including each of our NEOs, received payments in connection with the dividends paid to our shareholders as a return of capital on March 14, 2018, which constituted a “liquidity event.” Upon the occurrence of such liquidity event, Messrs. Santo, Bardua and Andrews received aggregate payments in the amount of $                 , $                 and $                , respectively. The board of directors decided to settle all of such legacy equity awards in cash rather than in common shares.

In order to more closely align the payments to certain of our Legacy Equity Compensation Program participants, including our NEOs, to the after-tax economic benefits these participants would have received as actual Company equity-holders in connection with the liquidity events, the board of directors approved additional payments to legacy equity award recipients, including our NEOs. The amount of these payments to each of our NEOs is set forth, above, in the “Bonus” column of the Summary Compensation Table.

In connection with this offering, our NEOs may receive payment in the form of cash, common shares or equity awards under our 2018 LTIP in satisfaction of our obligations under the Legacy Equity Compensation Program, subject to any required approvals of Legacy Equity Compensation Program participants.

Following completion of this offering, our Compensation Committee may determine, subject to any required approvals of Legacy Equity Compensation Program participants, to supplement or replace our Legacy Equity Compensation Program. It may also recommend that our NEOs continue to receive cash in lieu of common shares, or that their equity participation rights be supplemented for or convertible into different equity-based awards under the 2018 LTIP (if the 2018 LTIP is duly approved and adopted following the completion of this offering).

Outstanding Equity Awards

Though our NEOs do not hold any outstanding equity awards, they participate in our Legacy Equity Compensation Program which is designed to simulate share ownership (as described above). Our Legacy Equity Compensation Program does not give individuals any rights of ownership in our shares but instead gives them to right to receive distributions upon the occurrence of certain liquidity events beneficial to our shareholders. Accordingly, our NEOs are entitled to the following percentages of the consideration paid to our shareholders in connection with such liquidity events:

Name and Principal Position	Equity Participation
Tony Santo
Bradley Bardua
Keith Andrews

2018 Long-Term Equity Incentive Plan

Subject to the receipt of all required approvals (including approval of the board of directors), we anticipate establishing the 2018 Long-Term Equity Incentive Plan, or the 2018 LTIP, upon completion of this offering. The 2018 LTIP will allow us to: (i) encourage selected employees, officers and directors to acquire a proprietary interest in our growth and performance; (ii) promote accountability for our success; and (iii) provide compensation opportunities to attract, retain and motivate senior management critical to our long-term success.

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The board of directors will not award incentives under the 2018 LTIP using a prescribed formula or target. Instead, the board of directors will take into account previous grants, the individual’s position, scope of responsibility, ability to affect profits, historic and recent performance and the value of the awards in relation to other elements of the executive’s total compensation.

The 2018 LTIP will permit the following type of awards to be granted to participants, each of which we refer to as an Award:

• Options to purchase Common Shares, or Options;

• Share Appreciation Rights, or SARs;

• Restricted Share Units, or RSUs;

• Performance Restricted Share Units, or PSUs; and

• Deferred Share Units, or DSUs.

The terms and conditions attaching to the grants of the Options, SARs, RSUs, PSUs and/or DSUs, or collectively, the Awards, will be determined by the Compensation Committee and approved by the board of directors.

The Compensation Committee will have the power and discretionary authority to determine the terms and conditions of the Awards, including the individuals who will receive the Awards, the term of the Awards, the exercise price, the number of common shares subject to each Award, the limitations or restrictions on vesting and exercisability of Awards, acceleration of vesting or the waiver of forfeiture or other restrictions on awards, the form of consideration payable on exercise, whether Awards will entitle the participant to receive dividend equivalents and the timing of the Awards. The Compensation & Human Resources Committee will also have the power to establish award exercise procedures and procedures for payment of withholding tax obligations with cash.

Subject to compliance with applicable laws, rules and regulations (including, where required, applicable rules of the NYSE), the board of directors will be able to amend, alter, suspend, discontinue or terminate the 2018 LTIP or any award at any time provided that such amendment will not (i) impair the rights of any participant without such participant’s consent, or (ii) be made without obtaining the approval of the shareholders, if such amendment would (a) increase the total number of common shares available for Awards under the 2018 LTIP, (b) reduce the exercise price or extend the term of any Award benefiting an insider of us, or (c) otherwise cause the 2018 LTIP to cease to comply with any tax or regulatory requirement, including the NYSE Listing Rules.

Certain Restrictions

The total number of common shares that will be reserved for issuance under the 2018 LTIP is                 , or         % of the number of common shares outstanding on the date of consummation of this offering. The maximum number of common shares which may be issued pursuant to, or paid in satisfaction of, Awards granted under the 2018 LTIP to any one participant in any calendar year shall not exceed % of the total issued and outstanding common shares at the commencement of such calendar year (subject to adjustments in the event of a dividend or other distribution, recapitalization, share split, share dividend, reverse share split, reorganization, merger, take-over bid, consolidation, split-up, spin-off, combination, repurchase or exchange of our securities, issuance of warrants or other rights to purchase our securities or similar corporate transactions that affect common shares (in each case a “Change in Capitalization”)). Non-employee members of the board of directors may only be granted RSUs pursuant to the 2018 LTIP.

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Options

The exercise price of each Option granted will be determined by the Compensation Committee, which shall not be less than 100% of the fair market value of common shares on the date of the grant. Generally, Options granted under the 2018 LTIP may be exercised for a term indicated in the applicable award agreement but not exceeding 10 years from the date of grant. The vesting conditions, the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms in which, payment of the exercise price with respect thereto may be made shall be determined by the Compensation Committee.

In order to facilitate the payment of the exercise price of the Options, the 2018 LTIP will have a cashless exercise feature. A participant will be entitled to elect to surrender, in whole or in part, his or her rights under the Option in exchange for a payment of a cash amount per Option so surrendered equal to the difference between the fair market value of a common share on the date of surrender and the exercise price pursuant to the Option surrendered. The board of directors shall have the sole discretion to consent to or disapprove of any election by a participant to surrender Options and receive cash pursuant to this feature. If the board of directors disapproves such an election, the election by the participant to surrender his or her rights under the Option will be deemed not to constitute an exercise of the Option, and the Participant shall be entitled to retain the Option unexercised and exercise the Option in the normal course.

Share Appreciation Rights

A SAR is a grant solely in respect of the services of a participant to be rendered to us after the date of the grant of such SAR, and not in respect of past services. The base price of each SAR granted will be determined by the Compensation Committee, which shall not be less than 100% of the fair market value of common shares on the date of the grant. Generally, SARs granted under the 2018 LTIP may be exercised for a term indicated in the applicable award agreement but not exceeding 10 years from the date of grant. The vesting conditions and the time or times at which a SAR may be exercised in whole or in part shall be determined by the Compensation Committee. A vested SAR shall be exercisable within the period commencing on the date such SAR vested and ending on December 15^th of the calendar year in which the SAR vested.

Upon exercise of a vested SAR, a participant shall be entitled to receive an amount that will be determined by the Compensation Committee at the date of grant and will be based on the difference between the fair market value of a common share at the date of grant and the date of exercise. We shall be entitled to satisfy our obligations to make payment to a participant by paying or delivering to the participant cash, common shares or any combination of cash and common shares. If we issue common shares, the number of common shares to be delivered will be determined by dividing the aggregate value to be paid to the participant by the fair market value of the common shares on the date immediately preceding the date such delivery is made.

Restricted Share Units

The Compensation Committee may from time to time authorize grants of RSUs upon such terms and conditions as it may determine in accordance with the terms of the 2018 LTIP. At the time of grant of an RSU, the Compensation Committee shall specify the year of service of the participant in respect of which the RSU is being granted. The Compensation Committee may impose such terms and conditions relating to the vesting of an RSU as it may deem appropriate, provided that all RSUs will become vested RSUs by no later than December 15 of the third calendar year immediately following the year of service of in respect of which the RSU is granted.

All of a participant’s vested RSUs shall be redeemed on the redemption date set forth in the award agreement and we shall pay to the participant an amount equal to the fair market value of a common share, on such redemption date. Each RSU will constitute an agreement by us to deliver cash or, at our choice, common shares purchased by a broker on behalf of the participant on the open market.

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Performance Restricted Share Units

The Compensation Committee may designate RSUs as PSUs that shall only vest upon the achievement of specified management objectives set out in the participant’s award agreement. The number of PSUs that vest will be dependent upon the satisfaction of certain performance criteria determined by the Compensation Committee, which relate to the business or financial performance of us and may include total shareholder return and individual performance objectives.

Dividend Equivalents

When dividends (other than share dividends) are paid on common shares, additional RSUs or PSUs may be granted to each participant who holds RSUs or PSUs that have not expired or been redeemed or terminated on the record date for such dividends. The number of additional RSUs or PSUs to be granted to a participant will be calculated by dividing the total amount of the dividends that would have been paid to such participant had their RSUs and/or PSUs been converted to common shares at the time of the dividend payment by the fair market value of a common share on the date that is three business days prior to the relevant record date. Any additional RSUs or PSUs granted to a participant will be subject to the same vesting conditions applicable to the related RSUs or PSUs as set forth in such participant’s award agreement.

Deferred Share Units

Pursuant to the 2018 LTIP, our directors that are non-management members will be eligible to receive DSUs. Pursuant to the 2018 LTIP, our directors, other than management who will not be receiving director compensation, may elect to take all or a portion of their annual cash compensation in the form of DSUs. Each such director wishing to make an election will be required to make such election by no later than the December 15^th of the calendar year preceding the year in which such election is to apply. Participation by the eligible directors in the DSU plan is entirely voluntary.

The Compensation Committee may from time to time authorize grants of DSUs upon such terms and conditions as it may determine in accordance with the terms of the 2018 LTIP. The Compensation Committee may impose such terms and conditions relating to the vesting of a DSU as it may deem appropriate. All of a participant’s vested DSUs shall be redeemed on the redemption date set forth in the award agreement, provided that the redemption date will not be later than December 31 of the first calendar year commencing after the participant’s term of employment ends. Each DSU will constitute an agreement by us to deliver cash or, at our choice, common shares purchased by a broker on behalf of the participant on the open market.

Dividend Equivalents

When dividends (other than share dividends) are paid on common shares, additional DSUs may be granted to each director who holds DSUs that have not expired or been redeemed or terminated on the record date for such dividends. The number of additional DSUs to be granted to a participant will be calculated by dividing the total amount of the dividends that would have been paid to such participant had their DSUs been converted to common shares at the time of the dividend payment by the fair market value of a common share on the date that is three business days prior to the relevant record date.

Assignment and Voting Rights

Except as required by law, participants in the 2018 LTIP will not have any right to transfer the rights associated with Options, SARs, RSUs, PSUs and/or DSUs and will have no ownership or voting rights with respect to the Options, SARs, RSUs, PSUs and/or DSUs or the underlying shares associated with Options, SARs, RSUs, PSUs and/or DSUs.

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Termination of Employment

Generally, except as otherwise provided for in an award agreement or upon an exercise of discretion by the Compensation Committee, when a participant is terminated for cause, or a participant voluntarily resigns without good reason, any outstanding Options, SARs, RSUs, PSUs or DSUs which have not vested on or prior to the participant’s termination date shall terminate and become null and void as of such date and cancelled without payment. Upon termination of a participant as a result of the participant’s death, disability, retirement, termination without cause or voluntary termination by the participant for good reason (i) all DSUs previously granted to such participant shall become vested, (ii) and a pro rata proportion of any outstanding Options, SARs, RSUs and PSUs previously granted to such participant will vest based on the ratio that (x) the number of full time months during the vesting period that the participant was actively employed is of (y) the number of full months in the vesting period.

Generally, except as otherwise provided for in an award agreement or upon an exercise of discretion by the Compensation Committee, upon termination of a participant as a result of the participant’s death, disability, retirement, termination without cause or voluntary termination by the participant for good reason, all of the participant’s vested Options and vested SARs shall remain exercisable for a period of twelve months from the termination date; in the event that termination is for any other reason, all of the participant’s vested Options and vested SARs shall remain exercisable for a period of 30 days from the termination date. Upon termination of a participant’s employment, all of the participant’s vested RSUs, PSUs and vested DSUs shall be redeemed and paid out.

Effect of a Significant Event

Upon the occurrence of a Significant Event (as specifically defined in the 2018 LTIP), including a change of control transaction or a liquidation or winding-up of the company, and unless otherwise provided in an award agreement or a written employment contract, the Compensation Committee may, provide that (i) the successor corporation will assume each Award or replace it with a substitute Award on terms substantially similar to the existing Award, (ii) implement the acceleration or vesting of any or all Awards, (iii) the surrender for cash payments equal to the fair market value thereof, or (iv) any combination of the foregoing.

Retirement Arrangements

None of our NEOs participated in a retirement plan in 2018 with the exception of Mr. Andrews, who is enrolled in the Pension Plan for Ontario Employees of Gateway Casinos & Entertainment Limited, which is a defined contribution plan that we offer to certain of our Ontario employees. The company contributes 2% of Mr. Andrews’ base salary to the plan and provides matching contributions in the pension plan of an additional 2%.

Benefit Plans

We provide our executive officers, including the NEOs, with life, disability, health and dental insurance programs on the same basis as other employees, as well as paid time off. We offer these benefits consistent with local market practice.

Executive Share Ownership Guidelines

In connection with this offering, we intend to establish executive share ownership guidelines to further align the interests of our executive officers with those of our shareholders. The ownership guidelines will establish minimum equity ownership levels for executive officers based on a multiple of their base salary and their level of seniority. Executive officers will be expected to meet the prescribed ownership levels within three years of the later of the completion of this offering and the date of their appointment to an executive position.

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The following table shows the expected ownership guidelines for the executive officers:

Level	Base Salary Multiple
Chief Executive Officer
Other Named Executive Officers/All Other Executives

Awards Granted in Connection with this Offering

An aggregate of $         the cash equivalent of             common shares (issued at the initial public offering price of $         per common share) minus the applicable withholding taxes, will be awarded and/or paid to our NEOs pursuant to our Legacy Equity Compensation Program upon completion of this offering. Following the completion of this offering, our NEOs will hold         % of our outstanding common shares.

Employment Arrangements

Pursuant to each of their employment agreements, our NEOs are entitled to equity participation in which they will each receive a percentage of the consideration received by holders of our common shares upon certain liquidity events. For further information with regard to our NEO’s equity participation rights, see “Legacy Equity Compensation Program.” In connection with this offering, we intend to enter into amended employment agreements with Messrs. Bardua and Andrews based on an analysis of market standards.

Employment Agreements

Tony Santo

On October 16, 2013 we entered into an offer letter with Mr. Santo, or the Santo Offer Letter, providing for his employment as Chief Executive Officer of the company. The Santo Offer Letter provides that Mr. Santo is entitled to a base salary of $650,000 per year, an annual performance-based bonus with a target bonus opportunity of 100% of his base salary and a car allowance of $795 per month.

The Santo Offer Letter provides that Mr. Santo may resign at any time by providing 90 days’ notice. We may waive the notice requirement and have no further responsibility for the payment of any compensation or severance. If Mr. Santo’s employment is terminated without “Just Cause”, he is entitled to receive a severance payment equal to 18 months’ annual salary, plus one month of severance pay for each additional year of service following his second work anniversary to a maximum of 24 months of severance pay, as well as his pro rata annual bonus paid out at 80% of his target annual bonus amount for the year in which termination occurs. The amount of Mr. Santo’s severance payment that is equal to 12 months base salary and his pro rata annual bonus will be payable in equal installments during the 12 month period following the date of termination, with the remainder of the severance payable as a lump sum at the end of such 12 month period. Mr. Santo is also entitled to continued health and welfare benefits until the earlier of the expiration of the 12 month period following his date of termination or the date he obtains coverage through an alternative employer. Receipt of any severance benefits is subject to Mr. Santo’s execution of a release and compliance with his restrictive covenants.

If Mr. Santo fails to obtain and maintain any licenses or approvals required by applicable gaming regulators, or fails to provide notice to us or the applicable gaming regulators of certain events that could result in the suspension or cancellation of any license, we may terminate his employment for cause.

The Santo Offer Letter contains 12 month post-termination non-competition and “Patron” and employee non-solicitation covenants, as well as a perpetual confidentiality covenant.

For purposes of the Santo Offer Letter, “Just Cause” means any act or omission by Mr. Santo that would constitute just cause for termination of employment under the common law, including without limitation any willful or gross misconduct in relation to the performance of his duties under the Santo Offer Letter, and any gross neglect of his duties under the Santo Offer Letter.

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For purposes of the Santo Offer Letter, “Patron” means any corporate entity or individual that we have identified in our records as a “status level” or “high action” player as such terms are generally understood in the gaming industry, and who is the recipient of a marketing or promoting endeavor by us.

Bradley Bardua

On September 29, 2016 we entered into an employment agreement with Mr. Bardua, or the Bardua Employment Agreement, providing for his employment as Chief Financial Officer. The Bardua Employment Agreement provides that Mr. Bardua is entitled to a base salary of $278,320 per year, a performance bonus under the STIP with a maximum bonus opportunity of 50% of his base salary payable in our discretion and a cell phone with associated costs covered.

The Bardua Employment Agreement provides that he may resign at any time by providing three months’ notice; we may waive the notice period, but will pay Mr. Bardua the pro rata base salary due for the balance of the three-month period. If Mr. Bardua’s employment is terminated without cause, he will receive a lump sum payment equal to his annual base salary, any statutorily required continued health benefits coverage and any applicable STIP payments for the previous fiscal year that have not already been paid. If Mr. Bardua fails to obtain and maintain any licenses or approvals required by applicable gaming regulators, or fails to provide notice to us or the applicable gaming regulators of certain events that could result in the suspension or cancellation of any license, we may terminate his employment for cause.

The Bardua Employment Agreement provides that Mr. Bardua will be subject to a perpetual confidentiality covenant, 18 month post-termination customer and employee non-solicitation covenants and a non-competition covenant which will apply either (i) 12 months post-termination if he resigns or is terminated by us for cause or (ii) 6 months post-termination if he is terminated by us without cause. Mr. Bardua will also prohibited from gambling at any gaming facility or operation operated by us or any related companies or businesses for the 3 month period after the date of termination of his employment.

In connection with Mr. Bardua’s change in position to Chief Administrative Officer, we intend to enter into an amended and restated employment agreement with Mr. Bardua, dated as of                 .

Keith Andrews

On June 26, 2014 we entered into an employment agreement with Mr. Andrews, as subsequently amended, or the Andrews Employment Agreement. The Andrews Employment Agreement provides for Mr. Andrews’ employment as Senior Vice President, Managing Director of Ontario and that he is entitled to a base salary of $258,440, a one-time project-based bonus of $47,712 (which has been fully paid), a performance bonus under the STIP with a maximum bonus opportunity of 40% of his base salary payable in our discretion and a cell phone with associated costs covered.

The Andrews Employment Agreement provides that Mr. Andrews may resign at any time by providing three months’ notice; we may waive the notice period, but will pay Mr. Andrews the pro rata base salary due for the balance of the three month period. If his employment is terminated without cause, he will receive a lump sum payment equal to twelve months of his base salary, any statutorily required continued health benefits coverage and his pro-rated eligible STIP payment for the calendar year in which termination occurred. If Mr. Andrews fails to obtain and maintain any licenses or approvals required by applicable gaming regulators, or fails to provide notice to us or the applicable gaming regulators of certain events that could result in the suspension or cancellation of any license, we may terminate his employment for cause.

The Andrews Employment Agreement provides that Mr. Andrews will be subject to a perpetual confidentiality covenant, 12 month post-termination customer and employee non-solicitation covenants and a non-competition covenant which will apply either (i) 12 months post-termination if he resigns or is terminated by us for cause or (ii) 6 months post-termination if he is terminated by us without cause. Mr. Andrews will also prohibited from gambling at any gaming facility or operation operated by us or any related companies or businesses for the 3 month period after the date of termination of his employment.

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DIRECTOR COMPENSATION

The table below shows the compensation received by our directors for the fiscal year ended December 31, 2018.

Director Compensation

Name Fees Earned
or Paid in
Cash ($) Stock
Awards ($) Total ($)

Director Share Ownership Guidelines

In connection with this offering, we intend to establish director share ownership guidelines to further align the interests of our executive officers with those of our shareholders. Our directors will also be expected to maintain a minimum equity ownership level of          times their annual cash retainer. Directors will be expected to meet the prescribed ownership levels within years of the later of the completion of this offering and the date of their appointment our election to our board of directors.

Non-Employee Director Compensation Policy

In connection with this offering, we intend to adopt a non-employee director compensation policy that, effective upon the closing of this offering, will be applicable to each of our non-employee directors. Pursuant to this policy, each eligible non-employee director will receive an annual cash retainer of $        , which will be paid quarterly in arrears.

Also, pursuant to the non-employee director compensation policy, on the date of any annual meeting of our shareholders, we intend to grant each eligible non-employee director an award of              that have a grant date fair value of $                . The terms of each such award will be set forth in a written award agreement between each director and us, which will generally provide for vesting after years of continued service as a director. Any eligible non-employee director who is elected or appointed mid-year will receive a pro-rated portion of the annual award adjusted to reflect his or her period of service.

All cash and equity awards granted under the non-employee director compensation policy will be granted under, and subject to the limits of, the 2018 LTIP.

Type of Fee		Amount ($)
Board Retainer	Board Member
	Lead Independent Director
Committee Chair Retainer	Audit & Risk Committee Chair
	Compensation Committee Chair
	Corporate Governance & Nominating Committee Chair

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PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information relating to the beneficial ownership of our common shares as of                 , 2018 by:

• each person, or group of affiliated persons, known by us to beneficially own 5% or more of our outstanding common shares, which includes each selling shareholder;

• each of our named executive officers and members of our board of directors; and

• all executive officers and members of our board of directors as a group.

The number of common shares beneficially owned by each entity or individual below is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days of                 , 2018 through the exercise of any option, warrant or other right. Except as otherwise indicated, and subject to applicable community property laws, we believe based on the information provided to us that the persons named in the table have sole voting and investment power with respect to all common shares shown as beneficially owned by such person.

The percentage of shares beneficially owned before the offering is computed on the basis of                 of our common shares as of                 , 2018. The percentage of shares beneficially owned after the offering is based on the number of our common shares to be outstanding after this offering, including the                  of our common shares that we are selling in this offering, and assumes no exercise of the underwriters’ option to purchase additional common shares from us. Common shares that a person has the right to acquire within 60 days of                 , 2018 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all named executive officers and directors as a group. As of                 , 2018,                common shares, representing     % of our issued and outstanding common shares, were held by                U.S. record holders. Unless otherwise indicated below, the address for each beneficial owner listed is c/o Gateway Casinos & Entertainment Limited, 4331 Dominion Street, Burnaby, British Columbia, Canada V5G 1C7.

	Shares beneficially owned before the offering			Shares beneficially owned after the offering (assuming no exercise of the option to purchase additional shares)				Shares beneficially owned after the offering (assuming full exercise of the option  to purchase additional shares)
Name and address of beneficial owner	Number	Percent		Number		Percent		Number		Percent
5% or Greater Shareholders
Catalyst Fund Limited Partnership II (1)			%				%				%
Catalyst Fund Limited Partnership III(2)			%				%				%
TOP V New World Holdings, LLC(3)			%				%				%
Named Executive Officers and Directors
Tony Santo			*%		—		%		—		%
Bradley Bardua			*%
Keith Andrews
Gabriel de Alba
Michael C. Burns
Newton Glassman(4)
Lyle Hall
Olga Ilich
Dr. Michael Percy
Michael Plotzker(5)
All executive officers and members of our board of directors as a group (         persons)			%				%				%

* Indicates beneficial ownership of less than 1% of the total outstanding common shares.

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Notes:    (1) As partners of Catalyst, Messrs. Newton Glassman and Gabriel de Alba have voting and investment control over the shares owned by Catalyst Fund Limited Partnership II. Each of Mr. Glassman and Mr. de Alba disclaims any beneficial ownership of the shares owned by Catalyst Fund Limited Partnership II. The principal business address for Catalyst Fund Limited Partnership II is 181 Bay Street, Suite 4700, P. O. Box 792, Bay Wellington Tower, Brookfield Place, Toronto, Ontario, Canada M5J 2T3.

(2) As partners of Catalyst, Messrs. Newton Glassman and Gabriel de Alba have voting and investment control over the shares owned by Catalyst Fund Limited Partnership III. Each of Mr. Glassman and Mr. de Alba disclaims any beneficial ownership of the shares owned by Catalyst Fund Limited Partnership III. The principal business address for Catalyst Fund Limited Partnership III is 181 Bay Street, Suite 4700, P. O. Box 792, Bay Wellington Tower, Brookfield Place, Toronto, Ontario, Canada M5J 2T3.

(3) BlackRock, Inc. has sole dispositive power and shares voting power with the Managing Member of TOP V New World Holdings, LLC with respect to the shares held by TOP V New World Holdings, LLC. The principal business address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

(4) Mr. Glassman will resign as one of our directors immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. Mr. Glassman will be replaced on our board of directors by Michael Plotzker, the replacement nominee of Catalyst.

(5) Mr. Plotzker will replace Mr. Glassman as the replacement nomimee of Catalyst immediately prior to the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The agreements described in this section, or forms of such agreements as they will be in effect at the time of this offering, are filed as exhibits to the registration statement of which this prospectus forms a part, and the following descriptions are qualified by reference thereto.

POM Acquisition

On July 13, 2018, pursuant to a share purchase agreement dated June 29, 2018, we acquired all of the shares of 1998720 Ontario Inc. (formerly 7562578 Canada Inc.), or POM, from Natural Market Restaurants Corp., or NMRC, a wholly owned subsidiary of investment funds managed by Catalyst, for approximately $16.3 million, which we refer to as the POM Acquisition. POM previously carried on a grocery business under the name “Planet Organics Market” and, in the course of doing so, incurred significant losses. Prior to the closing of the POM Acquisition, POM transferred all of its assets (other than the shares of a non-operating subsidiary and certain tax losses) to, and all of POM’s remaining liabilities were assumed by, another wholly owned subsidiary of NMRC. The acquisition of POM is intended to allow us to utilize POM’s non-capital losses, which NMRC has represented to be not less than $217.0 million.

The share purchase agreement contains various representations and warranties by NMRC, including ones relating to the transfer of POM’s business assets and the assumption of POM’s business liabilities prior to the closing of the POM Acquisition, the absence of certain other liabilities, and certain tax attributes of POM. NMRC has agreed to indemnify us for any losses suffered from any breach under the share purchase agreement. This indemnity is capped at 50% of the purchase price and is limited to two years for representations and warranties relating to certain tax matters and three years for all other representations and warranties. In addition, NMRC has agreed to indemnify us for any outstanding and future liabilities of POM relating to the grocery business previously carried on by POM.

As we and NMRC are under the common control of investment funds managed by Catalyst, the POM Acquisition constituted a related party transaction. Accordingly, we retained Sequeira Partners Inc., an independent financial advisor, to provide a fairness opinion on the purchase price paid by us, and the nominees of Catalyst on our board of directors declared their interest in the transaction and abstained from voting thereon.

Indemnification Agreements

Prior to the consummation of this offering, we intend to enter into indemnification agreements with each of our directors and officers.

Related Person Transaction Policy

Prior to the consummation of this offering, we intend to adopt a related person transaction policy.

Existing Shareholder Agreements

Shareholders’ Agreement

We are a party to a shareholders’ agreement dated September 16, 2010, by and among us and all of our shareholders, which we refer to as the “Shareholders’ Agreement”. Pursuant to the terms of the Shareholders’ Agreement, the Shareholders’ Agreement will terminate immediately prior to the closing of this offering; however, the provisions of the Shareholders’ Agreement that grant piggyback registration rights to Shareholders holding at least 15% of the issued and outstanding common shares (or, in the case of TOP V New World Holdings, LLC, 75% of the common shares held by TOP V New World Holdings, LLC and its affiliates as of September 16, 2018), which we refer to as our Significant Shareholders, will survive the closing of this

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offering. Pursuant to the piggyback registration rights, we are required to give prompt notice to all Significant Shareholders of our intention to register any common share for a sale in a public offering. Upon receiving such notice any Significant Shareholder may exercise its piggyback registration rights and require that all or a part of the common shares held by such Significant Shareholder be included in the proposed registration, or the Piggyback Registration. We must use commercially reasonable efforts to include all of the common shares requested by a Significant Shareholder in the proposed registration and the Significant Shareholder has an obligation to provide certain information to us. All expenses incurred in connection with a Piggyback Registration (other than fees or commissions payable to an underwriter) will be paid by us.

Investor and Registration Rights Agreement

We and Catalyst will, upon the closing of this offering, enter into an investor and registration rights agreement, which we refer to as the Investor and Registration Rights Agreement, which will supersede the Piggyback Registration rights provided to Catalyst in the Shareholders’ Agreement. The following is a summary of the material attributes and characteristics of the Investor and Registration Rights Agreement. This summary is qualified in its entirety by reference to the provisions of that agreement, which contains a complete statement of those attributes and characteristics.

Pursuant to the Investor and Registration Rights Agreement, Catalyst and the investments funds managed by Catalyst, or the Catalyst Holders, will, collectively, have 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.

The Investor and Registration Rights Agreement will also provide the Catalyst Holders with registration rights in respect of any common shares held by them from time to time, or the Registrable Securities.

Each of the Catalyst Holders may require us to effect a registration for a public offering in the jurisdiction(s) where we are a reporting issuer of no less than $25.0 million of Registrable Securities, or a Demand Registration, so long as they own or control, in the aggregate, at least 10% of our issued and outstanding common shares. We shall be obligated to effect no more than four Demand Registrations in any twelve month period.

Notwithstanding any notice for a Demand Registration, we will be entitled to postpone the filing of any offering document for up to 90 days if, in the good faith judgment of our board of directors, the requested Demand Registration could either (i) impede our ability to consummate a significant transaction (including, without limitation, a financing, an acquisition, a restructuring or a merger) or proceed with negotiations or discussions in relation thereto, or (ii) there exists at the time material non-public information relating to us the disclosure of which would be materially adverse to us. The lead underwriter of any underwritten offering will have the right to limit, due to marketing reasons, the number of Registrable Securities to be qualified by such underwritten offering.

We are required to give prompt notice to all Catalyst Holders of our intention to register any Registrable Securities for sale in a public offering, whether the registration is on our behalf or pursuant to a Demand Registration. Upon receiving such notice, any Catalyst Holder may require that we complete a Piggyback Registration in respect of all or some of the Catalyst Holder’s Registrable Securities.

All expenses incurred in connection with a registration pursuant to a Demand Registration or a Piggyback Registration (excluding underwriters’ discounts and commissions, if any, and applicable transfer taxes, if any, which shall be borne by the selling Catalyst Holders) shall be borne by us.

Indemnification Agreements

Pursuant to the Shareholders’ Agreement, the selling shareholders have agreed to indemnify us, our directors and officers and each person who controls us (within the meaning of any applicable securities act)

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against any losses (excluding loss of profits), claims, damages, liabilities and expenses arising out of or based upon (i) any untrue statement of material fact contained in the prospectus or any omission of a material fact required to be stated therein or necessary to make any statement therein not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing by the selling shareholder specifically for inclusion in the prospectus; or (ii) any default by the selling shareholder in respect of their obligations to, in connection with any Piggyback Registration, (a) provide such information with respect to itself and the number of our securities held by the selling shareholder as may be reasonably required by us to comply with the applicable securities acts in each jurisdiction in which the registration is to be effected; (b) if required under the applicable securities acts, execute any certificate forming part of a preliminary prospectus, prospectus or similar document to be filed with the applicable commissions and provide all other information and documentation (including executed copies thereof) as we may reasonably require to effect the Piggyback Registration; and (c) immediately notify us of the happening of any event during the period in Section 10.2(b) of the Shareholders’ Agreement, as a result of which the preliminary prospectus or the prospectus, as in effect, would include an untrue statement of material fact or would omit any fact that is required to be stated or is necessary to make any statement therein not misleading in light of the circumstances in which it was made insofar as such facts or statements relate to or were provided by the selling shareholder; provided that the obligation to indemnify will be several, not joint and several, among such selling shareholders and the liability of each such selling shareholder will be in proportion to and limited in all events to the net amount received by such holder from the sale of registrable securities pursuant to such registration.

We have agreed to indemnify the selling shareholders, their respective officers and directors and each person who controls the selling shareholders (within the meaning of any applicable securities act) against all losses (excluding loss of profits), claims, damages, liabilities and expenses arising out of or based upon (i) any information or statement contained in the prospectus which at the time and in light of the circumstances under which it was made contains a misrepresentation (as defined in the applicable securities act); (ii) any omission to state in the prospectus any fact that was required to be stated in such document or necessary to make any statement in such document not misleading in light of the circumstances under which it was made; (iii) any order made or inquiry, investigation or proceedings commenced or threatened by any applicable commission, court or other competent authority based upon any untrue statement or omission or any misrepresentation in the prospectus or based upon any failure to comply with applicable securities laws (other than any failure by the selling shareholder) preventing or restricting the trading in or the sale and distribution of the registrable securities; and (iv) non-compliance by Gateway with any of the applicable securities acts in connection with a registration and the distribution effected thereunder, except insofar as (A) any information or statement referred to in clause (i), (ii) or (iii) above has been furnished in writing to us by the selling shareholder expressly for use therein or (B) caused by such selling shareholder’s failure to deliver to a purchaser of registrable securities a copy of the prospectus after the Company has furnished such selling shareholder with a sufficient number of copies of the same.

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DESCRIPTION OF INDEBTEDNESS

The following is a summary of certain provisions of the agreements and instruments evidencing our material indebtedness as of the date of this prospectus. This summary does not purport to be complete, and is subject to, and is qualified in its entirety by reference to, all of the provisions of such agreements and instruments, including the definitions of certain terms therein that are not otherwise defined in this prospectus.

Senior Secured Credit Facility

The 2018 Refinancing

On March 13, 2018, we closed the 2018 Refinancing, a refinancing of the 2017 Senior Secured Credit Facility pursuant to the A&R Credit Agreement for the 2018 Senior Secured Credit Facility. The 2018 Senior Secured Credit Facility consists of (x) the 2018 First Lien Term Loan Facility, a US dollar term loan facility in an aggregate principal amount of US$335.0 million and (y) an up to $150.0 million 2018 Senior Secured Revolving Credit Facility available to be drawn in Canadian dollars (with a sublimit of US$25 million for US dollars), the entire amount of which is available for letters of credit. The 2018 Senior Secured Credit Facility includes an uncommitted incremental term facility option under the 2018 First Lien Term Loan Facility and an uncommitted incremental revolving facility option under the 2018 Senior Secured Revolving Credit Facility, which we collectively refer to as the Incremental Facilities. The aggregate principal amount of the Incremental Facilities may not exceed US$120.0 million plus an unlimited amount, subject to pro forma compliance with required leverage ratios depending on whether such Incremental Facility is secured on a pari passu basis, secured on a junior-lien basis or unsecured.

The 2018 First Lien Term Loan Facility has a seven-year maturity and is payable in equal quarterly amounts of 0.25% of the original principal amount of such facility funded prior to such date, with the remaining balance due at maturity. The 2018 Senior Secured Revolving Credit Facility has a five-year maturity.

Borrowings and letters of credit under the 2018 Senior Secured Revolving Credit Facility are made available by way of Canadian dollar and US dollar advances. The 2018 Senior Secured Revolving Credit Facility and 2018 First Lien Term Loan Facility bear customary interest rates. Upon a Qualified IPO (as defined in the A&R Credit Agreement), the interest rates applicable to the 2018 First Lien Term Loan Facility will be reduced by 0.25% per annum.

The 2018 Senior Secured Credit Facility is secured by a perfected first priority security interest in all of our and our wholly owned subsidiaries’ assets and all real and personal property (in each case, subject to certain exceptions and permitted liens).

Subject to reinvestment rights, the 2018 Senior Secured Credit Facility is subject to mandatory prepayment provisions. These provisions include, without limitation, a prepayment requirement with net cash proceeds from certain asset sales and casualty events (subject to customary reinvestment rights) and the incurrence of certain indebtedness, in each case subject to certain exceptions. There is also an annual prepayment requirement which commenced in the year ending December 31, 2018, in an amount equal to 50% (with stepdowns commencing if the first lien net leverage ratio is below certain agreed upon thresholds) of Excess Cash Flow (as defined in the A&R Credit Agreement) for the applicable fiscal year, minus the amount of any voluntary prepayments during such Excess Cash Flow Period or on or prior to the Excess Cash Flow Calculation Date to the extent not previously deducted pursuant to the terms of the 2018 Senior Secured Credit Facility (as such terms are defined in the A&R Credit Agreement). It is expected that, to the extent that mandatory prepayments are required, prepayments will be applied to prepay the term loan borrowings under the 2018 Senior Secured Credit Facility.

The 2018 Senior Secured Credit Facility imposes certain restrictions on our activities, including, without limitation, and subject to certain exceptions, restrictions on our ability to: incur debt, incur liens, make

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dispositions, make investments, make restricted payments, enter into transactions with affiliates, enter into agreements with negative pledge clauses, change the nature of our business, change our fiscal year, make payments of junior lien debt (including the notes issued hereby) and subordinated debt, amend the terms of our junior lien debt (including the notes issued hereby) and subordinated debt, amend the terms of our organizational documents and other material agreements, and enter into speculative transactions.

If an event of default under the 2018 Senior Secured Credit Facility occurs and is continuing, the principal amount outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable.

The Term Loan Upsize

On July 16, 2018, we entered into the First Amendment Agreement, pursuant to which we upsized the 2018 First Lien Term Loan Facility by way of the TLB Incremental Facility by US$105 million. The TLB Incremental Facility was funded on the same terms and pricing as the existing 2018 First Lien Term Loan Facility. The proceeds from the TLB Incremental Facility were used (i) to finance the acquisition of the Central Bundle, (ii) to pay related fees and expenses incurred in connection with the First Amendment and the Central Bundle acquisition, and (iii) to increase our available cash on hand to fund general corporate purposes, including future capital expenditures.

Second Priority Senior Secured Notes

On February 22, 2017, we issued US$255.0 million principal amount of second priority senior secured notes with a final maturity date of March 1, 2024, or the 8.25% Notes. Subject to certain exceptions and permitted liens, the 8.25% Notes are secured by a second priority lien on the assets that secure our 2018 Senior Secured Credit Facility. The 8.25% Notes rank pari passu in right of payment with all existing and future senior indebtedness, and, to the extent of the value of the collateral, rank effectively senior to any unsecured senior indebtedness. The 8.25% Notes were issued pursuant to an indenture dated February 22, 2017 between us, the guarantors and the trustees, or the Indenture, as supplemented by a supplemental indenture dated March 13, 2018. The 8.25% Notes are guaranteed by all of our Restricted Subsidiaries (as defined in the Indenture). The 8.25% Notes accrue interest at the rate of 8.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2017.

We may, upon not less than 30 nor more than 60 days’ notice, redeem the 8.25% Notes prior to March 1, 2020 at a redemption price equal to 100% of the principal amount of the 8.25% Notes redeemed, plus an applicable premium and accrued and unpaid interest, if any, to the applicable exemption date.

On or after March 1, 2020, we may, on one or more occasions, redeem the 8.25% Notes, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date, if redeemed during the twelve month period commencing on March 1 of the years set forth below:

Period	Redemption Price
2020		104.125	%
2021		102.750	%
2022		101.375	%
2023 and thereafter		100.000	%

In the event of a change of control (as defined in the Indenture), each holder of the 8.25% Notes shall have the right to cause us to repurchase all or any part of such holder’s 8.25% Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

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We may redeem, in the aggregate, up to 40% of the principal amount of the Notes with the net cash proceeds of one or more equity offerings by us or any direct or indirect parent of us to the extent the net cash proceeds thereof are contributed to our common equity capital or used to purchase our capital stock (other than disqualified stock), at a redemption price of 108.25% plus accrued and unpaid interest to the redemption date, provided that at least 60% of the principal amount of the Notes remain outstanding after such redemption and such redemption occurs within 90 days of the closing of such an offering upon not less than 30 nor more than 60 days’ notice mailed to each holder of the Notes.

The 8.25% Notes may also be subject to redemption or mandatory disposition following a determination by any applicable gaming regulatory authority that the holder or beneficial owner of such 8.25% Notes is unsuitable to hold the 8.25% Notes or upon the failure of the holder or beneficial owner to comply with certain disclosure requirements.

The Indenture contains various restrictive covenants customary for similar indebtedness, including, but not limited to, covenants restricting our ability to incur indebtedness, create liens, issue disqualified stock and preferred stock, sell assets, make distributions or other Restricted Payments (as defined in the Indenture), make investments, enter into transactions with affiliates and merge or consolidate. There are also restrictions in the Indenture on dividend payments. See “Dividend Policy”.

In February and March 2018, we sought and received the consent of its noteholders following the consent solicitation process of our 8.25% Notes, or the Consent Solicitation, to amend the limitation on the restricted payments covenant and the asset sales covenant in the Indenture in order to allow for a one-time restricted payment of up to US$100.0 million. Pursuant to the Consent Solicitation, we made consent payments in the aggregate amount of $5,084,280 to its noteholders.

Vernon Mortgage

On January 10, 2014, we completed the purchase of the land and building of the existing Vernon Casino for approximately $8,436,000 including closing costs. We paid for the purchase with approximately $3,786,000 in cash and financed the remaining amount with the assumption of a $4,650,000 mortgage secured by the land and building. The mortgage bears a fixed interest rate of 4.29% per annum and the $3,942,000 outstanding principal amount matures on April 2, 2019.

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DESCRIPTION OF SHARE CAPITAL

General

The following is a summary of the rights of our common shares as set forth in our articles and bylaws, as each will be amended and restated in connection with this offering, and certain related sections of the Canada Business Corporations Act, or CBCA. This summary does not purport to be complete and is qualified in its entirety by the full text of our amended and restated articles and bylaws.

Upon the closing of this offering, our authorized share capital will consist of an unlimited number of common shares, each without par value. Immediately following the closing of this offering, we expect to have                issued and outstanding common shares (                common shares if the underwriters’ option to purchase additional common shares is exercised in full). Immediately following the closing of this offering we also expect to have                outstanding vested and unvested restricted share units granted pursuant to our equity incentive plans to acquire                common shares and                 restricted share units available for grant under our equity incentive plans to acquire                common shares.

The following description of our share capital and provisions of our amended and restated articles and bylaws are summaries of material terms and provisions and are qualified by reference to our amended and restated articles and bylaws, copies of which have been filed with the SEC as exhibits to the registration statement of which this prospectus is a part. The description of our common shares reflects amendments to our amended and restated articles and bylaws that will become effective immediately prior to the closing of this offering.

Common Shares

The holders of our common shares are entitled to one vote for each share held at any meeting of shareholders. The holders of our common shares are entitled to receive dividends as and when declared by our board of directors. In the event of our liquidation, dissolution or winding-up or other distribution of our assets among our shareholders, the holders of our common shares are entitled to share pro rata in the distribution of the balance of our assets. There are no preemptive, redemption, purchase or conversion rights attaching to our common shares. There are no sinking fund provisions applicable to our common shares. Our common shares are issued in fully registered form. The common shares offered in this offering, upon payment and delivery in accordance with the underwriting agreement, will be fully paid and non-assessable.

Certain Important Provisions of Our Amended and Restated Articles of Incorporation and the CBCA

The following is a summary of certain important provisions of our articles and certain related sections of the CBCA. Please note that this is only a summary and is not intended to be exhaustive. This summary is subject to, and is qualified in its entirety by reference to, the provisions of our articles and the CBCA.

Stated Objects of Purpose

Our articles do not contain stated objects or purposes and do not place any limitations on the business in which we engage.

Directors

Power to vote on matters in which a director is materially interested. The CBCA states that a director must disclose to us, in accordance with the provisions of the CBCA, the nature and extent of an interest that the director has in a material contract or material transaction, whether made or proposed, with us, if the director is a party to the contract or transaction, is a director or an officer or an individual acting in a similar capacity of a party to the contract or transaction, or has a material interest in a party to the contract or transaction.

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A director who holds an interest in respect of any material contract or transaction into which we have entered or propose to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless the contract or transaction (a) relates primarily to the director’s remuneration as a director, officer, employee or agent of us or an affiliate, (b) is for indemnity or insurance otherwise permitted under the CBCA or (c) is with an affiliate.

Directors’ power to determine the remuneration of directors. The CBCA provides that the remuneration of our directors, if any, may be determined by our directors subject to our articles and bylaws. That remuneration may be in addition to any salary or other remuneration paid to any of our employees who are also directors.

Retirement or non-retirement of directors under an age limit requirement. Neither our articles nor the CBCA impose any mandatory age-related retirement or non-retirement requirement for our directors.

Number of shares required to be owned by a director. Neither our articles nor the CBCA provide that a director is required to hold any of our shares as a qualification for holding his or her office.

Action Necessary to Change the Rights of Holders of Our Shares

Our shareholders can authorize the alteration of our articles to create or vary the special rights or restrictions attached to any of our shares by passing a special resolution. However, a right or special right attached to any class or series of shares may not be prejudiced or interfered with unless the shareholders holding shares of that class or series to which the right or special right is attached consent by a separate special resolution. A special resolution means a resolution passed by (a) not less than two-thirds of the votes cast by the applicable class or series of shareholders who vote in person or by proxy at a meeting or (b) a resolution consented to in writing by all of the shareholders entitled to vote holding the applicable class or series of shares.

Shareholder Meetings

We must hold an annual general meeting of our shareholders at least once every year at a time and place determined by our board of directors, provided that the meeting must not be held later than 15 months after the preceding annual general meeting but no later than six months after the end of the preceding financial year. A meeting of our shareholders may be held anywhere in Canada, or provided that the shareholders agree, anywhere outside of Canada.

Our directors may, at any time, call a special meeting of our shareholders. Shareholders holding not less than 5% of our issued voting shares may also cause our directors to call a shareholders’ meeting. A notice to convene a meeting, specifying the date, time and location of the meeting, and, where a meeting is to consider special business, the general nature of the special business, must be sent to shareholders entitled to vote at that meeting, to each director and to the auditor not less than 21 days prior to the meeting, although, as a result of applicable securities laws, the time for notice is effectively longer.

Under the CBCA, shareholders entitled to notice of a meeting may waive or reduce the period of notice for that meeting; however, the notice requirements of applicable securities laws must be met. The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any person entitled to notice does not invalidate any proceedings at that meeting.

A quorum for meetings is two persons present and holding, or represented by proxy, 5% of the issued shares entitled to be voted at the meeting. If a quorum is not present at the opening of the meeting, the shareholders may adjourn the meeting to a fixed time and place but may not transact any further business.

Holders of our common shares are entitled to attend meetings of our shareholders. Our directors, our president, our secretary (if any), our auditor, the scrutineer and any other persons invited by our chairman or

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directors or with the consent of those at the meeting are entitled to attend any meeting of our shareholders but will not be counted in the quorum or be entitled to vote at the meeting unless he or she is a shareholder or proxyholder entitled to vote at the meeting.

Common Share Constraints Required by Gaming Regulators and Change of Control

Our articles do not contain any change of control limitations with respect to a merger, acquisition or corporate restructuring that involves us. Our articles do contain change of control limitations with respect to a transfer, sale or other disposition of our common shares and share ownership restrictions.

We and our shareholders are subject to certain restrictions, constraints and conditions on ownership of our common shares imposed by the applicable 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. See “Risk Factors—Risks Related to this Offering—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.”

In Alberta, any sale, assignment or transfer of a 5% or greater interest in Gateway must be disclosed to the AGLC within 10 business days after the effective date of the transaction and approved by the board of the AGLC. Prior approval of the AGLC is required for the acquisition of any “financial interest” in us, our business or in a property to which our AGLC license relates, in a manner other than by way of a sale, assignment or transfer. A “financial interest” is defined to include any direct, indirect or contingent interest (i) whether as owner, partial or otherwise, of an interest, beneficial owner, owner of shares or owner through trusteeship, investment or otherwise, (ii) in management, whether by management agreement, partnership agreement or other agreement, or (iii) because of having loaned or advanced or caused to be loaned or advanced money or anything of value, with or without security.

In British Columbia, approval of the GPEB is required in advance of the acquisition or disposition of a 5% or greater ownership or beneficial ownership of common shares by any person or group of persons acting in concert. Further, through the OSAs, the BCLC restricts share ownership of our common shares without approval from the BCLC and GPEB. No person or group of persons acting jointly or in concert may hold or beneficially own a Significant Interest without obtaining prior written consent of GPEB and the BCLC. In addition, any person or group of persons acting jointly or in concert holding or beneficially owning, either directly or indirectly, a Significant Interest in our common shares must obtain GPEB and the BCLC’s consent prior to disposing or acquiring common shares or disposing of any part of that interest if such disposition or acquisition would result in a change of control of Gateway. A “Significant Interest” for purposes of the BCLC and the OSAs is an interest greater than 5% of our issued and outstanding common shares.

In Ontario, the common shares are also subject to the restrictions set out in the COSAs. Under each COSA, we must disclose when any person becomes the holder or beneficial owner of our voting securities or the voting securities of one of our control persons holding, in the aggregate, more than 5% of the votes attaching to the total of such voting securities, within 30 days of the transaction. Further, each COSA provides that no person may beneficially acquire, directly or indirectly, more than 10% of our voting securities or the voting securities of one of our control persons without the consent of the OLG. For greater certainty, any person holding more than 10% of our voting securities or the voting securities of one of our control persons will not, without prior written consent of OLG, effect an acquisition or disposition of such voting securities to the extent that such acquisition or disposition would result in a change of control of Gateway. See “Business—Operating Agreements and Licenses”.

On June 25, 2012, we amended our articles to include specific provisions, which we refer to as the Share Restrictions, restricting the ownership of common shares in order to accommodate and ensure compliance with the MCOSA constraints. Prior to the completion of the offering, we intend to file an amendment to our articles

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approved by existing shareholders so that the Share Restrictions contained therein will reflect the constraints prescribed in the COSAs and the new OSAs. In accordance with the our articles, we are able to enforce the Share Restrictions by placing stop transfers on common shares, suspending all voting, dividend and other distribution rights on common shares and seeking injunctive or other relief to ensure compliance with the Share Restrictions.

Limitations on Liability and Indemnification of Directors and Officers

Under the CBCA, we may indemnify our current or former directors or officers or another individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity. The CBCA also provides that we may also advance moneys to a director, officer or other individual for costs, charges and expenses incurred in connection with such a proceeding.

However, indemnification is prohibited under the CBCA unless the individual:

• acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and

• in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful.

Our bylaws require us to indemnify each of our current or former directors or officers and each individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity.

Under the CBCA, we are permitted to purchase and maintain insurance for the benefit of each of our current or former directors or officers and each person who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity.

Prior to the completion of the offering we intend to enter into indemnity agreements with our directors and certain officers which provide, among other things, that we will indemnify, including but not limited to the indemnity permitted under the CBCA, him or her for losses reasonably incurred by reason of being or having been a director or officer; provided that, we shall not indemnify such individual if, among other things, he or she did not act honestly and in good faith with a view to our best interests and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual did not have reasonable grounds for believing that his or her conduct was lawful, and in so acting was in breach of the obligations under the indemnity agreement.

At present, we are not aware of any pending or threatened litigation or proceeding involving any of our directors, officers, employees or agents in which indemnification would be required or permitted.

Listing

We have applied to list our common shares on NYSE under the symbol “GTWY.”

Transfer Agent and Registrar

The U.S. transfer agent and registrar for the common shares is                 , located at                 .

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Exchange Controls

There is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would affect the remittance of dividends, interest or other payments by us to non-resident holders of our common shares, other than withholding tax requirements

There is no limitation imposed by Canadian law or by our articles of amendment on the right of a non-resident to hold or vote our common shares, other than those imposed by the Investment Canada Act and the Competition Act (Canada). These acts will generally not apply except where a control of an existing Canadian business or company, which has Canadian assets or revenue over a certain threshold, is acquired and will not apply to trading generally of securities listed on a stock exchange.

Competition Act

Limitations on the ability to acquire and hold our common shares may be imposed by the Competition Act (Canada). This legislation permits the Commissioner of Competition, or Commissioner, 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. This legislation grants the Commissioner jurisdiction, for up to one year after the acquisition has been substantially completed, to seek a remedial order, including an order to prohibit the acquisition or require divestitures, from the Canadian Competition Tribunal, which order may be granted where the Competition Tribunal finds that the acquisition substantially prevents or lessens, or is likely to substantially prevent or lessen, competition.

This legislation also requires any person or persons who intend to acquire more than 20% of our voting shares or, if such person or persons already own more than 20% of our voting shares prior to the acquisition, more than 50% of voting our shares, to file a notification with the Canadian Competition Bureau if certain financial thresholds are exceeded. Where a notification is required, unless an exemption is available, the legislation prohibits completion of the acquisition until the expiration of the applicable statutory waiting period, unless the Commissioner either waives or terminates such waiting period.

Investment Canada Act

The Investment Canada Act requires each “non-Canadian” (as defined in the Investment Canada Act) who acquires “control” of an existing “Canadian business”, to file a notification in prescribed form with the responsible federal government department or departments not later than 30 days after closing, provided the acquisition of control is not a reviewable transaction by Canadian authorities. Subject to certain exemptions, a transaction that is reviewable under the Investment Canada Act may not be implemented until an application for review has been filed and the responsible Minister of the federal cabinet has determined that the investment is likely to be of “net benefit to Canada” taking into account certain factors set out in the Investment Canada Act. Under the Investment Canada Act, an investment in our common shares by a non-Canadian who is a World Trade Organization member country investor, including a United States investor, would be reviewable only if it were an investment to acquire control of us pursuant to the Investment Canada Act and the value of our assets (as determined pursuant to the Investment Canada Act) was equal to or greater than a specified amount, which varies annually. The specified threshold amount is $369.0 million in 2015. As of April 24, 2015, this financial threshold will change for World Trade Organization member country investors, including United States investors, who are not “state-owned enterprises” (as defined in the Investment Canada Act), with the result that the acquisition of control of us by such an investor would be reviewable only if our enterprise value (as determined pursuant to the Investment Canada Act) was equal to or greater than $600.0 million.

The Investment Canada Act contains various rules to determine if there has been an acquisition of control. For example, for purposes of determining whether an investor has acquired control of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions: the acquisition of a majority of the

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undivided ownership interests in the voting shares of the corporation is deemed to be acquisition of control of that corporation; the acquisition of less than a majority, but one-third or more, of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and the acquisition of less than one third of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.

Under the new national security review regime in the Investment Canada Act, review on a discretionary basis may also be undertaken by the federal government in respect to a much broader range of investments by a non-Canadian to “acquire, in whole or part, or to establish an entity carrying on all or any part of its operations in Canada.” No financial threshold applies to a national security review. The relevant test is whether such investment by a non-Canadian could be “injurious to national security.” The federal government has broad discretion to determine whether an investor is a non-Canadian and therefore subject to national security review. Review on national security grounds is at the discretion of the Canadian government, and may occur on a pre- or post-closing basis.

Certain transactions relating to our common shares will generally be exempt from the Investment Canada Act, subject to the federal government’s prerogative to conduct a national security review, including:

a) the acquisition of our common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities;

b) the acquisition of control of us in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the Investment Canada Act; and

c) the acquisition of control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of us, through ownership of our common shares, remains unchanged.

Comparison of Shareholder Rights

We are a corporation governed by the CBCA. The following discussion summarizes material differences between the rights of holders of our common shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the state of Delaware, which result from differences in governing documents and the laws of Ontario and Delaware. This summary is qualified in its entirety by reference to the Delaware General Corporation Law, or the DGCL, the CBCA, and our articles.

Delaware	CBCA
Stockholder/Shareholder Approval of Business Combinations; Fundamental Changes
Under the DGCL, certain fundamental changes such as amendments to the certificate of incorporation, a merger, consolidation, sale, lease, exchange or other disposition of all or substantially all of the property of a corporation not in the usual and regular course of the corporation’s business, or a dissolution of the corporation, are generally required to be approved by the holders of a majority of the outstanding stock entitled to vote on the matter, unless the certificate of incorporation requires a higher percentage.	Under the CBCA and our articles, certain fundamental changes, such as amendments to the articles, certain bylaws amendments, continuances to another jurisdiction, certain amalgamations, a lease, sale or transfer of all or substantially all of the property of a company other than in the ordinary course of business, liquidations, dissolutions, and certain arrangements are required to be approved by special resolution.

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Delaware

CBCA

However, under the DGCL, mergers in which less than 20% of a corporation’s stock outstanding immediately prior to the effective date of the merger is issued generally do not require stockholder approval. In certain situations, the approval of a business combination may require approval by a certain number of the holders of a class or series of shares. In addition, Section 251(h) of the DGCL provides that stockholders of a constituent corporation need not vote to approve a merger if: (i) the merger agreement permits or requires the merger to be effected under Section 251(h) and provides that the merger shall be effected as soon as practicable following the tender offer or exchange offer, (ii) a corporation consummates a tender or exchange offer for any and all of the outstanding stock of such constituent corporation that would otherwise be entitled to vote to approve the merger, (iii) following the consummation of the offer, the stock accepted for purchase or exchanges plus the stock owned by the consummating corporation equals at least the percentage of stock that would be required to adopt the agreement of merger under the DGCL, (iv) the corporation consummating the offer merges with or into such constituent corporation and (v) each outstanding share of each class or series of stock of the constituent corporation that was the subject of and not irrevocably accepted for purchase or exchange in the offer is to be converted in the merger into, or the right to receive, the same consideration to be paid for the shares of such class or series of stock of the constituent corporation irrevocably purchased or exchanged in such offer. The DGCL does not contain a procedure comparable to a plan of arrangement under CBCA.

A special resolution is a resolution (i) passed by not less than two-thirds of the votes cast by the shareholders who voted in respect of the resolution at a meeting duly called and held for that purpose; or (ii) signed by all shareholders entitled to vote on the resolution. In specified cases, a special resolution to approve an extraordinary corporate action is also required to be approved separately by the holders of a class or series of shares, including in certain cases a class or series of shares not otherwise carrying voting rights. In specified extraordinary corporate actions, all shares have a vote, whether or not they generally vote and, in certain cases, have separate class votes. In addition, the CBCA provides that, where it is not practicable for a corporation (that is not an insolvent corporation) to effect such a fundamental change under any other provision contemplated under the CBCA, the corporation may apply to a court for an order approving an arrangement. Under the CBCA, arrangements are permitted and a company may make any proposal it considers appropriate. In general, a plan of arrangement is approved by a company’s board of directors and then is submitted to a court for approval. It is customary for a company in such circumstances to apply to a court initially for an interim order governing various procedural matters prior to calling any security holder meeting to consider the proposed arrangement. Plans of arrangement involving shareholders must be approved by a special resolution of shareholders, (or such higher approval that a court may require) and may provide that holders of shares not normally entitled to vote may vote on the arrangement. The court determines, among other things, to whom notice shall be given and whether, and in what manner, approval of any person is to be obtained and also determines whether any shareholders may dissent from the proposed arrangement and receive payment of the fair value of their shares. Following compliance with the procedural steps contemplated in any such interim order (including as to obtaining security holder approval), the court would conduct a final hearing and approve or reject the proposed arrangement. The CBCA does not contain a provision comparable to Section 251(h) of the DGCL.

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Delaware	CBCA
Special Vote Required for Combinations with Interested Stockholders/Shareholders
Section 203 of the DGCL provides (in general) that a corporation may not engage in a business combination with an interested stockholder for a period of three years after the time of the transaction in which the person became an interested stockholder. The prohibition on business combinations with interested stockholders does not apply in some cases, including if: (i) the board of directors of the corporation, prior to the time of the transaction in which the person became an interested stockholder, approves (a) the business combination or (b) the transaction in which the stockholder becomes an interested stockholder; (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or (iii) the board of directors and the holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder approve the business combination on or after the time of the transaction in which the person became an interested stockholder. For the purpose of Section 203, the DGCL, subject to specified exceptions, generally defines an interested stockholder to include any person who, together with that person’s affiliates or associates, (i) owns 15% or more of the outstanding voting stock of the corporation (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or (ii) is an affiliate or associate of the corporation and owned 15% or more of the outstanding voting stock of the corporation at any time within the previous three years.	The CBCA does not contain a provision comparable to Section 203 of the DGCL with respect to business combinations. However, in Canada, takeovers and other related party transactions are addressed in provincial securities legislation and policies which may apply to us. In addition, Multilateral Instrument 61-101—Protection of Minority Security Holders in Special Transactions or MI 61-101 which is applicable to Canadian reporting issuers contains detailed requirements in connection with “related party transactions.” A “related party transaction” as defined under M I61-101 means, generally, any transaction by which an issuer, directly or indirectly, consummates one or more specified transactions with a related party, including purchasing or disposing of an asset, issuing securities or assuming liabilities. “Related party” as defined in MI 61-101 includes (i) directors and senior officers of the issuer, (ii) holders of voting securities of the issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities and (iii) holders of a sufficient number of any securities of the issuer to materially affect control of the issuer. MI 61-101 requires, subject to certain exceptions, specific detailed disclosure in the proxy circular sent to security holders in connection with a related party transaction where a meeting is required and, subject to certain exceptions, the preparation of a formal valuation of the subject matter of the related party transaction and any non-cash consideration offered in connection therewith, and the inclusion of a summary of the valuation in the proxy circular. MI 61-101 also requires, subject to certain exceptions, that an issuer not engage in a related party transaction unless the disinterested shareholders of the issuer have approved the related party transaction by a simple majority of the votes cast.
Appraisal Rights; Rights to Dissent
Under the DGCL, a stockholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his or her shares in lieu of the	The CBCA provides that shareholders of a corporation are entitled to exercise dissent rights and to be paid the fair value of their shares in respect of which such shareholders dissent in connection with specified matters, including: (i) any amalgamation with another corporation (other than with certain affiliated corporations); (ii) an amendment to the

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Delaware	CBCA
consideration he or she would otherwise receive in the transaction. For example, a stockholder is entitled to appraisal rights in the case of a merger or consolidation if the shareholder is required to accept in exchange for the shares anything other than: (i) shares of stock of the corporation surviving or resulting from the merger or consolidation, or depository receipts in respect thereof; (ii) shares of any other corporation, or depository receipts in respect thereof, that on the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 shareholders; (iii) cash instead of fractional shares of the corporation or fractional depository receipts of the corporation; or (iv) any combination of the shares of stock, depository receipts and cash instead of the fractional shares or fractional depository receipts.	corporation’s articles to add, change or remove any provisions restricting or constraining the issue, transfer or ownership of shares of the class in respect of which a shareholder is dissenting; (iii) an amendment to the corporation’s articles to add, change or remove any restriction upon the business or businesses that the corporation may carry on; (iv) a continuance under the laws of another jurisdiction; (v) a sale, lease or exchange of all, or substantially all, the property of the corporation other than in the ordinary course of business; (vi) pursuant to a court order permitting a shareholder to dissent in connection with an application to the court for an order approving an arrangement proposed by the corporation; (vii) the carrying out of a going-private transaction or a squeeze-out transaction; and (viii) certain amendments to the articles of a corporation which require a separate class or series vote by a holder of shares of any class or series, including in certain cases a class or series of shares not otherwise carrying voting rights; provided that, a shareholder is not entitled to dissent if any amendment to the articles is effected by a court order (a) approving a reorganization; or (b) made in connection with an action for an oppression remedy, described below.
Compulsory Acquisition
Under the DGCL, mergers in which one corporation owns 90% or more of each class of stock of a second corporation may be completed without the vote of the second corporation’s board of directors or shareholders.	The CBCA provides that if, within 120 days after the making of an offer to acquire shares, or any class of shares, of a company, the offer is accepted by the holders of not less than 90% of the shares (other than the shares held by the offeror or an affiliate or associate of the offeror) of any class of shares to which the offer relates, the offeror is entitled, upon giving proper notice before the earlier of (i) 60 days from the termination of the offer; and (ii) 180 days from the making of the offer, to acquire (on the same terms on which the offeror acquired shares from those holders of shares who accepted the offer) the shares held by those holders of shares of that class who did not accept the offer. Offerees may, within 20 days of receiving notice, notify the offeror that they are not transferring their shares to the offeror but are demanding to be paid fair value as determined by a court.
Stockholder/Shareholder Consent to Action Without Meeting
Under the DGCL, unless otherwise provided in the certificate of incorporation, any action that can be	Under the CBCA, an action that can be taken at a meeting may only be taken without a meeting if the

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Delaware	CBCA
taken at a meeting of the stockholders may be taken without a meeting if written consent to the action is signed by the holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take the action at a meeting of the stockholders.	resolution with respect to that matter is signed by all shareholders entitled to vote thereon.
Special Meetings of Stockholders/Shareholders
Under the DGCL, a special meeting of shareholders may be called by the board of directors of by such persons authorized in the certificate of incorporation or bylaws.	Under the CBCA and our bylaws, the directors may call a special meeting of the shareholders. Additionally, under the CBCA, the holders of not less than 5% of the issued shares of a company that carry the right to vote at a meeting of shareholders may requisition that the directors call a meeting of shareholders for the purpose of transacting any business that may be transacted at a shareholders meeting. Upon receiving a requisition that complies with the technical requirements set out in the CBCA, the directors must, subject to certain limited exceptions, call a meeting of shareholders. If the directors do not call such a meeting within 21 days after receiving the requisition, the requisitioning shareholders or any of them may call the meeting.
Distributions and Dividends; Repurchases and Redemptions
Under the DGCL, subject to any restrictions contained in the certificate of incorporation, a corporation may pay dividends out of capital surplus or, if there is no surplus, out of net profits for the current and/or the preceding fiscal year in which the dividend is declared, as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by issued and outstanding shares having a preference upon the distribution of assets. Surplus is defined in the DGCL as the excess of the net assets over capital, as such capital may be adjusted by the board. A Delaware corporation may purchase or redeem shares of any class except when its capital is impaired or would be impaired by the purchase or redemption. A corporation may, however, purchase or redeem out of capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced.	Under the CBCA, subject to any restrictions contained in its articles, a company may pay a dividend in fully paid shares, money or other property unless there are reasonable grounds for believing that the company is or after the payment would be unable to pay its liabilities as they become due or the realizable value of its assets would be less than the aggregate of its liabilities and its stated capital of all classes. The purchase or other acquisition by a company of its shares is permitted subject to solvency tests similar to those applicable to the payment of dividends (as set out above).
Vacancies on Board of Directors
Under the DGCL, a vacancy or a newly created directorship may be filled by a majority of the directors	Under the CBCA and our articles, a vacancy among the directors created by the removal of a director may

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Delaware	CBCA
then in office, although less than a quorum, or by the sole remaining director, unless otherwise provided in the certificate of incorporation or bylaws. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director has been elected expires.	be filled by the shareholders at the meeting at which the director is removed or, if not so filled, a quorum of directors may fill a vacancy among the directors unless the vacancy results from an increase in the number of the minimum or maximum number of directors or a failure to elect the number or minimum number of directors provided for in the articles. If the directors are empowered to determine the number of directors, the directors may appoint additional directors provided that, after such appointment, the total number of directors is not greater than one and one-third times the number of directors required to have been elected at the last annual meeting of shareholders.
Constitution and Residency of Directors
The DGCL does not have residency requirements, but a corporation may prescribe qualifications for directors under its certificate of incorporation or bylaws.	Under the CBCA, subject to certain limited exceptions, at least 25% of the directors (or if a company has less than four directors, at least one director) of a company must be resident Canadians. The CBCA also requires that a corporation whose securities are publicly traded have not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.
Removal of Directors; Terms of Directors
Under the DGCL, except in the case of a corporation with a classified board or with cumulative voting, any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at an election of directors.	Under the CBCA, provided that articles of a corporation do not provide for cumulative voting, shareholders of the corporation may, by ordinary resolution passed at a special meeting, remove any director or directors from office. Our bylaws allow for the removal of a director by ordinary resolution of the shareholders. If holders of a class or series of shares have the exclusive right to elect one or more directors, a director elected by them may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.
Inspection of Books and Records
Under the DGCL, any holder of record of stock or a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may inspect the corporation’s books and records for a proper purpose.	Under the CBCA, directors, shareholders, creditors and their representatives may inspect certain of the records of a company during usual business hours of the company and take copies of extracts free of charge.

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Delaware	CBCA
Amendment of Governing Documents
Under the DGCL, a certificate of incorporation may be amended if: (i) the board of directors adopts a resolution setting forth the proposed amendment, declares the advisability of the amendment and directs that it be submitted to a vote at a meeting of shareholders; provided that unless required by the certificate of incorporation, no meeting or vote is required to adopt an amendment for certain specified changes; and (ii) the holders of a majority of shares of stock entitled to vote on the matter approve the amendment, unless the certificate of incorporation requires the vote of a greater number of shares. If a class vote on the amendment is required by the DGCL, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other provisions of the DGCL. Under the DGCL, the board of directors may amend a corporation’s bylaws if so authorized in the certificate of incorporation. The shareholders of a Delaware corporation also have the power to amend bylaws.	Under the CBCA, any amendment to the articles of a corporation generally requires shareholder approval by special resolution. If a proposed amendment requires approval by special resolution (which requires the approval of not less than two-thirds of the votes cast by the shareholders), the holders of shares of a class (or of a series of a class, if the proposed amendment would affect such series differently from the other series of shares of such class) are entitled to vote separately as a class or series if the proposed amendment affects the class or series as specified in the CBCA, whether or not the class or series otherwise carries the right to vote. The CBCA provides, however, that no rights, privileges, restrictions or conditions attached to a series of shares shall confer on a series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. Under the CBCA, unless the articles or bylaws otherwise provide, the board of directors of a corporation may, by resolution, make, amend or repeal bylaws that regulate the business or affairs of a corporation provided that any such by-law, amendment or repeal of a by-law must be confirmed at the next meeting of shareholders by the affirmative vote of a majority of the shareholders entitled to vote thereat. Any by-law or amendment is effective when made by the board of directors but ceases to be effective if not confirmed by the shareholders. If a by-law, amendment or repeal is rejected by shareholders, or the directors of a corporation do not submit a by-law, an amendment or a repeal to the shareholders at the next meeting of shareholders, then such by-law, amendment or repeal will cease to be effective and no subsequent resolution of the directors to make, amend or repeal a by-law having substantially the same purpose or effect is effective until it is confirmed or confirmed as amended by the shareholders.
Indemnification of Directors and Officers
Under the DGCL, subject to specified limitations in the case of derivative suits brought by a corporation’s stockholders in its name, a corporation may indemnify any person who is made a party to any action, suit or proceeding on account of being a director, officer, employee or agent of the corporation (or was serving at the request of the corporation in such capacity for another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys’	Under the CBCA, a company may indemnify its current or former directors or officers or another individual who acts or acted at the company’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other

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Delaware	CBCA
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding, provided that there is a determination that: (i) the individual acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation; and (ii) in a criminal action or proceeding, the individual had no reasonable cause to believe his or her conduct was unlawful. Without court approval, however, no indemnification may be made in respect of any derivative action in which an individual is adjudged liable to the corporation, except to the extent the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity. The DGCL requires indemnification of directors and officers for expenses (including attorneys’ fees) actually and reasonably relating to a successful defense on the merits or otherwise of a derivative or third-party action. Under the DGCL, a corporation may advance expenses relating to the defense of any proceeding to directors and officers upon the receipt of an undertaking by or on behalf of the individual to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified.	proceeding in which the individual is involved because of his or her association with the company or another entity. The CBCA also provides that a company may advance moneys to a director, officer or other individual for costs, charges and expenses incurred in connection with such a proceeding. However, indemnification is prohibited under the CBCA unless the individual (i) acted honestly and in good faith with a view to the company’s best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the company’s request; and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful. Our bylaws require us to indemnify each of our current or former directors or officers and each individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity.
Limited Liability of Directors
The DGCL permits the adoption of a provision in a corporation’s certificate of incorporation limiting or eliminating the monetary liability of a director to a corporation or its shareholders by reason of a director’s breach of the fiduciary duty of care. The DGCL does not permit any limitation of the liability of a director for: (i) breaching the duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith; (iii) engaging in intentional misconduct or a known violation of law; (iv) obtaining an improper personal benefit from the corporation; or (v) paying a dividend or approving a stock repurchase that was illegal under applicable law.	Under the CBCA, a director or officer of a company must (i) act honestly and in good faith with a view to the best interests of the company; (ii) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances; and (iii) comply with the CBCA, the regulations thereunder and the company’s articles, bylaws and any unanimous shareholder agreement. These statutory duties are in addition to duties under common law and equity. No provision in a contract or the articles, bylaws, or resolution of a company may relieve a director or officer of a company from the duty to act in accordance with the CBCA and the regulations thereunder, or from any liability for failing to do so.

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Delaware	CBCA
	The CBCA does not permit any limitation of a director’s liability other than in connection with the adoption of a unanimous shareholder agreement that restricts certain powers of the directors. If such a unanimous shareholder agreement were adopted, the parties who are given the power to manage or supervise the management of the business and affairs of the corporation under such agreement assume all of the liabilities of a director under the CBCA. Under the CBCA, a director is not liable for certain acts if the director has otherwise complied with his or her duties and otherwise exercised the degree of care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including relying in good faith, on (i) financial statements of the company represented to the director by an officer of the company or in a written report of the auditor of the company to fairly reflect the financial condition of the company; or (ii) a report of a person whose profession lends credibility to a statement made by the professional person.
Stockholder/Shareholder Lawsuits
Under the DGCL, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation; provided, however, that under Delaware case law, the plaintiff generally must be a stockholder not only at the time of the transaction which the subject of the suit, but through the duration of the derivative suit. Delaware law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated stockholders where the requirements for maintaining a class action have been met.	Under the CBCA, a current or former shareholder (including a current or former beneficial shareholder) of a company or any of its affiliates, a current or former director or officer of a company or any of its affiliates the “Director” appointed under the CBCA, or any other person who, in the discretion of the court, is a proper person may make an application to the court (each a “complainant”) for leave to bring an action in the name and on behalf of the company or any of its subsidiaries, or intervene in an action to which the company or any of its subsidiaries is a party, to prosecute or defend an action on behalf of a company (a derivative action). No derivative action may be brought unless the court is satisfied that (i) notice of the application for leave has been given to the directors of the company or its subsidiary of the complainant’s intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court, if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action; (ii) the complainant is acting in good faith; and (iii) it appears to be in the interests of the company for the action to be prosecuted or defended. Under the CBCA, upon the final disposition of a derivative action, the court may make any order it

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Delaware	CBCA
	determines to be appropriate. In addition, under the CBCA, a court may order a company to pay the complainant’s reasonable legal fees and other costs reasonably incurred by the complainant in connection with the action.
Oppression Remedy
Although the DGCL imposes upon directors and officers fiduciary duties of loyalty (i.e., a duty to act in a manner believed to be in the best interest of the corporation and its stockholders) and care, there is no remedy under the DGCL that is comparable to the CBCA’s oppression remedy.	The CBCA’s oppression remedy enables a court to make an order (interim or final) to rectify the matters complained of if the court is satisfied upon application by a complainant (as defined below) that (i) any act or omission of the company or any of its affiliates effects or threatens to effect a result, (ii) the business and affairs of the company or its affiliates are, have been or are threatened to be carried on or conducted in a manner, or (iii) the powers of the directors of the company or any of its affiliates are of have been exercised in a manner, that is, oppressive or unfairly prejudicial to, or that unfairly disregards, the interests of any security holder, creditor, director or officer of the company. Under the CBCA, a “complainant” includes a current or former shareholder (including a current or former beneficial shareholder) of a company or any of its affiliates, a current or former director or officer of a company or any of its affiliates, the “Director” appointed under the CBCA or any other person who, in the discretion of the court, is a proper person to bring the application. The oppression remedy provides the court with extremely broad and flexible jurisdiction to intervene in corporate affairs to protect shareholders and other complainants.
Blank Check Preferred Stock/Shares
Under the DGCL, the certificate of incorporation of a corporation may give the board the right to issue new classes of preferred shares with voting, conversion, dividend distribution, and other rights to be determined by the board at the time of issuance, which could prevent a takeover attempt and thereby preclude shareholders from realizing a potential premium over the market value of their shares. In addition, the DGCL does not prohibit a corporation from adopting a shareholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.	Under, and subject to, the CBCA, preferred shares may be issued in one or more series. The articles of incorporation may authorize a board of directors, without shareholder approval, to determine the maximum number of shares of each series, create an identifying name for each series and attach such special rights or restrictions, including redemption, dividend, liquidation and voting rights, as our board of directors may determine. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or

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Delaware	CBCA
	preventing a change of control of a corporation and may adversely affect the market price of a corporation’s common shares. In addition, the CBCA does not prohibit a corporation from adopting a shareholder rights plan, or “poison pill” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over market value for their shares.
Advanced Notice Requirements for Proposals of Stockholders/Shareholders
Delaware corporations typically have provisions in their bylaws that require a stockholder proposing a nominee for election to the board of directors or other proposals at an annual or special meeting of the stockholders to provide notice of any such proposals to the secretary of the corporation in advance of the meeting for any such proposal to be brought before the meeting of the stockholders. In addition, advance notice bylaws frequently require the stockholder nominating a person for election to the board of directors to provide information about the nominee, such as his or her age, address, employment and beneficial ownership of shares of the corporation’s capital stock. The stockholder may also be required to disclose, among other things, his or her name, share ownership and agreement, arrangement or understanding with respect to such nomination. For other proposals, the proposing stockholder is often required by the bylaws to provide a description of the proposal and any other information relating to such stockholder or beneficial owner, if any, on whose behalf that proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitation of proxies for the proposal and pursuant to and in accordance with the Exchange Act and the rules and regulations promulgated thereunder.	Under the CBCA, proposals with respect to the nomination of candidates for election to the board of directors may be made by certain registered or beneficial holders of shares entitled to be voted at an annual meeting of shareholders. To be eligible to submit a proposal, a shareholder must be the registered or beneficial holder of, or have support of the registered or beneficial holders of, (i) at least 1% of the total number of outstanding voting shares of the corporation, or (ii) voting shares whose fair market value is at least $2,000 and such registered or beneficial holder(s) must have held such shares for at least six months immediately prior to the day upon which the shareholder submits the proposal. In order for a proposal to include nominations of directors, it must be signed by one or more holders of shares representing not less than 5% of the shares (or shares of a class) entitled to vote at the special meeting. A proposal under the CBCA must include the name and address of the person submitting the proposal, the names and addresses of the person’s supporters (if applicable), the number of shares of the company owned by such persons and the date upon which such shares were acquired. If the proposal is submitted at least 90 days before the anniversary date of the notice of meeting sent to shareholders in connection with the previous annual meeting and the proposal meets other specified requirements, then the company shall either set out the proposal in the proxy circular of the company or attach the proposal thereto. In addition, if so requested by the person submitting the proposal, the company shall include in or attach to the proxy circular a statement in support of the proposal by the person and the name and address of the person. If a company refuses to include a proposal in a management proxy circular, the company shall notify

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Delaware

CBCA

the person in writing within 21 days after its receipt of the proposal (or proof of the person’s ownership of securities) of its intention to omit the proposal and the reasons therefor. In any such event, the person submitting the proposal may make application to a court for an order permitting the company to omit the proposal from the management proxy circular and the court may make such order as it determines appropriate. Any registered shareholder entitled to vote, or any beneficial shareholder whose shares are entitled to be voted, at a meeting of shareholders may also discuss at the meeting any matter in respect of which such shareholder would have been entitled to submit a proposal.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common shares. Future sales of substantial amounts of our common shares in the public market could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of common shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our common shares in the public market after such restrictions lapse. This may adversely affect the prevailing market price of our common shares and our ability to raise equity capital in the future.

Upon completion of this offering, we will have                  common shares outstanding, or                  common shares outstanding if the underwriters exercise their option in full to purchase additional common shares. Of these,                  common shares, or                 common shares if the underwriters exercise their option in full to purchase additional common shares, sold in this offering will be freely transferable without restriction or registration under the Securities Act, except for any shares purchased by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act. The remaining common shares are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 or 701 of the Securities Act. As a result of the contractual 180-day lock-up period described below and the provisions of Rules 144 and 701, these shares will be available for sale in the public market as follows:

Number of Shares	Date
	On the date of this prospectus.
	After                days from the date of this prospectus (subject, in some cases, to volume limitations).
	After 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

Rule 144

In general, a person who has beneficially owned our common shares that are restricted shares for at least six months would be entitled to sell such securities, provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned our common shares that are restricted shares for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three month period only a number of securities that does not exceed the greater of either of the following:

• 1% of the number of our common shares then outstanding, which will equal approximately                 common shares immediately after this offering, assuming no exercise of the underwriters’ option to purchase additional common shares; or

• the average weekly trading volume of our common shares on                 during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144 to the extent applicable.

Rule 701

In general, under Rule 701, any of our employees, executive officers, directors, consultants or advisors who purchases shares from us in connection with a compensatory share or option plan or other written agreement

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before the effective date of this offering is entitled to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirements or other restrictions contained in Rule 701.

The SEC has indicated that Rule 701 will apply to typical share options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and, subject to the contractual restrictions described below, beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by “affiliates” under Rule 144 without compliance with its one-year minimum holding period requirement.

Regulation S

Regulation S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements of the Securities Act.

Canadian Resale Restrictions

Any sale of any of our common shares which constitutes a “control distribution” under Canadian securities laws (generally a sale by a person or a group of persons holding more than 20% of our outstanding voting securities) will be subject to restrictions under applicable Canadian securities laws in addition to those restrictions noted above, unless the sale is qualified under a prospectus filed with Canadian securities regulatory authorities or if the issuer is a reporting issuer in a jurisdiction of Canada and prior notice of the sale is filed with the Canadian securities regulatory authorities at least seven days before any sale and there has been compliance with certain other requirements and restrictions regarding the manner of sale, payment of commissions, reporting and availability of current public information about us and compliance with applicable Canadian securities laws.

Registration Rights

We intend to enter into a registration rights agreement upon consummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the shares held by certain of our existing shareholders, as well as to cooperate in certain public offerings of such shares. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. See “Related Party Transactions—Investor and Registration Rights Agreement.”

Lock-up Agreements

All of our executive officers, directors and the holders of substantially all of our common shares have agreed, subject to limited exceptions, not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common shares or such other securities for a period of 180 days after the date of this prospectus, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC. After the offering, certain of our employees, including our executive officers, and/or directors may enter into written trading plans that are intended to comply with Rule 10b5-1 under the Exchange Act. Sales under these trading plans would not be permitted until the expiration of the lock-up agreements relating to the offering described above. See “Underwriting.”

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Equity Incentive Plans

Following this offering, we intend to file with the SEC a registration statement on Form S-8 under the Securities Act covering the common shares that are subject to outstanding restricted stock, restricted stock units and other awards that may be granted pursuant to our equity incentive plans. Shares covered by such registration statement will be available for sale in the open market following its effective date, subject to certain Rule 144 limitations applicable to affiliates and the terms of lock-up restrictions applicable to those shares.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS

The following discussion describes the material U.S. federal income tax consequences to U.S. Holders (as defined below) of the purchase, ownership and disposition of our common shares issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code , Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service, or the IRS, in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder of our common shares. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership and disposition of our common shares.

This discussion is limited to U.S. Holders that hold our common shares as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment) and that have acquired their common shares in this offering. This discussion does not address all U.S. federal income tax consequences relevant to a U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to U.S. Holders subject to special rules, including, without limitation:

• U.S. expatriates and former citizens or long-term residents of the United States;

• persons subject to the alternative minimum tax;

• persons holding our common shares as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

• banks, insurance companies, and other financial institutions;

• brokers, dealers or traders in securities;

• persons that directly, indirectly or constructively own 10% or more of the total combined voting power or value of all classes of our share capital;

• real estate investment trusts or regulated investment companies;

• S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);

• tax-exempt organizations or governmental organizations;

• persons deemed to our common shares under the constructive sale provisions of the Code;

• persons who hold or receive our commons shares pursuant to the exercise of any employee stock option or otherwise as compensation;

• persons that do not have the U.S. dollar as their functional currency;

• persons that are resident in or have a permanent establishment outside of the United States;

• tax-qualified retirement plans; and

• accrual method taxpayers who are required to recognize income for U.S. federal income tax purposes no later than when such income is taken into account in applicable financial statements.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common shares, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership

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and certain determinations made at the partner level. Accordingly, partnerships holding our common shares and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON SHARES ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a U.S. Holder

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of our common shares that, for U.S. federal income tax purposes, is or is treated as:

• an individual who is a citizen or resident of the United States;

• a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Passive Foreign Investment Company

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.

A non-U.S. entity treated as a corporation for U.S. federal income tax purposes generally will be a PFIC for U.S. federal income tax purposes for any taxable year if either:

• at least 75% of its gross income for such year is passive income (such as interest income); or

• 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 passive income or are held for the production of passive income.

For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other entity treated as a corporation for U.S. federal income tax purposes in which we own, directly or indirectly, 25% or more (by value) of the stock.

If we are classified as a PFIC for any taxable year during which you hold our common shares, we generally will continue to be treated as a PFIC with respect to your investment in our common shares for all succeeding years during which you hold the common shares, unless we cease to be a PFIC and you make a deemed sale election with respect to such common shares. If such election is made, you will be deemed to have sold the

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common shares you hold at their fair market value on the last day of the last taxable year in which we are classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below. After the deemed sale election, the common shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

For each taxable year that we are treated as a PFIC with respect to you, you will be subject to special tax rules with respect to any “excess distribution” (as defined below) you receive and any gain you realize from a sale or other disposition (including a pledge) of your common shares, unless you make a valid mark-to-market election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the common shares will be treated as an excess distribution. Under these special tax rules:

• the excess distribution or gain will be allocated ratably over your holding period for the common shares;

• the amount allocated to the current taxable year, and any taxable years in your holding period prior to the first taxable year in which we are treated as a PFIC, will be treated as ordinary income; and

• the amount allocated to each other taxable year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any deductions or losses, and gains realized on the sale of common shares cannot be treated as capital gains, even if you hold such common shares as capital assets; however, any losses realized on the sale of common shares can be treated as capital losses as discussed below under “ —Taxation of Disposition of Common Shares.”

If we are treated as a PFIC with respect to you for any taxable year, to the extent any of our subsidiaries are also PFICs, you may be deemed to own shares in any such lower-tier PFICs that are directly or indirectly owned by us in that proportion which the value of the common shares you own bears to the value of all of our shares, and you may be subject to the adverse tax consequences described above with respect to the shares of such lower-tier PFICs you would be deemed to own. As a result, you may incur liability for any excess distribution described above if we receive a distribution from such lower-tier PFICs or if any shares in such lower-tier PFICs are disposed of (or deemed disposed of). You should consult your tax advisor regarding the application of the PFIC rules to any of our subsidiaries.

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a valid mark-to-market election for the common shares you own, you will include in income for each year that we are treated as a PFIC with respect to you an amount equal to the excess, if any, of the fair market value of such common shares as of the close of your taxable year over your adjusted basis in such common shares. You will be allowed a deduction for the excess, if any, of the adjusted basis of such common shares over their fair market value as of the close of the taxable year. However, deductions will be allowable only to the extent of any net mark-to-market gains on such common shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of common shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on your common shares, as well as to any loss realized on the actual sale or disposition of such common shares, to the extent the amount of such loss does not exceed the net mark-to-market gains for such common shares previously included in income. Your basis in the common shares will be adjusted to reflect any such income or loss amounts. If you make a mark-to-market election, any distributions we make would generally be subject to the rules discussed below under “—Taxation of Dividends and Other Distributions on the Common Shares,” except the lower rates applicable to qualified dividend income would not apply.

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The mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. A “qualified exchange” includes the                 . For these purposes, our common shares will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. There can be no assurance that the trading in our common shares will be sufficiently regular to qualify them as marketable stock. In addition, because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs we own, you generally will continue to be subject to the PFIC rules with respect to your indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. You should consult your tax advisor as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.

Alternatively, if a non-U.S. entity treated as a corporation is a PFIC, a holder of shares in that entity may avoid taxation under the PFIC rules described above regarding excess distributions and recognized gains by making a qualified electing fund election to include in income its share of the entity’s income on a current basis. However, you may make a qualified electing fund election with respect to the common shares you hold only if we furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information.

A U.S. Holder of a PFIC may be required to file an IRS Form 8621. A U.S. Holder that does not file a required IRS Form 8621 may be subject to substantial penalties, and the statute of limitations on the assessment and collection of all U.S. federal income taxes of such U.S. Holder for the related tax year may not close before the date which is three years after the date on which such form is filed. If we are treated as a PFIC, you should consult your tax advisor regarding any reporting requirements that may apply to you. You are urged to consult your tax advisor regarding the application of the PFIC rules to the acquisition, ownership and disposition of our common shares.

PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE IMPACT ON AN INVESTMENT IN OUR COMMON SHARES OF THE COMPANY BEING TREATED AS A PFIC, AS WELL AS THE APPLICATION OF THE PFIC RULES AND THE POSSIBILITY OF MAKING A MARK-TO-MARKET ELECTION.

Taxation of Dividends and Other Distributions on the Common Shares

Subject to the PFIC rules discussed above, the gross amount of any distributions we make to you (including the amount of any tax withheld) with respect to our common shares generally will be includible in your gross income as dividend income on the date you receive such distribution, but only to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). The dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations. To the extent the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a tax-free return of your tax basis in your common shares, and then, to the extent such excess amount exceeds your tax basis in your common shares, as capital gain. We currently do not, and do not intend to, calculate our earnings and profits under U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be reported as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

With respect to certain non-corporate U.S. Holders, including individual U.S. Holders, dividends may be taxed at the lower capital gain rates applicable to qualified dividend income, provided (1)(a) we are eligible for the benefits of the Canada-U.S. income tax treaty, or the Treaty, or (b) the dividends are with respect to common shares that are readily tradable on an established securities market in the United States, (2) the Company is neither a PFIC nor treated as such with respect to you (as discussed above) for either the taxable year in which

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the dividend was paid or the preceding taxable year, and (3) certain other requirements (including holding period and at risk requirements) are met. We intend to apply to list our common shares on the NYSE, which for this purpose is an established securities market in the United States. The determination of whether a dividend qualifies for the preferential tax rates described above must be made at the time the dividend is paid. Although we do not believe we are or will be a PFIC for the current taxable year or future taxable years, whether we are treated as a PFIC for any taxable year will depend on factual circumstances during such year, and therefore there can be no assurance that we will not be a PFIC for the taxable year in which such dividend is paid.

The amount of any distribution paid in a currency other than U.S. dollars will be equal to the U.S. dollar value of such currency on the date such distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars at that time. If a distribution in a foreign currency is converted into U.S. dollars on the day it is received, the U.S. Holder will not be required to recognize foreign currency gain or loss with respect to such distribution. Any gain or loss on a conversion or other disposition of the foreign currency for a different U.S. dollar amount on a later date general will be U.S. source ordinary income or loss. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution.

Any dividends will constitute foreign-source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends paid by us with respect our common shares will generally constitute passive category income but could, in the case of certain U.S. Holders, constitute general category income.

If Canadian withholding taxes apply to any dividends paid to you with respect to the common shares, subject to certain conditions and limitations (including specific holding period and at risk rules), such withholding taxes may be treated as foreign taxes eligible for credit against your U.S. federal income tax liability. Instead of claiming a credit, you may elect to deduct such taxes in computing taxable income, subject to applicable limitations. If a refund of the tax withheld is available under the applicable laws of Canada or under the Treaty, the amount of tax withheld that is refundable will not be eligible for such credit against your U.S. federal income tax liability (and will not be eligible for the deduction against your U.S. federal taxable income). The rules relating to the determination of the foreign tax credit are complex, and you should consult your tax advisor regarding the availability of a foreign tax credit in your particular circumstances, including the effects of the Treaty.

Taxation of Disposition of Common Shares

Subject to the PFIC rules discussed above, upon a taxable sale or other taxable disposition of our common shares, you generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized (including the amount of any tax withheld) and your tax basis in such common shares. Your tax basis in your common shares generally will equal the cost of such common shares. Any gain or loss on the sale or other disposition of such common shares generally will be treated as U.S.-source income or loss, and treated as long-term capital gain or loss if your holding period in such common shares at the time of the disposition exceeds one year. Because capital gain on the sale or other disposition of our common shares generally will be treated as U.S.-source gain, in the event any Canadian tax (including withholding tax) is imposed upon such sale or other disposition, you may not be able to utilize foreign tax credits unless (1) the gain is resourced as foreign-source under the provisions of the Treaty and you elect to apply the Treaty or (2) you have foreign-source income or gain in the same category from other sources. Long-term capital gain of non-corporate U.S. Holders generally will be subject to U.S. federal income tax at reduced tax rates. The deductibility of capital losses is subject to significant limitations.

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Information Reporting and Backup Withholding

Payments of dividends with respect to our common shares and proceeds from the sale, exchange or redemption of our Common Shares that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder that furnishes a correct taxpayer identification number and makes any other required certification or that is otherwise exempt from backup withholding. U.S. Holders that are required to establish their exempt status generally must provide such certification on IRS Form W-9. You should consult your tax advisor regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information in a timely manner.

Information with respect to Foreign Financial Assets

Individuals and certain entities that have U.S. individual owners or beneficiaries may be required to report information on IRS Form 8938 relating to an interest in our common shares, subject to certain exceptions (including an exception for our common shares held in accounts maintained by certain financial institutions). Penalties can apply if a U.S. Holder fails to satisfy such reporting requirements, and the statute of limitations on the assessment and collection of all U.S. federal income taxes of such U.S. Holder for the related tax year may not close before the date which is three years after the date on which a required IRS Form 8938 is filed. You should consult your tax advisor regarding the effect, if any, of this requirement on your ownership and disposition of our common shares.

THE DISCUSSION OF MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS SET FORTH ABOVE IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO AN INVESTMENT IN OUR COMMON SHARES. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON SHARES.

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MATERIAL CANADIAN INCOME TAX CONSIDERATIONS FOR NON-CANADIAN HOLDERS

The following summary describes, as of the date hereof, certain Canadian federal income tax considerations under the Income Tax Act (Canada) and its regulations (collectively, the “Canadian Tax Act”) that generally apply to an investor who acquires, as a beneficial owner, our common shares pursuant to this offering and who, at all relevant times, for the purposes of the Canadian Tax Act:

(1) is not, and is not deemed to be, resident in Canada;

(2) deals at arm’s length with us and is not “affiliated” (as defined in the Canadian Tax Act) with us;

(3) holds our common shares as capital property;

(4) does not use or hold, and is not deemed to use or hold, our common shares in a business carried on in Canada;

(5) is not an “authorized foreign bank” (as defined in the Canadian Tax Act);

(6) is not a “foreign affiliate” (as defined in the Canadian Tax Act) of a person resident in Canada; and

(7) has not entered into, with respect to our common shares, a “derivative forward agreement” (as defined in the Canadian Tax Act) (such investor, a “Non-Canadian Holder”).

Special rules, which are not discussed in this summary, may apply to a Non-Canadian Holder that is an insurer carrying on an insurance business in Canada and elsewhere.

This summary is based on the provisions of the Canadian Tax Act in force on the date hereof, and an understanding of the current administrative policies of the Canada Revenue Agency (the “CRA”) published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Canadian Tax Act and the Canada-United States Tax Convention (1980), as amended (the “Canada-U.S. Tax Treaty”), publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”), and assumes that the Proposed Amendments will be enacted in their current form. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or assessing practice, whether by legislative, regulatory, administrative or judicial action, nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from those discussed herein.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular investor. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, you should consult your own tax advisor with respect to your particular circumstances.

Generally, for purposes of the Canadian Tax Act, all amounts relating to the acquisition, holding or disposition of our common shares must be converted into Canadian dollars based on the exchange rates as determined in accordance with the Canadian Tax Act. Accordingly, the amount of any dividends required to be included in the income of, and capital gains or capital losses realized by, a Non-Canadian Holder may be affected by fluctuations in the Canadian exchange rate.

Dividends

Dividends paid or credited on our common shares, or deemed to be paid or credited on our common shares, to a Non-Canadian Holder will be subject to Canadian withholding tax at the rate of 25%, subject to any reduction in the rate of withholding to which the Non-Canadian Holder is entitled under any applicable income tax convention between Canada and the country in which the Non-Canadian Holder is resident. For example, under the Canada-U.S. Tax Treaty, where dividends on our common shares are considered to be paid to or

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derived by a Non-Canadian Holder that is a beneficial owner of the dividends and is a U.S. resident for the purposes of, and is entitled to benefits of, the Canada-U.S. Tax Treaty, the applicable rate of Canadian withholding tax is generally reduced to 15%.

Dispositions

A Non-Canadian Holder will not be subject to tax under the Canadian Tax Act on any capital gain realized on a disposition or deemed disposition of our common shares unless, at the time of disposition, the shares are “taxable Canadian property” (as defined in the Canadian Tax Act) of the Non-Canadian Holder and the Non-Canadian Holder is not entitled to relief under an applicable income tax convention between Canada and the country in which the Non-Canadian Holder is resident.

Generally, our common shares will not constitute “taxable Canadian property” to a Non-Canadian Holder at a particular time provided that the common shares are listed at that time on a “designated stock exchange” (as defined in the Canadian Tax Act), which currently includes the NYSE, unless at any particular time during the 60-month period that ends at that time:

(i) one or any combination of (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder does not deal at arm’s length and (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships, has owned 25% or more of the issued shares of any class or series of our capital stock; and

(ii) more than 50% of the fair market value of our common shares was derived, directly or indirectly, from one or any combination of (a) real or immoveable property situated in Canada, (b) “Canadian resource properties” (as defined in the Canadian Tax Act), (c) “timber resource properties” (as defined in the Canadian Tax Act) and (d) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property exists.

Notwithstanding the foregoing, in certain circumstances set out in the Canadian Tax Act, our common shares could be deemed to be “taxable Canadian property.” Non-Canadian Holders whose common shares may constitute “taxable Canadian property” should consult their own tax advisors.

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UNDERWRITERS

Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom                is acting as representative, have severally agreed to purchase, and we and the selling stockholders have agreed to sell to them, severally, the number of shares indicated below:

Name	Number of Shares
Morgan Stanley & Co. LLC
Credit Suisse Securities (USA) LLC
Goldman Sachs & Co. LLC
CIBC World Markets Inc.(1)
Macquarie Capital (USA) Inc.
SunTrust Robinson Humphrey, Inc.
Total:

Notes:    (1) Any sales by CIBC World Markets Inc. of our common shares in the United States or to U.S. persons will be completed through CIBC World Markets Corp., its affiliate registered with the SEC as a broker-dealer.

The offering is being made concurrently in the United States and in each of the provinces and territories of Canada (other than the province of Quebec). Our common shares will be offered in the United States through those underwriters who are registered to offer the common shares for sale in the United States and such other registered dealers as may be designated by the underwriters. Our common shares will be offered in each of the provinces and territories of Canada (other than the province of Quebec) through Morgan Stanley Canada Limited, Credit Suisse Securities (Canada), Inc., Goldman Sachs Canada, Inc., CIBC World Markets Inc., Macquarie Capital Markets Canada Ltd. and such other Canadian registered dealers as may be designated by the underwriters. Subject to applicable law, the underwriters, or such other registered dealers or other entities outside the United States and Canada that are affiliates of the underwriters as may be designated by the underwriters, may offer the common shares outside of the United States and Canada.

The underwriters and the representative are collectively referred to as the “underwriters” and the “representative,” respectively. The underwriters are offering the common shares subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the common shares offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the common shares offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ option to purchase additional shares described below. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part. In Canada, the shares are to be taken up by the underwriters, if at all, on or before a date not later than 42 days after the date of this prospectus.

The underwriters initially propose to offer part of the common shares directly to the public at the offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $        per share under the public offering price. After the initial offering of the common shares, the offering price and other selling terms may from time to time be varied by the representative.

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to             additional common shares at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering the option to purchase additional shares, if any, made in connection with the offering of the common shares offered by this prospectus. To the extent the option is exercised, each underwriter will

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become obligated, subject to certain conditions, to purchase about the same percentage of the additional common shares as the number listed next to the underwriter’s name in the preceding table bears to the total number of common shares listed next to the names of all underwriters in the preceding table.

The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us and the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional                common shares.

		Total
	Per Share	No Exercise	Full Exercise
Public offering price
Underwriting discounts and commissions to be paid by:
Us
The selling stockholders
Proceeds, before expenses, to us
Proceeds, before expenses, to selling stockholders

The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately US$        . We have agreed to reimburse the underwriters for expense relating to clearance of this offering with the Financial Industry Regulatory Authority, or FINRA, up to US$        .

The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total number of common shares offered by them.

We intend to apply to have our common shares approved for quotation on the NYSE under the trading symbol “GTWY”.

We and all directors and officers and the holders of all of our outstanding stock and stock options have agreed that, without the prior written consent of                on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus (the “restricted period”):

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any common shares or any securities convertible into or exercisable or exchangeable for common shares;

• file any registration statement with the Securities and Exchange Commission relating to the offering of any common shares or any securities convertible into or exercisable or exchangeable for common shares; or

• enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common shares.

whether any such transaction described above is to be settled by delivery of common shares or such other securities, in cash or otherwise. In addition, we and each such person agrees that, without the prior written consent of                on behalf of the underwriters, we or such other person will not, during the restricted period, make any demand for, or exercise any right with respect to, the registration of any common shares or any security convertible into or exercisable or exchangeable for common shares.

The restrictions described in the immediately preceding paragraph to do not apply to:

• the sale of shares to the underwriters; or

• the issuance by the Company of common shares upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing;

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• transactions by any person other than us relating to common shares or other securities acquired in open market transactions after the completion of the offering of the shares; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is required or voluntarily made in connection with subsequent sales of the common shares or other securities acquired in such open market transactions; or

• the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of common shares, provided that (i) such plan does not provide for the transfer of common shares during the restricted period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of common shares may be made under such plan during the restricted period.

                    , in its sole discretion, may release the common shares and other securities subject to the lock-up agreements described above in whole or in part at any time.

In order to facilitate the offering of the common shares, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common shares. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the option to purchase additional shares. The underwriters can close out a covered short sale by exercising the option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the option to purchase additional shares. The underwriters may also sell shares in excess of the option to purchase additional shares, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common shares in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, common shares in the open market to stabilize the price of the common shares. These activities may raise or maintain the market price of the common stock above independent market levels or prevent or retard a decline in the market price of the common shares. The underwriters are not required to engage in these activities and may end any of these activities at any time.

We, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representative may agree to allocate a number of common shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters that may make Internet distributions on the same basis as other allocations.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses.

In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts

253

of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.

Pricing of the Offering

Prior to this offering, there has been no public market for our common shares. The initial public offering price was determined by negotiations between us and the representative. Among the factors considered in determining the initial public offering price were our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours.

Selling Restrictions

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any shares of our common shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any shares of our common shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of our common shares shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any shares of our common shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of our common shares to be offered so as to enable an investor to decide to purchase any shares of our common shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

United Kingdom

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of the shares of our common shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and

254

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of our common shares in, from or otherwise involving the United Kingdom.

Japan

No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) (the “FIEL”) has been made or will be made with respect to the solicitation of the application for the acquisition of the shares of common shares.

Accordingly, the shares of common shares have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of Japan.

Hong Kong

The common shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the common shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to the common shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the common shares may not be circulated or distributed, nor may the common shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the common shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired common shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

255

LEGAL MATTERS

The validity of our common shares and certain other matters of Canadian law will be passed upon for us by Bennett Jones LLP. Certain matters of U.S. federal law will be passed upon for us by Latham & Watkins LLP, Chicago, Illinois. Certain legal matters in connection with this offering will be passed upon for the underwriters by Weil, Gotshal & Manges LLP, New York, New York with respect to U.S. law. McCarthy Tétrault LLP is Canadian counsel for the underwriters in connection with this offering.

256

EXPERTS

The audited consolidated financial statements of Gateway Casinos & Entertainment Limited as of and for the year ended December 31, 2017 included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of the said firm as experts in accounting and auditing.

The audited statement of assets acquired and liabilities assumed of the Central Gaming Bundle as of July 18, 2018 included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent certified public accountants, upon the authority of the said firm as experts in accounting and auditing.

The consolidated financial statements of Gateway Casinos & Entertainment Limited for the years ended December 31, 2016 and 2015 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP is independent with respect to the company within the meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct.

The combined schedules of revenues and direct expenses of the Southwest and North gaming bundles of Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2017 and 2016 and related notes and the combined schedules of revenues and direct expenses of the Central gaming bundle of Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2018 and 2017 and related notes included in this prospectus have been so included in reliance on the reports of KPMG LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. KPMG LLP is independent with respect to the company within the meaning of the Chartered Professional Accountants of Ontario CPA Code of Professional Conduct and the American Institute of Certified Public Accountants Code of Professional Conduct.

CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT

On September 16, 2018, our board of directors approved the appointment of Grant Thornton LLP as the independent registered public accounting firm of Gateway Casinos & Entertainment Limited and its subsidiaries, effective September 16, 2018 for the year ended December 31, 2017. The change of the independent registered public accounting firm was due to the fact that PricewaterhouseCoopers LLP would not be considered independent pursuant to the meaning of the Securities Act and the applicable rules and regulations thereunder adopted by the SEC and the Public Company Accounting Oversight Board (United States). The decision was not made due to any disagreements with PricewaterhouseCoopers LLP.

PricewaterhouseCoopers LLP’s audit reports on our consolidated financial statements as of December 31, 2016 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the year ended December 31, 2016 and the subsequent period through September 16, 2018, there were (i) no “disagreements” (as such term is defined in Item 16F of Form 20-F) between PricewaterhouseCoopers LLP and us on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures, any of which, if not resolved to PricewaterhouseCoopers LLP’s satisfaction, would have caused PricewaterhouseCoopers LLP to make reference thereto in their reports and (ii) no “reportable events” (as such term is defined in Item 16F of Form 20-F).

We have provided a copy of the above statements to PricewaterhouseCoopers LLP and requested that it furnish us with a letter addressed to the SEC stating whether or not they agree with the above disclosure. A copy of that letter is filed as exhibit 16.1 to the registration statement of which this prospectus is a part.

257

During the year ended December 31, 2016 and the subsequent period through September 16, 2018, neither we nor anyone on our behalf has consulted with Grant Thornton LLP regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us or anyone on our behalf that Grant Thornton LLP concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issues or (ii) any matter that was the subject of a “disagreement” or a “reportable event” (as each of such terms is defined in Item 16F of Form 20-F).

258

ENFORCEMENT OF CIVIL LIABILITIES

We are incorporated under the federal laws of Canada. Some of our directors and officers, and some of the experts named in this prospectus, are residents of Canada or otherwise reside outside of the United States, and all or a substantial portion of their assets, and all or a substantial portion of our assets, are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers and experts under the United States federal securities laws. There can be no assurance that U.S. investors will be able to enforce against us, members of our board of directors, officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws.

259

EXPENSES OF THE OFFERING

The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of the common shares being registered. All amounts listed below are estimates except the SEC registration fee, FINRA filing fee and NYSE listing fee. We will pay all of the expenses of this offering.

Item	Amount
SEC registration fee	$	12,120
FINRA filing fee		12,500
listing fee		*
Printing expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer Agent fees and expenses		*
Miscellaneous fees		*
Total	$	24,620

* To be completed by amendment.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form F-1 under the Securities Act with respect to the common shares offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the common shares offered hereby, please refer to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits and schedules filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from such offices upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address is www.sec.gov.

Upon completion of this offering, we will be subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. Although we are not required to prepare and issue quarterly reports as a foreign private issuer, we currently intend to file quarterly reports on Form 6-K with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders and Section 16 short-swing profit reporting for our directors, officers and holders of more than 10% of our voting securities.

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INDEX TO FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Interim Financial Statements of Gateway Casinos & Entertainment Limited
Condensed Consolidated Interim Balance Sheets as at September 30, 2018 and 2017	F-4
Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2018 and 2017	F-5
Condensed Consolidated Interim Statements of Changes in Equity (Deficiency) for the nine months ended September 30, 2018 and 2017	F-6
Condensed Consolidated Interim Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	F-7
Notes to Condensed Consolidated Interim Financial Statements—September 30, 2018 and 2017	F-8
Consolidated Financial Statements of Gateway Casinos & Entertainment Limited
Reports of Independent Registered Public Accounting Firms	F-46
Consolidated Balance Sheets as at December 31, 2017 and 2016	F-48
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015	F-49
Consolidated Statements of Changes in (Deficiency) Equity for the years ended December 31, 2017, 2016 and 2015	F-50
Consolidated Statements of Cash Flows for the years ended December  31, 2017, 2016 and 2015	F-51
Notes to Consolidated Financial Statements—December 31, 2017, 2016 and 2015	F-52
Statement of Assets Acquired and Liabilities Assumed of the Central Gaming Bundle
Statement of Assets Acquired and Liabilities Assumed as at July 18, 2018	F-101
Notes to Statement of Assets Acquired and Liabilities Assumed as at July 18, 2018	F-102
Combined Schedules of Revenues and Direct Expenses of Ontario Lottery and Gaming Corporation
Report of Independent Registered Public Accounting Firm	F-106
Combined Schedules of Revenues and Direct Expenses for the North Gaming Bundle for the years ended March 31, 2017 and 2016	F-107
Notes to Combined Schedules of Revenues and Direct Expenses for the North Gaming Bundle for the years ended March 31, 2017 and 2016	F-108
Report of Independent Registered Public Accounting Firm	F-118
Combined Schedules of Revenues and Direct Expenses for the Southwest Gaming Bundle for the years ended March 31, 2017 and 2016	F-119
Notes to Combined Schedules of Revenues and Direct Expenses for the Southwest Gaming Bundle for the years ended March 31, 2017 and 2016	F-120
Report of Independent Registered Public Accounting Firm	F-130
Combined Schedules of Revenues and Direct Expenses for the Central Gaming Bundle for the years ended March 31, 2018 and 2017	F-131
Notes to Combined Schedules of Revenues and Direct Expenses for the Central Gaming Bundle for the years ended March 31, 2018 and 2017	F-132
Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income and Combined Schedules of Revenues and Direct Expenses of Gateway Casinos & Entertainment Limited
Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income for the nine months ended September 30, 2018	F-147
Notes to the Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income for the nine months ended September 30, 2018	F-148

F-1

Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income for the year ended December 31, 2017	F-155
Notes to the Unaudited Pro Forma Combined Statement of Operations and Comprehensive Income for the year ended December 31, 2017	F-157
Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2018 to July 17, 2018	F-163
Notes to the Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2018 to July 17, 2018	F-165
Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the year ended March 31, 2018	F-170
Notes to the Unaudited Central Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the year ended March 31, 2018	F-171
Unaudited North Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2017 to May 29, 2017	F-176
Notes to the Unaudited North Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2017 to May 29, 2017	F-177
Unaudited Southwest Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2017 to May 8, 2017	F-182
Notes to the Unaudited Southwest Ontario Gaming Bundle Pro Forma Combined Schedule of Revenues and Direct Expenses for the period from January 1, 2017 to May 8, 2017	F-183

F-2

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

For the three and nine-month periods ended September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

F-3

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

(Unaudited)

(expressed in thousands of Canadian dollars)

	September 30, 2018			December 31, 2017
	$			$
Assets
Current assets
Cash and cash equivalents		210,567			97,385
Amounts receivable		54,453			39,838
Contract assets		6,061			—
Inventory		5,371			3,300
Prepaid expenses and deposits		11,478			3,455
Assets held for sale (notes 6 and 20)		1,337			299,626
Other current assets (note 9)		2,697			—
		291,964			443,604
Non-current assets
Property and equipment (note 6)		444,467			334,038
Intangible assets (note 7)		241,146			236,226
Goodwill		8,505			8,505
Other assets (note 9)		16,774			12,839
Long-term deposits		2,687			1,158
		713,579			592,766
Total assets		1,005,543			1,036,370
Liabilities
Current liabilities
Gaming revenue payable to BCLC, AGLC and OLG		13,475			13,900
Accounts payable and accrued liabilities (note 8)		102,526			96,306
Current portion of long-term debt (note 9)		10,652			53,096
Current portion of deferred consideration payable		700			1,200
Deferred revenue		4,230			1,726
Other current liabilities (note 9)		379			72
		131,962			166,300
Non-current liabilities
Other liabilities (note 9)		10,714			28,443
Deferred consideration payable		—			400
Deferred rent		11,808			5,263
Long-term debt (note 9)		882,266			881,291
Deferred income taxes (note 11)		14,165			14,826
		918,953			930,223
Total liabilities		1,050,915			1,096,523
Equity (Deficiency)
Share capital (note 10)		26,940			155,585
Contributed surplus (note 10)		12,949			9,402
Deficit (note 18)		(87,314	)		(227,244	)
Total equity (deficiency) attributable to shareholders		(47,425	)		(62,257	)
Non-controlling interest		2,053			2,104
Total equity (deficiency)		(45,372	)		(60,153	)
Total liabilities and equity		1,005,543			1,036,370
Commitments and contingencies (note 16)
Subsequent events (notes 6 and 20)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F-4

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONDENSED CONSOLIDATED INTERIM STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(expressed in thousands of Canadian dollars, except for per share information)

	Three months ended September 30, 2018			Three months ended September 30, 2017			Nine months ended September 30, 2018			Nine months ended September 30, 2017
	$			$			$			$
Revenue
Gaming		168,048			119,476			399,620			270,571
Food and beverage		18,176			16,542			52,243			47,955
Hotel		6,060			4,441			12,203			10,648
Automated teller machines		4,985			1,331			13,099			6,518
Other		3,796			1,181			7,112			3,276
		201,065			142,971			484,277			338,968
Expenses
Human resources		79,933			59,081			200,443			142,459
Operating		21,365			11,723			50,332			27,085
Marketing and promotion		12,716			6,089			24,636			17,642
Occupancy		28,696			10,290			64,013			23,939
Cost of food and beverage service		11,703			8,716			28,604			22,736
Amortization of intangible assets		3,576			13,460			20,951			40,112
Depreciation of property and equipment		13,272			13,196			31,559			32,288
Writedown of non-financial assets		—			—			—			167
Other (note 12)		6,788			3,930			28,248			11,289
Share-based compensation (note 10)		223			3,613			8,441			17,741
		178,272			130,098			457,227			335,458
Income before other expenses (income) and income taxes		22,793			12,873			27,050			3,510
Other expenses (income)
Interest expense (note 13)		13,904			15,176			41,805			44,031
Interest income		(87	)		(14	)		(141	)		(663	)
Change in fair value of embedded derivatives (note 14)		(5,902	)		(1,177	)		(4,110	)		(3,759	)
Change in fair value of cross currency interest rate swaps (note 14)		11,147			21,431			(21,891	)		37,167
Loss on debt extinguishment (note 9)		—			—			15,124			16,135
Loss on debt modification (note 9)		6,264			—			6,264			—
Loss (Gain) on sale of property and equipment		26			(1	)		(192,373	)		(5	)
Foreign exchange loss (gain)		(15,082	)		(33,184	)		25,480			(53,066	)
		10,270			2,231			(129,842	)		39,840
Income (loss) before income taxes		12,523			10,642			156,892			(36,330	)
Income tax (expense) recovery
Current		(554	)		(489	)		(1,321	)		(686	)
Deferred		(87	)		(101	)		661			574
		(641	)		(590	)		(660	)		(112	)
Income (loss) and comprehensive income (loss) for the period		11,882			10,052			156,232			(36,442	)
Income (loss) and comprehensive income (loss) for the period attributable to
Shareholders of the Company		11,880			10,050			156,225			(36,449	)
Non-controlling interest		2			2			7			7
		11,882			10,052			156,232			(36,442	)
Income (loss) per share (expressed in $ per share)
Basic and diluted		0.30			0.26			3.97			(0.93	)
Weighted average number of shares		39,404,528			39,395,582			39,401,568			39,392,623
Deficit attributable to shareholders—Beginning of period		(82,899	)		(208,659	)		(227,244	)		(162,160	)
Deficit attributable to shareholders—End of period		(87,314	)		(198,609	)		(87,314	)		(198,609	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F-5

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (DEFICIENCY)

(Unaudited)

(expressed in thousands of Canadian dollars)

	Attributable to shareholders of the Company													Non- controlling interest			Total
	Share capital (note 10)					Contributed surplus		Deficit			Total
	Number(1)		Amount
			$			$		$			$			$			$
Balance—December 31, 2016		39,390		347,163			7,614		(162,160	)		192,617			2,171			194,788
Issuance of share capital		9		102			—		—			102			—			102
Loss and comprehensive loss for the nine months ended September 30, 2017		—		—			—		(36,449	)		(36,449	)		7			(36,442	)
Return of capital		—		(131,680	)		—		—			(131,680	)		—			(131,680	)
Settlement of share-based compensation		—		—			3,933		—			3,933			—			3,933
Distributions to non-controlling interest		—		—			—		—			—			(57	)		(57	)
Balance—September 30, 2017		39,399		215,585			11,547		(198,609	)		28,523			2,121			30,644
Balance—December 31, 2017		39,399		155,585			9,402		(227,244	)		(62,257	)		2,104			(60,153	)
Issuance or authorization of share capital		9		101			—		—			101			—			101
Income and comprehensive income for the nine months ended September 30, 2018		—		—			—		156,225			156,225			7			156,232
Return of capital (note 10)		—		(128,746	)		—		—			(128,746	)		—			(128,746	)
Settlement of share-based compensation (note 10)		—		—			3,547		—			3,547			—			3,547
Related party transaction (note 18)		—		—			—		(16,295	)		(16,295	)		—			(16,295	)
Distributions to non-controlling interest		—		—			—		—			—			(58	)		(58	)
Balance—September 30, 2018		39,408		26,940			12,949		(87,314	)		(47,425	)		2,053			(45,372	)

(1) presented in thousands of common shares

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F-6

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

(Unaudited)

(expressed in thousands of Canadian dollars)

	Nine months ended September 30, 2018			Nine months ended September 30, 2017
	$			$
Cash flows from operating activities
Income (loss) for the period		156,232			(36,442	)
Items not affecting cash
Depreciation of property and equipment		31,559			32,288
Amortization of intangible assets		20,951			40,112
Amortization of deferred transaction costs and premium on long-term debt		2,196			1,916
Change in fair value of embedded derivatives		(4,110	)		(3,759	)
Change in fair value of cross currency interest rate swaps		(20,692	)		33,481
Net interest expense		39,468			41,453
Loss on debt extinguishment		15,124			16,135
Loss on debt modification		6,264			—
Writedown of non-financial assets		—			167
Share-based compensation		8,441			17,741
Gain on sale of property and equipment		(192,373	)		(5	)
Income tax expense		660			112
Foreign exchange loss (gain)		11,600			(45,363	)
Non-cash deferred rent		6,402			1,188
		81,722			99,024
Changes in non-cash working capital items (note 16)		(5,382	)		(8,817	)
Cash settlement of share-based compensation		(10,207	)		(8,167	)
Income tax paid		(3,250	)		—
Bond consent fee and costs paid on return of capital to shareholders		7,592			—
Net cash generated from operating activities		70,475			82,040
Cash flows from investing activities
Gaming development costs and purchase of property and equipment		(99,426	)		(50,873	)
Proceeds from sale of property and equipment		494,294			22
Purchase of intangible assets		(5,984	)		(211	)
Acquisition of Ontario Central, North and Southwest Gaming Bundles—net of cash acquired		(59,030	)		(144,703	)
HST receivable related to acquisition of Ontario Central, North and Southwest Gaming Bundles		(7,658	)		(4,596	)
Interest received		141			663
Amounts deposited with Canada Revenue Agency		(696	)		—
Deposit for related party transactions (note 18)		(14,711	)		—
Net cash generated from (used for) investing activities		306,930			(199,698	)
Cash flows from financing activities
Transaction costs		(10,645	)		(27,768	)
Premium on redemption of 8.50% Notes		—			(8,500	)
Proceeds from long-term debt		569,301			949,088
Interest paid		(51,725	)		(42,254	)
Repayment of long-term debt		(588,858	)		(510,368	)
Net repayment of Revolving Credit Facility and Swingline Facility		(45,000	)		(25,590	)
Payment of deferred consideration		(900	)		(131,680	)
Distributions to non-controlling interest		(58	)		(57	)
Return of capital to shareholders		(128,746	)		(900	)
Bond consent fee and costs paid on return of capital to shareholders		(7,592	)		—
Net cash (used for) generated from financing activities		(264,223	)		201,971
Increase in cash and cash equivalents		113,182			84,313
Cash and cash equivalents—Beginning of period		97,385			37,453
Cash and cash equivalents—End of period		210,567			121,766

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F-7

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

1    Formation and nature of operations

Gateway Casinos & Entertainment Limited (the “Company”) was incorporated on May 18, 2010 under the Canada Business Corporations Act (“CBCA”) and was inactive prior to September 16, 2010. On September 16, 2010, the Company acquired certain casino operations through participating in the restructuring (the “Restructuring”) of New World Gaming Partners Holdings British Columbia Ltd. (“New World”) pursuant to a Plan of Arrangement under the provision of the CBCA. The Company’s executive office is located at 4331 Dominion Street, Burnaby, British Columbia.

The Company operates gaming, entertainment, and hospitality facilities in British Columbia, Alberta and Ontario. As at September 30, 2018, the Company’s 26 gaming properties consisted of the following:

Casinos in Greater Vancouver, British Columbia

• Grand Villa Casino Burnaby, Hotel and Convention Centre (“Grand Villa Burnaby”)

• Starlight Casino New Westminster (“Starlight New Westminster”)

• Cascades Casino Langley, Hotel and Convention Centre (“Cascades Langley”)

Casinos in the Thompson-Okanagan region of British Columbia

• Cascades Casino Kamloops (“Cascades Kamloops”)

• Playtime Casino Kelowna (“Playtime Kelowna”)

• Cascades Casino Penticton (“Cascades Penticton”)

• Lake City Casino Vernon (“Lake City Vernon”)

Casinos in Edmonton, Alberta

• Grand Villa Casino Edmonton (“Grand Villa Edmonton”)

• Starlight Casino Edmonton (“Starlight Edmonton”)

Community Gaming Centres (including bingo halls) in British Columbia

• Chances Mission (“Mission”)

• Chances Playtime Abbotsford (“Abbotsford”)

• Chances Playtime Campbell River (“Campbell River”)

• Chances Playtime Courtenay (“Courtenay”)

• Chances Squamish (“Squamish”)

• Playtime Gaming Victoria (“Victoria”) (bingo hall)

Casinos in Ontario

• Western Fair District (“London”)

• Point Edward (“Point Edward”)

F-8

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

• Woodstock (“Woodstock”)

• Dresden (“Dresden”)

• Clinton (“Clinton”)

• Hanover (“Hanover”)

• Thunder Bay (“Thunder Bay”)

• Sault Ste. Marie (“Sault Ste. Marie”)

• Sudbury (“Sudbury”)

• Gateway Casinos Innisfil (“Innisfil”)

• Casino Rama Resort (“Rama”)

The Company’s revenue is primarily earned from gaming revenues for providing operational services after deducting for the portion of gaming revenues payable to the British Columbia Lottery Corporation (“BCLC”), the Alberta Gaming and Liquor Commission (“AGLC”) and the Ontario Lottery Gaming Corporation (the “OLG”), with additional revenue generated from non-gaming revenues which include revenue from associated hotels and convention centres, restaurants, bars and live entertainment venues. The BCLC, British Columbia Gaming Policy and Enforcement Branch (“GPEB”), AGLC, OLG and Alcohol and Gaming Commission of Ontario (“AGCO”) are responsible for managing and conducting or regulating gaming activities in the regions in which the Company operates. The operating agreements related to the Company’s casinos and community gaming centres provide that the applicable governing body may suspend or terminate the rights of the Company to provide services under the agreements for certain specified reasons. The future operations of the casinos and community gaming centres depend upon the continued compliance with the operating agreements.

2    Basis of preparation

The Company prepares its condensed consolidated interim financial statements in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2017, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

3    Acquisitions

The Company accounted for the acquisitions below using the acquisition method in accordance with IFRS 3, Business Combinations, and the assets and liabilities acquired have been consolidated into these condensed consolidated interim financial statements.

a) Ontario Central Gaming Bundle

On March 15, 2018, the Company announced that it was selected as the successful proponent by the OLG to operate gaming facilities in the OLG’s Gaming Bundle 7 (Central) (the “Central Gaming Bundle”). The Company signed a transition and asset purchase agreement (“TAPA”) with the OLG on March 14, 2018 and, subject to closing conditions, was committed to signing a 23-year casino operating and service agreement (“COSA”) when the acquisition closed (the “Central Acquisition”), which occurred on July 18, 2018.

F-9

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

On July 18, 2018, the Company signed the 23-year COSA with the OLG. Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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 Casinos Innisfil), and have the opportunity to develop a casino in either Wasaga Beach or Collingwood. The total purchase price for such assets was $89,332 of cash consideration, including net non-cash working capital of ($3,570) comprised of amounts receivable, prepaids, inventory and accrued liabilities. The Company also incurred transaction costs of $2,244, of which $1,629 was incurred in 2018, $226 was incurred in 2017, $166 was incurred in 2016, and the remainder was incurred in previous years. In addition to the consideration paid, $7,657 was paid and was refunded to the Company through an input tax credit on October 5, 2018.

The revenue and net income before tax of the Central Gaming Bundle from the acquisition date, July 18, 2018, to September 30, 2018 were $60,267 and $10,537, respectively.

Consolidating the Central Gaming Bundle’s statement of operations and comprehensive income from January 1, 2018 would have resulted in incremental revenue of approximately $145,229 and incremental net income before tax of $20,327.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on July 18, 2018:

	$
Cash and cash equivalents		30,302
Non-cash working capital		(3,570	)
Property and equipment		48,566
Intangible assets		14,034
		89,332

b) Ontario Southwest Gaming Bundle

On May 9, 2017, the Company signed a 20-year COSA with the OLG. Under the Gaming Bundle 4 (Southwest) (the “Southwest Gaming Bundle”) TAPA, the Company 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 non-cash working capital of $775 comprised of prepaids, inventory and accrued liabilities. The Company also incurred transaction costs of $3,185, of which $2,219 was incurred in 2017, $600 was incurred in 2016, $193 was incurred in 2015 and the remainder was incurred in previous years. In addition to the consideration paid, $2,882 was paid and was refunded to the Company through an input tax credit on July 11, 2018.

F-10

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on May 9, 2017:

	$
Cash and cash equivalents		19,382
Non-cash working capital		775
Property and equipment		61,879
Intangible assets		13,388
		95,424

The fair value of the consideration is equal to $95,424.

The revenue and net income before tax of the Southwest Gaming Bundle from the acquisition date, May 9, 2017, to December 31, 2017 were $86,138 and $26,495, respectively.

Consolidating the Southwest Gaming Bundle’s statement of operations and comprehensive income from January 1, 2017 would have resulted in incremental revenue of approximately $45,736 and incremental net income before tax of $12,816.

c) Ontario North Gaming Bundle

On May 30, 2017, the Company signed a 20-year COSA with the OLG. Under the Gaming Bundle 3 (North) (the “North Gaming Bundle”) TAPA, the Company 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 non-cash working capital of $(424) comprised of prepaids, inventory and accrued liabilities. The Company also incurred transaction costs of $3,475, of which $2,553 was incurred in 2017, $521 was incurred in 2016, $183 was incurred in 2015 and the remainder was incurred in previous years. In addition to the consideration paid, $1,714 was paid and was refunded to the Company through an input tax credit on July 11, 2018.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on May 30, 2017:

	$
Cash and cash equivalents		10,688
Non-cash working capital		(424	)
Property and equipment		55,076
Intangible assets		14,009
		79,349

The fair value of the consideration is equal to $79,349.

The revenue and net income before tax of the North Gaming Bundle from the acquisition date, May 30, 2017, to December 31, 2017 were $46,584 and $8,347, respectively.

F-11

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Consolidating the North Gaming Bundle’s statement of operations and comprehensive income from January 1, 2017 would have resulted in incremental revenue of approximately $31,532 and incremental net income before tax of $3,924.

4    Significant accounting policies

The significant accounting policies used in the preparation of these condensed consolidated interim financial statements are the same as those applied in the Company’s consolidated financial statements for the year ended December 31, 2017 except for the following:

Seasonality

The Company is subject to seasonality primarily at its operations in the Thompson-Okanagan region in British Columbia and in Ontario. The operations experience lower visitation during the first and fourth quarters of the year due to the relatively harsher winter conditions in these regions compared to the rest of the regions. The Thompson-Okanagan is also a high tourism region in the summer months, and the Company’s operations benefit from the uplift of tourists.

New accounting standards applied in the period

The Company adopted the following new accounting standards effective January 1, 2018 on a retrospective basis:

(a) IFRS 9—Financial Instruments

(i) IFRS 9—Financial Instruments—Impact of adoption

IFRS 9, Financial Instruments, addressed revised guidance on the classification and measurement of financial instruments and replaced guidance in IAS 39, Financial Instruments: Recognition and Measurement. The Company adopted IFRS 9 on a retrospective basis without restatement of comparative periods. Upon adoption, the Company reclassified its financial instruments as summarized below. The new standard also includes a new expected credit loss model for calculating impairment on financial statements. Due to the nature of the Company’s business, this change did not have a material impact on the condensed consolidated interim financial statements.

The following table summarizes the classification impacts upon adoption of IFRS 9. The adoption of the new classification requirements under IFRS 9 did not result in a material change in measurement or the carrying amount of financial assets and liabilities.

	Classification
Financial instruments	IAS 39		IFRS 9
Cash and cash equivalents		Loans and receivables		Amortized cost
Amounts receivable		Loans and receivables		Amortized cost
Derivative financial instruments (other assets)		FVTPL		FVTPL
Derivative financial instruments (other liabilities)		FVTPL		FVTPL
Gaming revenue payable to BCLC, AGLC and OLG		Amortized cost		Amortized cost
Accounts payable and accrued liabilities		Amortized cost		Amortized cost
Deferred consideration payable		Amortized cost		Amortized cost
Long-term debt		Amortized cost		Amortized cost

F-12

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

(ii) IFRS 9—Financial Instruments—Accounting policies applied from January 1, 2018

The classification and related measurement of the Company’s significant financial instruments are as follows:

Amortized cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from those financial assets is included in interest income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented as a separate line item, together with foreign exchange gains and losses. Impairment losses, if material, are presented as a separate line item in the condensed consolidated interim statement of operations and comprehensive income (loss).

Fair value through profit or loss

Financial instruments are classified as fair value through profit or loss (“FVTPL”) if they are acquired principally for sale or repurchase in the near term or if they fail the solely payments of principal and interest (“SPPI”) test in accordance with IFRS 9. Derivatives are required to be included in this category unless they are designated as hedges. Embedded derivatives that are not closely related to the host instrument are also classified as FVTPL.

Financial instruments in this category are measured at fair value with the changes in fair value recognized immediately in the condensed consolidated interim statement of operations and comprehensive income (loss).

Recognition and presentation

Financial instruments are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all of the risks and rewards of ownership.

Financial assets and liabilities are offset and the net amount reported in the condensed consolidated interim balance sheet when there is a legally enforceable right to offset amounts and the intention is to settle on a net basis, or realize the asset and settle the liability simultaneously.

Financial instruments are initially recognized in the condensed consolidated interim balance sheet at fair value. Subsequent measurement depends on management’s classification of the financial instrument. The classification of financial instruments depends on the nature and purpose of the financial instruments, management’s choice and, in some circumstances, management’s intentions.

Swaps, forward contracts and embedded derivatives

The Company uses derivative financial instruments to manage foreign currency and interest rate exposures. These financial instruments are entered into solely for hedging purposes and are not used for speculative purposes. The Company does not apply hedge accounting. All derivative financial instruments are recognized in the condensed consolidated interim balance sheet at their estimated fair value.

F-13

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Cross currency interest rate swap (“CCIRS”) contracts are periodically used to manage currency and interest rate exposure on US dollar denominated long-term debt. The CCIRS contracts require the periodic exchange of payments with the exchange at maturity of notional principal amounts on which the payments are based. Changes in the fair value of the CCIRS contracts are recognized in change in fair value of cross currency interest rate swaps in the condensed consolidated interim statement of operations and comprehensive income (loss).

Foreign currency forward contracts are periodically used to manage foreign currency cash requirements. The foreign currency forward contracts involve the purchase or sale of an agreed upon amount of US dollars at a specified future date at forward exchange rates. Changes in the fair value of foreign currency forward contracts are recognized in change in fair value of derivative financial instruments in the condensed consolidated interim statement of operations and comprehensive income (loss).

Derivatives embedded in other financial instruments, such as a prepayment option on long-term debt, or other executory contracts are accounted for as separate derivatives when their risks and characteristics are not closely related to their host financial instrument or contract. Changes in the fair value of embedded derivatives are recognized within change in fair value of embedded derivatives in the condensed consolidated interim statement of operations and comprehensive income (loss).

(iii) IFRS 9—Financial Instruments—Impairment of financial assets

IFRS 9’s new impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit loss’ (ECL) model. This replaces IAS 39’s ‘incurred loss model’. Instruments within the scope of the new requirements included amounts receivable and contract assets recognized and measured under IFRS 15.

Amounts receivable and contract assets

The Company makes use of a simplified approach in accounting for amounts receivable as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses.

(b) IFRS 15—Revenue from Contracts with Customers

(i) IFRS 15—Revenue from Contracts with Customers—Impact of adoption

IFRS 15, Revenue from Contracts with Customers, deals with revenue recognition and establishes principles for reporting useful information to users of the financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard introduces a single, principles-based, five-step model to be applied to all contracts with customers. The standard provides guidance on timing of revenue recognition, including accounting for variable consideration, costs of fulfilling and obtaining a contract and various other matters. New disclosures in respect of revenue are also introduced. The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.

The Company adopted IFRS 15 using the full retrospective method on January 1, 2018, which resulted in changes in accounting policies and adjustments to the amounts recognized in the condensed consolidated interim financial statements and previous periods.

F-14

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Adoption of IFRS 15 using the full retrospective method resulted in the following adjustment:

	December 31, 2017		Adjustment		IFRS 15 carrying amount January 1, 2018
	$		$		$
Deferred revenue		—		1,726		1,726

The impact on the Company’s deficit as at January 1, 2018 is as follows:

	$
Deficit		(225,518	)
Adjustment to gaming revenue		(1,726	)
Deficit—December 31, 2017—IFRS 15		(227,244	)

The above impact relates to a change in timing of revenue recognition for permitted capital expenditure which the Company is entitled to under the COSAs with the OLG entered into in May 2017.

To better compare reported revenue between periods, the Company applied the full retrospective method when adopting the standard. Facility development commissions (“FDC”) and Permitted Capital Expenditures (“PCE”) of $28,362 for the nine months ended September 30, 2017, previously presented separately, have been included in gaming revenue. Customer loyalty points and free play promotional allowance of $4,575 for the nine months ended September 30, 2017, previously presented as part of marketing and promotion expenses and operating expenses, have been netted against gaming revenue. Table gaming supply charge of $1,121 for the nine months ended September 30, 2017, previously presented as part of operating expenses, has been netted against gaming revenue.

(ii) Revenue recognition

Gaming revenues consist of the Company’s share of the gaming win from table games, slot machines, bingo and other electronic games pursuant to its operating agreements with the BCLC, OLG and the AGLC and are recognized daily based on the gaming win at each of the Company’s casinos and community gaming centres. Revenues from automated teller machines (“ATMs”), food and beverage and hotel operations, and other revenue sources are recognized as the related goods and services are provided or sold.

The Company satisfies its performance obligations under its contracts as services are rendered under the term of the contracts with provincial gaming corporations. Revenues, net of amounts paid to the BC and Alberta provincial gaming corporation for free play and customer loyalty programs and table gaming supply charge payments, are recognized on a daily basis and amounts owing from the BCLC and/or AGLC are considered amounts receivable. Revenues, net of amounts paid to the OLG for free play and customer loyalty programs, are separated into fixed and variable consideration. The fixed consideration is recognized as services are rendered under the term of the contract and amounts owing from the OLG are considered amounts receivable. The variable consideration is recognized as services are rendered under the term of the contract based on the most likely amount; however, amounts owing from the OLG are considered contractual assets until the predefined annual minimum guarantee threshold is exceeded. PCE remuneration is earned when the Company incurs eligible costs up to the maximum annual threshold and recognized over time on a straight-line basis as the performance obligation is satisfied.

F-15

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Amounts received from the OLG in excess of the revenue to be recognized on a straight-line basis are presented as deferred revenue and netted against any contractual assets with the OLG.

Accounting requirement issued but not yet applied

IFRS 16, Leases, specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. IFRS 16 will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted.

The Company has started the assessment of the impact of adoption of the new standard on the consolidated financial statements. 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 currently treated as operating leases by the Company. The Company does not intend to adopt the new standard prior to the mandatory effective date.

IFRIC 23, Uncertainty Over Income Tax Treatments, includes requirements that add to the requirements in IAS 12, Income Taxes by specifying how to reflect the effects of uncertainty in accounting for income taxes. IFRIC 23 will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted.

The Company is currently assessing the impact of the interpretation and does not intend to adopt the new standard prior to the mandatory effective date.

5     Critical accounting estimates, assumptions and judgments

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management’s estimates, assumptions and judgments are based on historical experience and other factors considered to be reasonable, including expectations of future events.

Estimates and assumptions that could result in a material effect in the next financial period on carrying amounts of assets and liabilities are outlined below:

a) Impairment of non-financial assets

The determination of a long-lived asset impairment requires significant estimates and assumptions to determine the recoverable amount of a cash-generating unit (“CGU”), the recoverable amount used by the Company being the higher of fair value less costs of disposal (“FVLCOD”) and value in use (“VIU”). The FVLCOD and VIU methods involve estimating the net present value of future cash flows derived from the use of the CGU, discounted at an appropriate rate.

In the event an impairment analysis is required, the key assumptions that would be utilized in the determination of future cash flows would represent management’s best estimate of the range of economic conditions relating to the CGU, and would be based on historical experience, economic trends, and communication with other key stakeholders of the Company. These key assumptions would include the revenue growth rate, margin as a percentage of revenues, capital expenditures, the inflation growth rate and the discount rate. Significant changes in the key assumptions that would be utilized in the determination of future cash flows could result in an impairment loss or reversal of a previously recognized impairment loss.

F-16

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

b) Estimated useful lives of non-financial assets

Judgment is used to estimate each component of a tangible and intangible asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and, in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives change, this could result in an increase or decrease in the annual amortization and depreciation expense, and future impairment charges.

c) Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the condensed consolidated interim financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Company’s future financial results.

Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Company’s interpretations of income tax legislation, will result in adjustments to the expectations of future timing difference reversals and may require material deferred tax adjustments.

The Company’s operations are conducted in jurisdictions with complex tax laws and regulations that can require significant interpretation. As such, the Company and the tax authorities could disagree on tax filing positions and any reassessment of the Company’s filings could result in material adjustments to tax expense, taxes payable and deferred income taxes.

d) Fair value of long-term debt

The Company makes estimates and assumptions relating to fair value disclosure of the long-term debt. The critical assumptions underlying the fair value disclosure include the credit spread. The Company reviews various comparable debt securities and determines a reasonable credit spread applicable to the debt securities. See note 14.

e) Fair value of embedded derivatives

The Company is required to determine the fair value of embedded derivatives, such as prepayment options, separate from its long-term debt. Fair values for embedded derivatives are determined using valuation techniques and require estimates of redemption dates and forward interest rates existing at the balance sheet date as the financial instruments are not traded in an active market.

f) Fair value of derivative financial instruments

The estimated fair value of derivative financial instruments has been determined based on appropriate valuation methodologies and/or third party indications. Fair values determined using valuation models require the

F-17

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

use of assumptions concerning the amount and timing of future cash flows, discount rates, credit risk and probability of future events that are beyond management’s control. In determining these assumptions, the Company relied on external, readily observable quoted market inputs, where available, including Canadian and United States forward interest rate yield curves, and Canadian and United States foreign exchange rates, discounted to present value as appropriate. See note 14.

g) Share-based compensation

Share-based compensation provided to executives takes into account the number of shares expected to vest based on an estimate of the most likely possible outcome of a sale of some or all common shares by the existing shareholders and the possible service periods of the officers. The calculation also incorporates a per share fair value, based on the most recent share issuance.

It is reasonably possible that future estimates or the actual outcomes and timing of a liquidity event may be different from the assumptions used in the preparation of these condensed consolidated interim financial statements and a material change in the share-based compensation reflected in the condensed consolidated interim statement of operations and comprehensive income (loss) may occur. The range of possible outcomes is dependent on the interaction of multiple factors.

Judgments that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements are outlined below:

a) Segment reporting

The Company has aggregated its operating segments into reportable segments based on an assessment that each operating segment has similar economic characteristics, types of customers, types of services and products provided, regulatory environments, and management and reporting structures.

b) Leases

The Company has classified its leases as finance or operating based on assessments that the definition of a lease arrangement was met, the lease terms could be estimated with certainty and the discount rate used was reasonable.

c) Revenue recognition

The application of IFRS 15 requires the Company to make a number of judgments, including the determination of the nature of its performance obligations under its contracts, the assessment of the amount it expects to be entitled for, the timing of recognition and the allocation of the transaction price to loyalty programs. The Company concluded that its services are as an operator since the signed and executed contracts are between the Company and the provincial corporations in performing obligations over the term of the contracts. Consequently, revenue is recognized net of amounts paid to the provincial corporations for free play and customer loyalty programs and table gaming supply charge payments.

F-18

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

With the expectation the Company will incur eligible costs that can be claimed under PCE up to the maximum annual threshold, the Company has taken the approach of recognizing PCE remuneration on a straight-line basis over the course of its fiscal year.

6     Property and equipment

	Land			Buildings			Furniture and fixtures			Computer hardware			Equipment			Leasehold improvements			Gaming development costs			Total
	$			$			$			$			$			$			$			$
Year ended December 31, 2017
Net book value—December 31, 2016		80,682			309,357			8,918			1,468			18,823			34,029			33,413			486,690
Acquisition of Ontario North and Southwest Gaming Bundles		10,232			67,301			1,939			661			24,912			11,910			—			116,955
Gaming development costs and purchase of property and equipment(a)		5			4,709			1,641			1,595			24,161			18,257			49,416			99,784
Disposals(d)		(3,521	)		(3,909	)		(17	)		—			—			—			—			(7,447	)
Transfers		—			1,029			256			—			378			8,182			(9,845	)		—
Transfer to assets held for sale(f)		(56,994	)		(238,452	)		—			—			—			—			(4,180	)		(299,626	)
Depreciation		—			(20,217	)		(4,076	)		(1,289	)		(13,008	)		(6,203	)		—			(44,793	)
Writedown(c) and(e)		—			—			(22	)		—			(141	)		(17,362	)		—			(17,525	)
Net book value—December 31, 2017		30,404			119,818			8,639			2,435			55,125			48,813			68,804			334,038
At December 31, 2017
Cost		30,404			135,140			25,319			6,857			87,969			70,473			68,804			424,966
Accumulated depreciation		—			15,322			16,680			4,422			32,844			21,660			—			90,928
Net book value		30,404			119,818			8,639			2,435			55,125			48,813			68,804			334,038
Nine months ended September 30, 2018
Net book value—December 31, 2017		30,404			119,818			8,639			2,435			55,125			48,813			68,804			334,038
Acquisition of Central Ontario Gaming Bundle		—			—			—			—			45,306			3,260			—			48,566
Gaming development costs and purchase of property and equipment(a)		—			4,505			2,721			7,213			17,164			31,651			33,799			97,053
Disposals(f)		—			(54	)		—			—			—			(121	)		(2,119	)		(2,294	)
Transfers		—			1,504			1,849			485			3,290			38,452			(45,580	)		—
Transfer to assets held for sale (note 20)		(1,337	)		—			—			—			—			—			—			(1,337	)
Depreciation		—			(7,869	)		(3,251	)		(1,879	)		(13,323	)		(5,237	)		—			(31,559	)
Net book value—September 30, 2018		29,067			117,904			9,958			8,254			107,562			116,818			54,904			444,467
At September 30, 2018
Cost		29,067			141,095			29,889			14,555			153,729			143,715			54,904			566,954
Accumulated depreciation		—			(23,191	)		(19,931	)		(6,301	)		(46,167	)		(26,897	)		—			(122,487	)
Net book value		29,067			117,904			9,958			8,254			107,562			116,818			54,904			444,467

(a) During the nine months ended September 30, 2018, the Company capitalized $5,109 (December 31, 2017—$2,377) of interest costs related to gaming development based on a borrowing rate of 6.79% (December 31, 2017—6.81%).

(b) On March 4, 2017, the Company closed the operations of Penticton Bingo Palace.

(c) On April 1, 2017, the Lake City Penticton facility was shut down and, on April 5, 2017, was replaced with the new Cascades Penticton Casino. A writedown of property and equipment costs of $167 was recorded.

(d) On December 21, 2017, the Company completed the disposition of property located in Langley, British Columbia for aggregate proceeds (net of transaction costs) of $7,461. The net book value of the disposed assets was $7,430. This resulted in a gain on sale of property and facility of $31.

F-19

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

(e) The Grand Villa Edmonton has not performed as well as projected. As a result, an impairment assessment was performed as at December 31, 2017. The recoverable amount for the CGU was based on the FVLCOD, which estimates the net present value of the future cash flows expected to be generated by the CGU, discounted using an after-tax discount rate based on the Company’s weighted average cost of capital calculated to be within a range of 9.0% to 10.0% using the capital asset pricing model. These expected future cash flows require a number of assumptions about future business performance. As a result, an impairment of $22,600 was identified, and property and equipment have been written down by $17,358 and intangible assets have been written down by $5,242.

(f) On March 12, 2018, the Company completed a sale and leaseback of certain real estate properties including the Grand Villa Burnaby, Starlight New Westminster and Cascades Langley (collectively, the “Sale and Leaseback Transactions”) for gross proceeds of $503,595, resulting in a gain on sale of $192,399. The associated carrying value of $301,799 was classified as assets held for sale. Certain of the Company’s wholly owned subsidiaries entered into long-term leases for each of the properties and will continue to operate the casinos under the leases. As part of the sale and leaseback, 1144801 B.C. Ltd. which holds title to the leasehold interest as nominee and bare trustee of the Fraser Highway property in Langley was sold. Proceeds from the sale-leaseback were used to repay the Langley mortgage in full and the 2017 Senior Secured Credit Facility (note 9).

(g) On April 21, 2018, the Company closed the operations of Newton Bingo Country.

The Amended and Restated Multiple Casino Operational Services Agreement (“MCOSA”), Operational Service Agreements (“OSAs”) and Bingo Operational Service Agreements (“BOSAs”) for the British Columbia based casinos and community gaming centres provide that certain gaming equipment is the property of the BCLC. The Casino Facility Licenses for the Edmonton casinos provide that certain gaming equipment is the property of the AGLC. Accordingly, any costs related to gaming equipment provided by and owned by the BCLC and AGLC have not been recognized in these condensed consolidated interim financial statements.

F-20

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

7     Intangible assets

	Gaming operating agreements			Above/below market lease agreements			Software			Racebook license			Total
	$			$			$			$			$
Year ended December 31, 2017
Net book value—December 31, 2016		269,604			(2,228	)		511			105			267,992
Acquisition of Ontario North and Southwest Gaming Bundles		25,047			2,350			—			—			27,397
Additions		—			—			406			—			406
Amortization		(52,463	)		(588	)		(352	)		(103	)		(53,506	)
Writedown(a) and note 6(e)		(6,063	)		—			—			—			(6,063	)
Net book value—December 31, 2017		236,125			(466	)		565			2			236,226
At December 31, 2017
Cost		575,885			3,414			3,005			500			582,804
Accumulated amortization		339,760			3,880			2,440			498			346,578
Net book value		236,125			(466	)		565			2			236,226
Nine months ended September 30, 2018
Net book value—December 31, 2017		236,125			(466	)		565			2			236,226
Acquisition of Ontario Central Gaming Bundle		12,280			200			1,554			—			14,034
Additions		—			—			11,837			—			11,837
Amortization(b)		(20,285	)		(258	)		(406	)		(2	)		(20,951	)
Net book value—September 30, 2018		228,120			(524	)		13,550			—			241,146
At September 30, 2018
Cost		588,165			3,614			16,396			500			608,675
Accumulated amortization		360,045			4,138			2,846			500			367,529
Net book value		228,120			(524	)		13,550			—			241,146

(a) As at December 31, 2017, the Company wrote off a suspended OSA for a community gaming centre for $821.

(b) On February 14, 2018, the Company signed the OSAs with the BCLC in relation to all its British Columbia casino and community gaming centre operations, effective April 1, 2018. The OSAs have a 20-year term with an option to extend for an additional five years. The net book value of the OSAs as at April 1, 2018 was amortized over a remaining useful life of 20 years.

The remaining useful lives for the intangible assets are between 1 and 23 years.

F-21

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

8    Accounts payable and accrued liabilities

	September 30, 2018		December 31, 2017
	$		$
Trade accounts payable and accruals		28,511		22,599
Construction payable and accruals		34,673		37,305
Salaries, wages and benefits		28,046		16,658
Interest on long-term debt		3,180		9,821
Share-based compensation accrual		272		5,686
Income tax payable		—		1,780
Related party transaction payable		1,584		—
Other		6,260		2,457
		102,526		96,306

9    Long-term debt

	September 30, 2018			December 31, 2017
	$			$
Term Loans
Term Loan B (US$438,900)(a)		574,127			—
Term Loan B-1 (US$402,975)(b)		—			505,532
Term Loan B-2(b)		—			79,600
Revolving Credit Facility(a) and(b)		—			45,000
		574,127			630,132
Langley mortgage(d)		—			2,016
Vernon mortgage(e)		3,793			3,942
8.25% Second Priority Senior Secured Notes (US$255,000)(f) and(g)		330,098			319,898
		908,018			955,988
Less
Unamortized portion of deferred transaction costs and debt premium related to embedded derivative		(15,100	)		(21,601	)
Current portion		(10,652	)		(53,096	)
		882,266			881,291

a) Term Loan B and Revolving Credit Facility

On March 13, 2018, the Company completed a refinancing (the “2018 Refinancing”) of its prior senior credit facility (the “2017 Senior Secured Credit Facility”) pursuant to an amended and restated credit and guaranty agreement (the “Amended and Restated Credit Agreement”) for a new senior secured credit facility (the “2018 Senior Secured Credit Facility”) to borrow up to the following:

Term Loan B	US$	335,000
Revolving Credit Facility	$	150,000

F-22

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Transaction costs directly related to the issuance of Term Loan B of $5,949 were capitalized and are being amortized using the effective interest rate method over the life of the loan. Transaction costs directly related to the issuance of the Revolving Credit Facility of $2,116 were capitalized and are being amortized on a straight-line basis over the life of the loan.

On July 16, 2018, the Company amended its 2018 Senior Secured Credit Facility pursuant to an amendment to the amended and restated credit and guaranty agreement (the “First Amendment to Amended and Restated Credit and Guaranty Agreement”) to increase its Term Loan B by US$105,000 and increase the amount borrowed to the following:

Term Loan B US$ 440,000

Transaction costs directly related to the transaction of $2,581 were capitalized and are being amortized using the effective interest rate method over the life of the loan. The refinancing resulted in the recognition of a debt modification loss of $6,264.

The 2018 Senior Secured Credit Facility is available as Canadian Dollar Offered Rate (“CDOR”) Loans, Canadian Prime Rate Loans, London Interbank Offered Rate (“LIBOR”) Loans and Base Rate Loans. Base Rate Loans bear interest equal to the highest of the Federal Fund Effective Rate, Prime Rate or the Adjusted LIBOR plus 1/2 of 1.00%.

The interest rate spreads added to the applicable variable rates for the Revolving Credit Facility will be determined quarterly based on the Company’s first lien net leverage ratio as defined in the Amended and Restated Credit Agreement. Interest on the Revolving Credit Facility varies within a range of 300 to 325 basis points above the CDOR Loans and 200 to 225 basis points above the Canadian Prime Rate. Interest on Term Loan B is 300 basis points above LIBOR Loans.

Advances under Term Loan B at September 30, 2018 were LIBOR Loans bearing interest at 5.39%.

The Company can issue letters of credit under the Revolving Credit Facility. As at September 30, 2018, the Company has issued letters of credit totalling $78,107 (December 31, 2017—$55,798) bearing interest at 3.13% (December 31, 2017—3.88%) under the Revolving Credit Facility. The Company has provided the BCLC with letters of credit totalling $nil as at September 30, 2018 (December 31, 2017—$22,362) as security for the cash floats provided as well as a portion of the BCLC’s share of the gaming win held by the Company. The BCLC returned letters of credit of $22,717 as part of the new OSA terms during the nine months ended September 30, 2018. The Company has provided the OLG with letters of credit totalling $72,000 as at September 30, 2018 (December 31, 2017—$32,000) as performance security. Various other letters of credit are provided to selected vendors and municipalities related to general business operations and/or development projects.

As at September 30, 2018, the Company had no outstanding borrowings on the Revolving Credit Facility (December 31, 2017—$45,000).

Term Loan B has repayment terms as follows:

i) Term Loan B will mature on March 13, 2025 provided, however, that if the Company does not redeem, repay or discharge the 8.25% Second Priority Senior Secured Notes (the “8.25% Notes”) by December 31, 2023, and does not extend the maturity date of the 8.25% Notes to a date that is at least 180 days after March 13, 2025, then Term Loan B will mature on the earlier of December 31, 2023 and the date that is 91 days prior to the maturity date of the 8.25% Notes. The Company is required to make

F-23

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

quarterly installments equal to 0.25% of the principal amount of the loan commencing on September 28, 2018 with any outstanding principal repayable at maturity.

ii) On the earlier of delivery of audited financial statements and the 100th day following the end of each fiscal year, beginning with the fiscal year ending December 31, 2018, the Company is required to make an aggregate principal payment (“Excess Cash Payment”). The Excess Cash Payment is equal to 0% to 50% of the excess cash flow, as defined in the Amended and Restated Credit Agreement, for the applicable fiscal year minus the aggregate principal amount of all prepayments during such fiscal year.

Aggregate minimum principal payments, prior to Excess Cash Payments, for each of the next five years ending December 31 for the Term Loan B facility are as follows:

	US$
2018		1,100
2019		4,400
2020		4,400
2021		4,400
2022 and beyond		424,600

The Revolving Credit Facility is repayable on March 13, 2023.

A first charge on all assets of the Company and 7588674 Canada Inc. (“7588674”) (formerly New World) is provided as security for the Term Loan Facility and Revolving Credit Facility.

b) Term Loan B-1, Term Loan B-2 and Revolving Credit Facility

The credit agreement that the Company had entered into on February 22, 2017, the 2017 Senior Secured Credit Facility, was discharged as part of the 2018 Refinancing and outstanding debt balances pertaining to Term Loan B-1, Term Loan B-2 and the Revolving Credit Facility were repaid by March 13, 2018. Deferred transaction costs of $15,124 related to the aforementioned credit agreement were written off as a loss on debt extinguishment.

The 2017 Senior Secured Credit Facility was available as CDOR Loans, Canadian Prime Rate Loans, LIBOR Loans and Base Rate Loans. Base Rate Loans bear interest equal to the highest of the Federal Fund Effective Rate, Prime Rate or the Adjusted LIBOR plus 1.00%.

The interest rate spreads added to the applicable variable rates for the Revolving Credit Facility were determined quarterly based on the Company’s first lien net leverage ratio as defined in the 2017 Senior Secured Credit Facility. Interest on the Revolving Credit Facility varied within a range of 375 to 400 basis points above CDOR Loans. Interest on Term Loan B-1 was 375 basis points above LIBOR Loans. Interest on Term Loan B-2 was 400 basis points above CDOR Loans.

Advances under Term Loan B-1 at December 31, 2017 were LIBOR Loans bearing interest at 5.44%. Advances under Term Loan B-2 at December 31, 2017 were CDOR Loans bearing interest at 5.54%.

The Company issued letters of credit under the Revolving Credit Facility totalling $55,798 as at December 31, 2017 bearing interest at 3.88%.

As at December 31, 2017, the Company had borrowed funds on the Revolving Credit Facility of $45,000 in the form of CDOR Loans bearing interest at 6.20%.

F-24

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

A first charge on all assets of the Company and 7588674 was provided as security for the Term Loan Facilities and Revolving Credit Facility.

c) Old Term Loans, Revolving Credit Facility and Swingline Facility

The credit agreement that the Company had entered into on November 12, 2010 (the “Old Credit Facility”) was discharged when the 2017 Senior Secured Credit Facility was entered into and all outstanding debt balances were repaid by February 28, 2017. Deferred transaction costs of $3,735 related to the aforementioned credit agreement were written off as a loss on debt extinguishment.

Advances under the Term Loan Facilities were available as US Base Rate Loans, LIBOR Rate Loans, Canadian Prime Rate Loans, Banker’s Acceptance (“BA”) Loans and BA Equivalent Loans.

The interest rate spreads added to the applicable variable rates were determined quarterly based on the Company’s total leverage ratio as defined in the credit agreement. Interest on the Term Loan A BA Advances varied within a range of 275 to 375 basis points above BA rates. Interest on the Term Loan B-1 BA Advances varied within a range of 400 to 425 basis points above BA rates. Interest on the Revolving Credit Facility Canadian Prime Advances varied within a range of 175 to 275 basis points above Canadian Prime Rates.

A first charge on all assets of the Company and 7588674 was provided as security for the Term Loan Facilities and Revolving Credit Facility.

d) Langley mortgage

On May 2, 2016, the Company completed the purchase of the land and building adjacent to the Cascades Langley Casino for $3,030 including closing costs. The Company paid for the purchase with $930 in cash and financed the remaining amount with the assumption of a $2,100 mortgage secured by the land and building. The mortgage bears a fixed interest rate of 3.25% per annum and matures on June 1, 2021.

The principal for the Langley mortgage was repaid in full on March 12, 2018 with proceeds from the Sale and Leaseback Transactions (note 6).

e) Vernon mortgage

On January 10, 2014, the Company completed the purchase of the land and building of the existing Lake City Vernon Casino for $8,436 including closing costs. The Company paid for the purchase with $3,786 in cash and financed the remaining amount with the assumption of a $4,650 mortgage secured by the land and building. The mortgage bears a fixed interest rate of 4.29% per annum and matures on April 2, 2019.

The principal payments for each of the next five years ending December 31 for the Vernon mortgage are as follows:

	$
2018		51
2019		3,742
2020		—
2021		—
2022		—

F-25

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

f) 8.25% Second Priority Senior Secured Notes

On February 22, 2017, the Company issued US$255,000 of the 8.25% Notes. The 8.25% Notes mature on March 1, 2024 and bear interest at 8.25% per annum. Interest is payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2017.

A second charge on all assets of the Company and 7588674 is provided as security for the 8.25% Notes.

The Company’s 8.25% Notes agreement has provisions for early redemption during defined periods prior to maturity with the payment of defined premiums, which require separation under the embedded derivative accounting rules. On issuance on February 22, 2017, the fair value of the embedded derivative was $1,516 and was recorded as a derivative asset in other assets and as a premium on the long-term debt in the consolidated balance sheet. The fair value of the embedded derivative included in other assets as at September 30, 2018 was $14,905 (December 31, 2017—$10,795). Accordingly, a change in fair value of embedded derivative gain of $4,110 (December 31, 2017—derivative gain of $9,280) has been recognized during the fiscal period. The premium is amortized over the term of the 8.25% Notes using the effective interest rate method.

Transaction costs directly related to the 8.25% Notes of $10,223 were capitalized and are being amortized using the effective interest rate method over the life of the 8.25% Notes.

In the event of a Change of Control (as defined in the 8.25% Notes agreement), the holders of the 8.25% Notes will have the right to require the Company to repay all or a portion of the outstanding 8.25% Notes at a purchase price equal to 101% of the principal amounts of the 8.25% Notes plus accrued and unpaid interest. This feature is closely related under the embedded derivative accounting rules and does not require separation.

g) The component of other current assets is as follows:

	September 30, 2018		December 31, 2017
	$		$
CCIRS derivative		2,697		—

The components of other non-current assets are as follows:

	September 30, 2018		December 31, 2017
	$		$
Embedded derivative		14,905		10,795
Revolving Credit Facility deferred transaction costs		1,869		2,044
		16,774		12,839

F-26

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

The components of other current liabilities are as follows:

	September 30, 2018		December 31, 2017
	$		$
CCIRS derivative		—		72
Finance lease liabilities		379		—
		379		72

The components of other non-current liabilities are as follows:

	September 30, 2018		December 31, 2017
	$		$
CCIRS derivatives		9,770		27,693
Finance lease liabilities		444		—
Deferred revenue		500		750
		10,714		28,443

On July 16, 2018, the Company amended its existing CCIRS contracts in relation to Term Loan B. Management has entered into CCIRS contracts that cover 75% of the senior secured first lien loan of US$440,000. The CCIRS contracts: (i) terminate on March 14, 2022; (ii) are fixed at an average 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, which cover 75% of the US$255,000 principal: (i) terminate on March 1, 2021; (ii) are fixed at a US dollar to Canadian dollar foreign exchange rate of 1.3168; and (iii) bear a fixed weighted average interest rate of 7.85%.

h) As part of completing the Playtime Gaming Group Inc. acquisition, the vendor group placed a third charge mortgage on the real estate asset located in Courtenay, British Columbia that was acquired.

F-27

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

The change in liabilities arising from financing activities is as follows:

	Current portion of long-term debt			Long-term debt
	$			$
Balance—December 31, 2017		53,096			881,291
Cash flows from (used in)
Term Loan B		5,696			563,605
Deferred transaction costs		—			(8,530	)
Repayment of long-term debt
Mortgage		(2,164	)		—
Term Loan B		—			(1,424	)
Term Loan B-1		(5,081	)		(500,451	)
Term Loan B-2		(800	)		(78,800	)
Revolving Credit Facility		(45,000	)		—
Total cash movements		(47,349	)		(25,600	)
Non-cash changes
Amortization of deferred transaction costs		—			1,559
Loss on debt extinguishment		—			13,178
Loss on debt modification		1,162			5,102
Foreign exchange loss		—			10,479
Reclassification of long-term debt		3,743			(3,743	)
Total non-cash movements		4,905			26,575
Balance—September 30, 2018		10,652			882,266

10     Share capital

Authorized

Unlimited number of voting common shares without par value

Issued and outstanding

	Number of shares		Amount
			$
Balance—December 31, 2016		39,389,618		347,163
Issued to a director for services rendered		8,946		102
Return of capital		—		(191,680	)
Balance—December 31, 2017		39,398,564		155,585
Issued to a director for services rendered		8,946		101
Return of capital (US$100,000)		—		(128,746	)
Balance—September 30, 2018		39,407,510		26,940

F-28

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

On February 15, 2017, the Board of Directors of the Company approved a resolution authorizing a US$100,000 ($131,680) reduction in stated capital of the Company and the return of the US$100,000 ($131,680) capital reduction to the common shareholders. Shareholders of the Company as at February 15, 2017 were paid their pro rata share of the stated capital reduction based on the number of shares held.

On December 28, 2017, the Board of Directors of the Company approved a resolution authorizing a $60,000 reduction in stated capital of the Company and the return of the $60,000 capital reduction to the common shareholders. Shareholders of the Company as at December 28, 2017 were paid their pro rata share of the stated capital reduction based on the number of shares held.

On March 12, 2018, the Board of Directors of the Company approved a resolution authorizing a US$100,000 ($128,746) reduction in stated capital of the Company and the return of the US$100,000 ($128,746) capital reduction to the common shareholders. Shareholders of the Company as at March 12, 2018 were paid their pro rata share of the stated capital reduction based on the number of shares held. A bondholder consent fee and related costs of $7,592 were paid in relation to the return of capital to shareholders and was recorded as part of transaction costs (note 12).

Share-based compensation

The Company has entered into arrangements to provide share-based compensation to select executives and a director.

The most significant arrangements provide for certain executives of the Company to receive a number of shares based on a monetary value determined at a future date based on the payment of dividends (other than recurring dividends) or certain future liquidity events, provided the executive is employed by the Company or within six months of the date of the liquidity events if terminated without just cause. Potential liquidity events involve the sale of the common shares of the Company by the existing shareholders. The monetary value is determined based on the price of the common shares and the number of common shares sold at the future event.

a) The number of potential shares issuable under the share-based payment arrangements as at September 30, 2018 is 2,292,843 (December 31, 2017—2,194,377) if all of the common shares held by existing shareholders are sold. The award under the arrangement is considered to be granted and the weighted average fair value of the award is $10.51 per share as at September 30, 2018 (December 31, 2017— $10.43). The fair value was based on the Company’s estimate of the fair value of its common shares at the award date based on the most recent share issuance. The Company has estimated the number of shares expected to vest based on its estimate of the most likely possible outcome of a sale of some or all common shares by the existing shareholders and the possible service periods of the executives. The number of shares expected to vest as at September 30, 2018 is 1,954,157 (December 31, 2017—1,457,234).

The length of the vesting period depends on various events and the Company has estimated the expected vesting period based on the most likely outcome of the performance condition. The Company revises its estimate of the length of the vesting period, if necessary, if subsequent information indicates that the period has changed.

b) During the nine months ended September 30, 2018, the Company issued 8,946 common shares (September 30, 2017—issued 8,946 common shares) with an aggregate value of $101 (December 31, 2017—$102) to a director for services rendered.

F-29

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

c) As a result of the return of the $131,680 capital reduction on February 15, 2017, certain executives of the Company became entitled to share-based compensation of $9,653. The payment of these amounts was made in cash, with $1,486 paid in cash during the nine months ended September 30, 2018.

d) As a result of the return of the $60,000 capital reduction on December 28, 2017, certain executives of the Company became entitled to share-based compensation of $3,888. The payment of these amounts was made in cash.

e) As a result of the return of the $128,746 capital reduction on March 12, 2018, certain executives of the Company became entitled to share-based compensation of $8,718. The payment of these amounts was made in cash.

As a result of the history of the Board of Directors approving payment of share-based compensation related to the return of the capital reduction to the common shareholders in cash, a portion of share-based compensation is now considered cash settled. This portion has been recognized at fair value. As at September 30, 2018, an amount of $272 (December 31, 2017—$5,686) had been included in accounts payable and accrued liabilities.

During the three and nine months ended September 30, 2018, the Company recognized total share-based compensation of $223 and $8,441 (three and nine months ended September 30, 2017—$3,613 and $17,741).

11    Income taxes

On the consolidated balance sheet, deferred tax assets and liabilities have been offset where the Company has the legal right and intends to offset.

Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable.

At September 30, 2018, the Company has non-capital losses carried forward for federal income tax purposes of $306,947 (December 31, 2017—$283,145; December 31, 2016—$231,236). The non-capital losses expire from 2033 to 2038. Of this amount, non-capital losses pertaining to $306,947 (December 31, 2017—$283,145; 2016—$132,085) have not been recognized in these consolidated financial statements.

During the three and nine months ended September 30, 2018, the Company estimates that it will have approximately $nil and $193,459 of net income for tax purposes that can be reduced through utilization of the Company’s existing non-capital losses. As such, the Company recognized deferred tax assets in relation to the existing non-capital losses during the nine months ended September 30, 2018, that were previously unrecognized non-capital losses as at the year ended December 31, 2017. This recognized deferred tax asset has also been expensed in the nine months ended September 30, 2018 to reflect the anticipated utilization of the corresponding non-capital losses.

The acquisition of POM, as more fully described in Note 18, is intended to allow the Company to utilize POM’s non-capital losses, which NMRC has represented to be not less than $217,000. The Company’s ability to access and utilize these non-capital losses may be limited in certain circumstances, including upon an acquisition of control of the Company. NMRC has indemnified the Company for any breach of representations made, up to a maximum of 50% of the total purchase price paid, being a maximum of $8,148. The Company has not recognized any deferred tax asset in relation to these acquired non-capital losses in these condensed consolidated interim financial statements.

F-30

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

At September 30, 2018, 7588674 has non-capital losses carried forward for federal income tax purposes of $nil (December 31, 2017—$nil; December 31, 2016—$37,019).

At September 30, 2018, the recovery of income taxes is recognized based on the weighted average annual income tax rate expected for the year of 26.73% (December 31, 2017—26.21%; December 31, 2016—26.08%).

Other income tax matters

The Canada Revenue Agency (“CRA”) has conducted audits of the Company’s and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. relating to the taxation years ended December 31, 2010 to 2014. The CRA has taken the view to recharacterize FDC amounts as taxable income, as well as reclassify amounts included in Class 14 as Eligible Capital Property.

For accounting purposes, FDC is recorded as part of revenues in the consolidated statement of operations and comprehensive loss when received. For income tax purposes, based on the underlying operating agreements with the BCLC and the BCLC FDC policy, management believes that FDC received from the BCLC is appropriately characterized under the relevant income tax laws as a reimbursement and a reduction of the cost of the related long-lived asset.

As part of its audit, the CRA has taken the view that FDC was received as service fee income and should be included in taxable income when received instead of being a reimbursement of the BCLC-approved gaming related property, plant and equipment costs as filed by the Company and its subsidiaries. If the CRA’s current views prevail, it would accelerate the timing of when the Company and its subsidiaries recognize taxable income, but would also increase the tax depreciation deduction (capital cost allowance) that the Company could recognize in prior and future years.

During the year ended December 31, 2015, the Company received notices of reassessment and/or notices of determination of loss from the CRA relating to the taxation years ended December 31, 2010 to 2012 inclusive for the Company and December 31, 2011 and 2012 inclusive for its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. During the year ended December 31, 2017, the Company received notices of determination of loss from the CRA relating to the taxation years ended December 31, 2013 to 2014 and a notice of reassessment relating to the taxation years ended December 31, 2015 and 2016 for the Company. The Company also received a notice of determination of loss from the CRA relating to the taxation year ended December 31, 2014 pertaining to Boardwalk Gaming Squamish Inc. and a notice of reassessment from the CRA relating to the taxation year ended December 31, 2014 pertaining to 427967 B.C. Ltd. During the nine months ended September 30, 2018, the Company received a notice of confirmation from the CRA relating to the taxation year ended December 31, 2010 and the taxation years ended December 31, 2012 to 2014 inclusive. The Company also received a notice of confirmation from the CRA relating to the taxation year ended December 31, 2011, 2012 and 2014 pertaining to Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd, respectively.

The Company and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. intend to vigorously defend their tax filing and have filed notices of objection to the above notices of reassessments and notices of determination of loss and, filed a notice of appeal to the Tax Court of Canada. The Company and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. plan to file a notice of objection to the CRA in response to each notice of reassessment and/or notice of loss determination received for any subsequent

F-31

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

years, where appropriate. The Company believes that the filing positions adopted are appropriate and in accordance with the law. The Company also believes it has substantial defences in response to the matters raised by the CRA and will vigorously appeal the reassessments and redeterminations. No provision has been made in these consolidated financial statements for the reassessments. The Company has sufficient non-capital loss carry-forwards to offset any additional income taxes that are payable as a result of the reassessments. During the year ended December 31, 2015, the CRA accepted the Company’s application of non-capital loss carry-forwards for years in which the reassessments resulted in taxable income to eliminate taxes payable and prevent interest and penalties from accruing. According to the notices of reassessment and notices of determination of loss received and the CRA proposed amendments, net income (loss) for tax purposes for the taxation years ended December 31, 2010, 2011, 2012, 2013, 2014, 2015 and 2016 would increase by $1,715, $30,908, $31,217, $30,073, $31,840, $28,528 and $28,528, respectively. The likely timing to resolve this matter may take years.

The CRA has conducted excise tax audits of the Company and its subsidiary 7588674 relating to the taxation period of May 18, 2010 to June 30, 2015 and February 1, 2010 to September 16, 2010, respectively. The CRA has taken the view that the Company and its subsidiary were not providing a financial service to their customers in relation to ATM fees collected, and as such, GST and/or HST should have been collected and remitted as the Company and its subsidiary were not providing an exempt supply.

During fiscal 2017, the Company and its subsidiary 7588674 received a reassessment from the CRA relating to the taxation period of May 18, 2010 to June 30, 2015 and February 1, 2010 to September 16, 2010, respectively. In the reassessment, the CRA has issued an adjustment to the net tax on the Company’s GST/HST returns of $2,534 and an adjustment to the net tax on its subsidiary 7588674’s GST/HST returns of $219. In addition, the CRA has assessed penalties of approximately $634 and $55, respectively. At September 30, 2018, the Company and its subsidiary 7588674 remitted to the CRA $641 and $55, respectively.

The Company and its subsidiary 7588674 intend to vigorously defend their tax filing positions and filed notices of objection to the CRA and, if necessary, will file notices of appeal to the Tax Court of Canada. At September 30, 2018, the Company and its subsidiary 7588674 have remitted to the CRA $2,534 and $219, respectively.

12    Other expenses

	Three months ended September 30, 2018		Three months ended September 30, 2017			Nine months ended September 30, 2018		Nine months ended September 30, 2017
	$		$			$		$
Business acquisition costs		1,820		(1,011	)		2,312		3,858
Transaction costs		4,244		1,837			16,283		1,837
Site pre-opening costs		311		78			3,704		937
Restructuring costs		91		662			4,449		818
Other		322		2,364			1,500		3,839
		6,788		3,930			28,248		11,289

F-32

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

13    Interest expense

	Three months ended September 30, 2018		Three months ended September 30, 2017		Nine months ended September 30, 2018		Nine months ended September 30, 2017
	$		$		$		$
Interest on long-term debt		13,131		14,520		38,593		42,115
Amortization of deferred transaction costs and premium on long-term debt		773		656		2,196		1,916
Non-deductible interest and penalties		—		—		1,016		—
		13,904		15,176		41,805		44,031

14    Financial instruments

Financial risk management

The Company’s activities expose it to a variety of financial risks, which include credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The Company’s risk management activities are designed to mitigate possible adverse effects on the Company’s performance. Risk management activities are managed by the finance and accounting department.

The Company’s significant financial instruments and the types of risks to which their carrying values are exposed are as follows:

	Risks
					Market risk
	Credit		Liquidity		Interest rate		Foreign exchange rate
Cash and cash equivalents		X				X
Amounts receivable		X
Derivative financial assets (other assets)		X				X		X
Derivative financial liabilities (other liabilities)						X		X
Gaming revenue payable to BCLC, AGLC and OLG				X
Accounts payable and accrued liabilities				X				X
Deferred consideration payable				X
Long-term debt				X		X

F-33

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Credit risk

Credit risk is the risk that a party to one of the Company’s financial instruments will cause a financial loss to the Company by failing to discharge an obligation. The carrying values of the Company’s financial assets represent the maximum exposure to credit risk and are as follows:

	September 30, 2018		December 31, 2017
	$		$
Cash and cash equivalents		210,567		97,385
Amounts receivable		54,453		39,838
Contract assets		6,061		—
		271,081		137,223

Cash and cash equivalents: Credit risk associated with these assets is minimized by ensuring that cash and cash equivalents are held by high-quality financial institutions.

IFRS 9’s new impairment requirements use forward-looking information to recognize expected credit losses—the ‘expected credit loss’ (ECL) model, which replaces the ‘incurred loss’ model in IAS 39. The Company applies the IFRS 9 simplified approach in determining the credit risks of financial instruments and accounting for the amounts receivables and contract assets. The new impairment model is applied at each balance sheet date to the Company’s amounts receivables and contract assets.

The ECL model did not have significant impact on the Company’s amounts receivables as the majority of the balances are due from the federal government and provincial gaming corporations and contract assets are due from the OLG. See below for the application of the ECL model on the accounting for markers receivable.

Amounts receivable: Credit risk associated with these balances is minimized due to the nature of the Company’s business. The majority of the balances are due from the federal government for sales tax rebates and from provincial gaming corporations.

Included in the Company’s amounts receivable is markers receivable balance from gaming patrons. The Company continuously monitors the credit quality of customers based on a credit rating analysis. Where available, external credit ratings and/or reports on customers are obtained and used. The Company’s policy is to deal only with creditworthy counterparties. The credit terms range between 2 and 30 days. The credit terms for customers as negotiated with customers are subject to an internal approval process which considers the credit rating analysis. The ongoing credit risk is managed through regular review of ageing analysis, together with credit limits per customer.

The Company applies the IFRS 9 simplified model of recognizing lifetime expected credit losses for all markers receivables as these items do not have a significant financing component.

In measuring the expected credit losses, the markers receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the collections portfolio status of customers.

F-34

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

The expected loss rates are based on the payment profile for credit extended over the past 15 months before September 30, 2018 as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forward looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding.

Markers receivables are written off (i.e. derecognized) when there is no reasonable expectation of recovery. Failure to make payments within 365 days from the marker issuance date and failure to engage with the Company on alternative payment arrangement amongst other are considered indicators of no reasonable expectation of recovery.

As at September 30, 2018, the Company had a gross markers receivable balance of $4,846 (December 31, 2017—$nil) and a provision for bad debts of $3,961 (December 31, 2017—$nil) and no amounts receivable were past due or impaired.

Contract assets: Credit risk associated with these balances is minimized due to the nature of the Company’s business. The balance represents the variable consideration of the Company’s revenue from the OLG. The performance obligation is satisfied over each operating year and revenue is recognized over time by measuring the progress towards achieving the predetermined threshold.

Below is a summary of contract assets from contracts with customers and the significant changes in those balances during the nine months ended September 30, 2018 and 2017.

	September 30, 2018			December 31, 2017
Beginning balance		—			—
Additions		17,911			—
Amortization of contract assets to accounts receivable		(11,850	)		—
Ending balance		6,061			—

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset. The Company settles its financial obligations out of cash and cash equivalents. The ability to do this relies on the Company generating sufficient revenue, collecting amounts receivable in a timely manner, and maintaining sufficient cash and cash equivalents for anticipated needs.

F-35

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

The contractual maturity of the Company’s financial liabilities including estimated interest based on the total leverage ratio requirements under the terms of the 2018 Senior Secured Credit Facility agreement and excluding Excess Cash Payments for fiscal years ending December 31, 2018 and onwards (note 9) on an undiscounted basis is as follows:

	Expected payments by period as at September 30, 2018
	Expected within 1 year		2 - 3 years		4 - 5 years		More than 5 years		Total
	$		$		$		$		$
Gaming revenue payable to BCLC, AGLC and OLG		13,475		—		—		—		13,475
Accounts payable and accrued liabilities		102,526		—		—		—		102,526
Deferred consideration payable		700		—		—		—		700
Long-term debt		70,482		134,416		131,936		897,944		1,234,778
		187,183		134,416		131,936		897,944		1,351,479

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates and/or foreign currency exchange rates or other price risk.

Interest rate risk

Interest rate risk is the risk that the fair value or cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s variable rate long-term debt is subject to significant cash flow interest rate risk.

If interest rates on the Company’s variable rate long-term debt had been 1% higher or 1% lower, with all other variables held constant, the effect on the Company’s interest expense for the nine months ended September 30, 2018 would have been $3,739 (December 31, 2017—$5,661) higher or lower, respectively.

Foreign exchange rate risk

Foreign exchange rate risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates.

The Company has cash and cash equivalents denominated in US dollars. As at September 30, 2018, US dollar denominated cash and cash equivalents totalled US$5,152 (December 31, 2017—US$5,598).

The Company periodically has accounts payable and accrued liabilities denominated in US dollars. As at September 30, 2018, US dollar denominated accounts payable and accrued liabilities totalled US$17,349 (December 31, 2017—US$22,246).

Management has entered into CCIRS contracts which cover 75% of the US$695,000 principal value of the US dollar denominated debt at a fixed US dollar to Canadian dollar foreign exchange rate of 1.3166. For additional details on the CCIRS contracts, refer to note 9.

F-36

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

If the period-end foreign exchange rate had been 10% higher or 10% lower, with all other variables held constant, the effect on the Company’s net income for the period ended September 30, 2018 would have been $90,350 (December 31, 2017—$85,319) higher or lower, respectively.

Fair values of financial instruments

Financial assets and liabilities accounted for or disclosed at fair value on a recurring basis are classified within a fair value hierarchy that reflects the significance of the inputs used in determining fair value. There are three levels of the fair value hierarchy.

Level 1—Quoted prices in active markets for identical assets

Instruments that have unadjusted quoted prices available in an active market for identical assets or liabilities.

Level 2—Significant other observable inputs

Instruments that do not have quoted prices in active markets but for which market observable inputs are used as the inputs in the determination of fair value.

Level 3—Unobservable inputs

Instruments that have a significant input into the fair value measurement that is derived from management’s best estimates and market observable information is not available for such input.

The Company’s only financial instruments accounted for at fair value subsequent to initial recognition are the embedded derivatives and CCIRS, which are classified as held-for-trading.

The Company’s other financial instruments are measured at amortized cost. The Company provides fair value disclosures for financial instruments measured at amortized cost. The carrying values of cash and cash equivalents, amounts receivable, gaming revenue payable to BCLC, AGLC and OLG, and accounts payable and accrued liabilities approximate their fair values because of the short-term nature of these instruments.

The fair value disclosures involve the use of fair value measurements. These fair value disclosure measurements are categorized as follows in the fair value hierarchy:

			September 30, 2018				December 31, 2017
	Fair value hierarchy		Carrying amount		Fair value		Carrying amount		Fair value
			$		$		$		$
Financial instruments
Derivative financial instruments (other assets)		Level 3		17,602		17,602		10,795		10,795
Derivative financial instruments (other liabilities)		Level 3		9,770		9,770		27,765		27,765
Deferred consideration payable		Level 3		—		—		400		400
Long-term debt		Level 3		892,918		922,208		934,387		986,771

F-37

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Term Loan B was fair valued using an effective rate as at September 30, 2018 of 6.00%. The 8.25% Notes were fair valued using an effective rate of 5.91% (December 31, 2017—5.90%).

The fair value of the Company’s 8.25% and 8.50% Notes (the “Notes”) has two components of value: a conventional Note obligation and a prepayment option that allows the Company in certain circumstances to prepay the Notes. The prepayment option is exercisable through payment of a prepayment penalty. The Company has determined that the prepayment option is an embedded derivative. Accordingly, on initial recognition of the obligations on issuance of the Notes, a prepayment option asset has been recorded. The Notes and embedded derivative have been separately valued.

On initial recognition, the estimated future cash flows of long-term debt were discounted using a discount rate derived from an appropriate risk-free interest rate yield curve commensurate with the timing of the contractual maturity of the future cash flows. A credit spread was added to the risk-free rate to derive the total rate. As the Company does not have a market observable credit spread, the Company obtained a range of potential credit spreads available from market observable information on entities with a comparable credit risk and debt maturity to the Company. In determining the appropriate credit spread input to the discounted cash flow model at the reporting date, the Company selected its best estimate of the credit spread that was within the Company’s estimate of a reasonably possible range of credit spreads based upon observable market information. The Company used a consistent valuation method and related valuation model as at September 30, 2018 and December 31, 2017 to provide fair value disclosure of long-term debt.

The embedded prepayment options that have been separated from the Notes are valued using the Hull-White one factor model as implemented in the FINCAD callable bond function, for which the key inputs at September 30, 2018 are the mean-reversion constant of 17.11% (December 31, 2017—12.68%) and interest rate volatility of 1.43% (December 31, 2017—1.14%). The embedded prepayment options are subsequently measured at FVTPL. The embedded derivative financial instrument is measured on a recurring basis and the fair value measurement is categorized in Level 3 of the fair value hierarchy.

The CCIRS derivatives are valued using a discounted cash flow model as implemented in the Bloomberg Swap Manager for which the key inputs are the terms of the CCIRS contracts and market data as at September 30, 2018. The CCIRS derivatives are subsequently measured at FVTPL. The CCIRS derivative financial instruments are measured on a recurring basis and the fair value measurement is categorized in Level 3 of the fair value hierarchy.

F-38

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Movement in the value of derivative financial instruments is as follows:

	September 30, 2018			December 31, 2017
	$			$
Opening balance—embedded derivative		10,795			773
Loss on debt extinguishment related to the 8.50% Notes		—			(773	)
Inception fair value of embedded derivative related to the 8.25% Notes		—			1,515
Change in fair value of embedded derivative related to the 8.25% Notes		4,110			9,280
Closing balance—embedded derivative		14,905			10,795
Opening balance—CCIRS derivatives		(27,765	)		—
Inception fair value of CCIRS derivatives		(440	)		—
Change in CCIRS derivatives		21,132			(27,765	)
Closing balance—CCIRS derivatives		(7,073	)		(27,765	)

The change in CCIRS derivatives in the above table does not include the settlement amounts of the CCIRS derivatives.

15    Capital management

The Company’s capital structure comprises equity (deficiency), long-term debt and outstanding letters of credit.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company’s strategy is to ensure it remains compliant with all of its existing debt covenants, so as to ensure continuous access to debt capital markets. Management reviews results and forecasts regularly to monitor the Company’s compliance.

The Amended and Restated Credit Agreement for Term Loan B and the Revolving Credit Facility (note 9) requires compliance with the following financial performance covenant: total net leverage ratio as defined in the credit agreement. The Company is in compliance with the financial covenant as at September 30, 2018.

Under the terms of the Amended and Restated Credit Agreement relating to its Term Loan and Revolving Credit Facilities, the Company is permitted to remedy non-compliance with debt covenants by completing an equity cure by issuing common shares of the Company and repaying the Term Loan with the proceeds from the share issuance. Equity cures are available to the Company five times during the term of the agreement.

16    Commitments and contingencies

Operating lease commitments

The Company leases office space and equipment as well as certain of its casino and community gaming centre locations. The lease terms are between one and 23 years, and the majority of lease agreements are

F-39

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

renewable at the end of the lease period at market rent. At September 30, 2018, future minimum operating lease payments (excluding variable rent based on revenue and additional rent for operating expenses) are as follows:

	$
No later than 1 year		74,608
Later than 1 year and no later than 5 years		269,318
Later than 5 years		1,080,418
		1,424,344

As at September 30, 2018, the Company recognized operating lease expense of $42,414 (September 30, 2017—$13,537).

Other commitments

The Company has covenanted to the OLG that the OLG shall realize gaming revenue in each year that is equal to or greater than an agreed upon threshold in respect of each operating year, or to otherwise pay to the OLG the amount by which the gaming revenue realized in a year is less than the applicable threshold in respect of such year (each such payment, a “Threshold Top-Up Amount”). Based on the Ontario operating results, the likelihood that the Company will fail to generate sufficient gaming revenue for the OLG for any year is expected to be remote, and as such, no provision has been made for Threshold Top-Up Amounts.

On February 14, 2018, the Company signed the OSAs with the BCLC in relation to all its British Columbia casino and community gaming centre operations, effective April 1, 2018. The OSAs have a 20-year term with an option to extend for an additional five years. All the Company’s British Columbia casino and community gaming centre operations will be entitled to payments from the BCLC for both eligible gaming and other eligible capital expenditures at a rate of 5% of net win through the Minimum Investment Requirement (“MIR”) program, replacing the BCLC’s FDC and Accelerated Facility Development Costs program, as long as the Company fulfills the required MIR spend amount over the 20-year term. The minimum investment that the Company is required to make over the 20 year term of the OSA is approximately $700 million which can be reduced by the carry forward balance under the FDC and Accelerated Facility Development Costs program.

As at March 12, 2018, the Company committed to a security deposit in relation to the sale and leaseback properties of $10,000 to be paid over 36 months effective April 1, 2018. In the event of the properties sold as part of the Sale and Leaseback Transactions being expropriated, the rental payments owing by the Company to the landlord will continue as a contractual obligation for the remainder of the lease term (note 6(f)).

As at September 30, 2018, the Company has committed to purchase orders in relation to the acquisition of slot machines of US$1,334 (December 31, 2017—US$5,686).

As at September 30, 2018, the Company has committed to purchase orders or agreements in relation to the development and/or renovation of certain casinos and community gaming centres of $17,119 (December 31, 2017—$22,948).

As at September 30, 2018, the Company has committed to purchase orders in relation to the implementation of the gaming management system of US$1,748 (December 31, 2017—$nil).

F-40

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Contingencies

Various claims and litigation arise in the course of the Company’s business. The Company believes it has accounted for sufficient provisions in relation to such claims and litigation, and remaining contingencies should not have a material effect on the financial position or operating results of the Company.

17    Changes in non-cash working capital items

	Nine months ended September 30, 2018			Nine months ended September 30, 2017
	$			$
Amounts receivable		(4,451	)		(23,765	)
Contract assets		(6,061	)		—
Inventory		66			(9	)
Prepaid expenses and deposits		(7,421	)		(1,814	)
Gaming revenue payable to BCLC, AGLC and OLG		(425	)		8,435
Accounts payable and accrued liabilities		10,813			8,336
Deferred revenue		2,097			—
		(5,382	)		(8,817	)

18    Related party transactions

The Company is controlled by The Catalyst Capital Group Inc. (incorporated in Canada), which owns 73.6% of the Company’s shares and is the Company’s ultimate controlling party.

During the nine months ended September 30, 2018, shareholders of the Company provided consulting and advisory services without charge.

On June 29, 2018, the Company entered into a share purchase agreement with Nature Market Restaurants Corp. (“NMRC”) to acquire all of the shares of NMRC’s wholly owned subsidiary, 7562578 Canada Inc. (“POM”), for a purchase price of $16,295. Catalyst II, Catalyst II-P and Catalyst III (“Catalyst Entities”) own and control NMRC. The closing of the POM acquisition occurred on July 13, 2018 (“Closing Date”). The purchase price payable by the Company was satisfied by way of a $14,711 deposit paid by the Company to the Catalyst Entities, with a holdback of $1,584 to be released 12 months following the Closing Date, assuming all conditions of release are met. The acquisition of POM is intended to allow the Company to utilize POM’s non-capital losses, which NMRC has represented to be not less than $217,000.

F-41

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

Compensation of key management

Key management includes the Company’s Board of Directors and executive officers. Compensation awarded to key management is as follows:

	September 30, 2018		December 31, 2017
	$		$
Salaries and other benefits		2,721		3,314
Share-based compensation		8,441		19,631
		11,162		22,945

19    Segmented information

The Company has eight reporting segments: Grand Villa Burnaby, Cascades Langley, Starlight New Westminster, Thompson-Okanagan, Community Gaming Centres, Ontario, Edmonton and Corporate. Although Edmonton and Corporate did not meet the quantitative thresholds required by IFRS 8, Operating Segments, for reportable segments, management concluded that these segments should be reported, as they are closely monitored by the chief operating decision maker. All business of the Company is conducted in Canada.

	Nine months ended September 30, 2018		Nine months ended September 30, 2017
	$		$
Gaming
Grand Villa Burnaby		66,493		57,541
Cascades Langley		37,120		34,345
Starlight New Westminster		33,607		33,287
Thompson-Okanagan		26,470		34,568
Community Gaming Centres		17,898		18,092
Ontario		203,153		77,176
Edmonton		14,879		15,562
Corporate		—		—
		399,620		270,571
Food and beverage
Grand Villa Burnaby		12,443		10,348
Cascades Langley		7,555		8,262
Starlight New Westminster		5,314		5,340
Thompson-Okanagan		7,490		10,880
Community Gaming Centres		4,359		4,428
Ontario		8,267		2,233
Edmonton		6,815		6,464
Corporate		—		—
		52,243		47,955
Hotel
Grand Villa Burnaby		8,948		8,812
Cascades Langley		1,585		1,836

F-42

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

	Nine months ended September 30, 2018		Nine months ended September 30, 2017
	$		$
Starlight New Westminster		—		—
Thompson-Okanagan		—		—
Community Gaming Centres		—		—
Ontario		1,670		—
Edmonton		—		—
Corporate		—		—
		12,203		10,648
Automated teller machines
Grand Villa Burnaby		1,535		733
Cascades Langley		1,356		704
Starlight New Westminster		1,032		546
Thompson-Okanagan		1,185		829
Community Gaming Centres		955		775
Ontario		6,271		2,494
Edmonton		765		437
Corporate		—		—
		13,099		6,518
Other
Grand Villa Burnaby		1,081		552
Cascades Langley		872		688
Starlight New Westminster		671		730
Thompson-Okanagan		316		268
Community Gaming Centres		526		480
Ontario		3,179		148
Edmonton		461		318
Corporate		6		92
		7,112		3,276
Segment revenue
Grand Villa Burnaby		90,500		77,986
Cascades Langley		48,488		45,835
Starlight New Westminster		40,624		39,903
Thompson-Okanagan		35,461		46,545
Community Gaming Centres		23,738		23,775
Ontario		222,540		82,051
Edmonton		22,920		22,781
Corporate		6		92
		484,277		338,968
Segment earnings before depreciation, amortization, share-based compensation and other expenses
Grand Villa Burnaby		30,557		34,380
Cascades Langley		18,444		21,783

F-43

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

September 30, 2018 and 2017

(expressed in thousands of Canadian dollars)

	Nine months ended September 30, 2018			Nine months ended September 30, 2017
	$			$
Starlight New Westminster		10,556			14,248
Thompson-Okanagan		5,757			10,422
Community Gaming Centres		9,916			9,421
Ontario		75,489			36,252
Edmonton		(9,498	)		(5,926	)
Corporate		(24,972	)		(15,473	)
		116,249			105,107
Amortization of intangible assets		20,951			40,112
Depreciation of property and equipment		31,559			32,288
Writedown of non-financial assets		—			167
Other expenses		28,248			11,289
Share-based compensation		8,441			17,741
Income before other expenses (income) and income taxes		27,050			3,510
Other expenses (income)
Interest expense		41,805			44,031
Interest income		(141	)		(663	)
Change in fair value of embedded derivatives		(4,110	)		(3,759	)
Change in fair value of cross currency interest rate swaps		(21,891	)		37,167
Loss on debt extinguishment		15,124			16,135
Loss on debt modification		6,264			—
Gain on sale of property and equipment		(192,373	)		(5	)
Foreign exchange loss (gain)		25,480			(53,066	)
		(129,842	)		39,840
Income (loss) before income taxes		156,892			(36,330	)
Income tax (expense) recovery
Current		(1,321	)		(686	)
Deferred		661			574
		(660	)		(112	)
Income (loss) and comprehensive income (loss) for the period		156,232			(36,442	)

20    Subsequent events

a) Shareholders of the Company approved a resolution on October 15, 2018 authorizing a reduction in stated capital of the Company and the return of the capital reduction to the common shareholders. Shareholders of the Company as at October 25, 2018 were paid their pro rata share of the stated capital reduction of $7,500 based on the number of shares held.

b) On October 18, 2018, the Company entered into a purchase and sale agreement (subject to standard closing terms) for the sale of the vacant land in Penticton, BC for gross proceeds of $1,900. The sale was completed on October 31, 2018.

F-44

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

F-45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Gateway Casinos & Entertainment Limited

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Gateway Casinos & Entertainment Limited and subsidiaries (the “Company”) as of December 31, 2017, the related consolidated statement of operations and comprehensive loss, changes in (deficiency) equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Change in Accounting Principle

As discussed in Note 4 to the consolidated financial statements, the Company adopted International Financial Reporting Standards 15, Revenue from Contracts with Customers, using the full retrospective method on January 1, 2018, which resulted in changes to accounting policies and adjustments to the amounts recognized in the consolidated financial statements.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2018.

Minneapolis, Minnesota

December 18, 2018

F-46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Gateway Casinos & Entertainment Limited

We have audited the accompanying consolidated balance sheet of Gateway Casinos & Entertainment Limited and its subsidiaries as of December 31, 2016, and the related consolidated statements of operations and comprehensive loss, changes in (deficiency) equity, and cash flows for the years ended December 31, 2016 and 2015. Management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. We were not engaged to perform an audit of the company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gateway Casinos & Entertainment Limited and its subsidiaries as of December 31, 2016, and the results of their operations and their cash flows for the years ended December 31, 2016 and 2015 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

As discussed in Note 4 to the consolidated financial statements, Gateway Casinos & Entertainment Limited adopted International Financial Reporting Standards 15, Revenue from Contracts with Customers, using the full retrospective method as of January 1, 2018, which resulted in changes to accounting policies and adjustments to the amounts recognized in the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia, Canada

December 18, 2018

F-47

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONSOLIDATED BALANCE SHEETS

As at December 31, 2017 and 2016

(expressed in thousands of Canadian dollars)

	2017			2016
	$			$
Assets
Current assets
Cash and cash equivalents (note 7)		97,385			37,453
Amounts receivable (note 8)		39,838			2,519
Inventory (note 9)		3,300			1,916
Prepaid expenses and deposits		3,455			2,783
Assets held for sale (note 10)		299,626			—
		443,604			44,671
Non-current assets
Property and equipment (note 10)		334,038			486,690
Intangible assets (note 11)		236,226			267,992
Goodwill (note 12)		8,505			8,505
Other assets (note 14)		13,997			1,335
Deferred income taxes (note 16)		—			3,338
		592,766			767,860
Total assets		1,036,370			812,531
Liabilities
Current liabilities
Gaming revenue payable to BCLC, AGLC and OLG		13,900			6,739
Accounts payable and accrued liabilities (note 13)		96,306			44,956
Current portion of long-term debt (note 14)		53,096			57,037
Current portion of deferred consideration payable		1,200			7,200
Deferred revenue		1,726			—
Other current liabilities (note 14)		72			—
		166,300			115,932
Non-current liabilities
Other liabilities (note 14)		28,443			—
Deferred consideration payable		400			1,600
Deferred rent		5,263			3,036
Long-term debt (note 14)		881,291			476,864
Deferred income taxes (note 16)		14,826			20,311
		930,223			501,811
Total liabilities		1,096,523			617,743
(Deficiency) Equity
Share capital (note 15)		155,585			347,163
Contributed surplus (note 15)		9,402			7,614
Deficit		(227,244	)		(162,160	)
Total (deficiency) equity attributable to shareholders		(62,257	)		192,617
Non-controlling interest		2,104			2,171
Total (deficiency) equity		(60,153	)		194,788
Total liabilities and (deficiency) equity		1,036,370			812,531
Commitments and contingencies (notes 16 and 21)
Subsequent events (notes 1, 3, 15, 16, 21 and 27)

The accompanying notes are an integral part of these consolidated financial statements.

F-48

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the years ended December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars, except for per share information)

	2017			2016			2015
	$			$			$
Revenue
Gaming		383,069			248,049			225,382
Food and beverage		65,975			55,409			42,770
Hotel		13,501			12,492			11,478
Automated teller machines		10,667			8,332			6,840
Other		5,609			3,883			3,457
		478,821			328,165			289,927
Expenses (note 23)
Human resources		204,453			142,142			124,799
Operating		44,482			24,898			22,736
Marketing and promotion		23,092			24,485			22,280
Occupancy		35,017			17,587			14,065
Cost of food and beverage		31,828			22,718			18,366
Amortization of intangible assets		53,506			55,661			44,791
Depreciation of property and equipment		44,793			27,570			22,929
Writedown of non-financial assets (notes 10 and 11)		23,588			35			93
Other (note 17)		15,209			5,872			7,881
Share-based compensation (recovery) (note 15)		19,631			(3,111	)		5,410
		495,599			317,857			283,350
(Loss) income before other expenses (income) and income taxes		(16,778	)		10,308			6,577
Other expenses (income)
Interest expense (note 18)		59,566			35,477			34,212
Interest income		(679	)		(28	)		(29	)
Change in fair value of embedded derivatives (note 19)		(9,280	)		(700	)		700
Change in fair value of cross currency interest rate swaps (note 19)		31,991			—			—
Loss on debt extinguishment (note 14)		16,135			—			—
(Gain) loss on sale of property and equipment		(36	)		(2,201	)		416
Foreign exchange gain		(49,034	)		—			—
		48,663			32,548			35,299
Loss before income taxes		(65,441	)		(22,240	)		(28,722	)
Income tax (expense) recovery (note 16)
Current		(1,780	)		(45	)		—
Deferred		2,147			1,829			—
		367			1,784			—
Loss and comprehensive loss for the year		(65,074	)		(20,456	)		(28,722	)
(Loss) income and comprehensive (loss) income for the year attributable to
Shareholders of the Company		(65,084	)		(20,475	)		(28,722	)
Non-controlling interest		10			19			—
		(65,074	)		(20,456	)		(28,722	)
Loss per share (expressed in $ per share)
Basic and diluted		(1.65	)		(0.52	)		(0.73	)
Weighted average number of shares		39,394,121			39,385,175			39,376,299

The accompanying notes are an integral part of these consolidated financial statements.

F-49

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIENCY) EQUITY

For the years ended December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

	Attributable to shareholders of the Company
	Share capital (note 15)														Non- controlling interest
	Number(1)		Amount			Contributed surplus			Deficit			Total						Total
			$			$			$			$			$			$
Balance—December 31, 2014		39,372		346,959			5,519			(112,963	)		239,515			—			239,515
Issuance of share capital		9		102			—			—			102			—			102
Loss and comprehensive loss for the year ended December 31, 2015		—		—			—			(28,722	)		(28,722	)		—			(28,722	)
Share-based compensation		—		—			5,308			—			5,308			—			5,308
Non-controlling interest on acquisition of Playtime Group		—		—			—			—			—			2,220			2,220
Balance—December 31, 2015		39,381		347,061			10,827			(141,685	)		216,203			2,220			218,423
Issuance or authorization of share capital		9		102			—			—			102			—			102
(Loss) income and comprehensive (loss) income for the year ended December 31, 2016		—		—			—			(20,475	)		(20,475	)		19			(20,456	)
Share-based recovery		—		—			(3,213	)		—			(3,213	)		—			(3,213	)
Distributions to non-controlling interest		—		—			—			—			—			(68	)		(68	)
Balance—December 31, 2016		39,390		347,163			7,614			(162,160	)		192,617			2,171			194,788
Issuance or authorization of share capital		9		102			—			—			102			—			102
(Loss) income and comprehensive (loss) income for the year ended December 31, 2017		—		—			—			(65,084	)		(65,084	)		10			(65,074	)
Return of capital (note 15)		—		(191,680	)		—			—			(191,680	)		—			(191,680	)
Share-based compensation (note 15)		—		—			15,329			—			15,329			—			15,329
Cash settlement of share-based compensation (note 15)		—		—			(13,541	)		—			(13,541	)		—			(13,541	)
Distributions to non-controlling interest		—		—			—			—			—			(77	)		(77	)
Balance—December 31, 2017		39,399		155,585			9,402			(227,244	)		(62,257	)		2,104			(60,153	)

(1) presented in thousands of common shares

The accompanying notes are an integral part of these consolidated financial statements.

F-50

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

	2017			2016			2015
	$			$			$
Cash flows from operating activities
Loss for the year		(65,074	)		(20,456	)		(28,722	)
Items not affecting cash
Depreciation of property and equipment		44,793			27,570			22,929
Amortization of intangible assets		53,506			55,661			44,791
Amortization of deferred transaction costs and premium on long-term debt		2,956			2,742			2,559
Change in fair value of embedded derivatives		(9,280	)		(700	)		700
Change in fair value of cross currency interest rate swaps		27,765			—			—
Net interest expense		55,931			32,707			31,624
Loss on debt extinguishment		16,135			—			—
Writedown of non-financial assets (notes 10 and 11)		23,588			35			93
Share-based compensation (recovery)		19,631			(3,111	)		5,410
(Gain) loss on sale of property and equipment		(36	)		(2,201	)		416
Income tax recovery		(367	)		(1,784	)		—
Foreign exchange gain		(41,103	)		—			—
Lease termination costs		—			—			2,084
Change in deferred rent		1,504			—			—
Other		—			108			—
		129,949			90,571			81,884
Changes in non-cash working capital items (note 22)		(11,648	)		4,918			10,937
Cash settlement of share-based compensation		(12,055	)		—			—
Income tax paid		—			(45	)		—
Net cash generated from operating activities		106,246			95,444			92,821
Cash flows from investing activities
Gaming development costs and purchase of property and equipment		(75,285	)		(55,110	)		(48,489	)
Proceeds from sale of property and equipment		7,483			35,790			50
Purchase of intangible assets		(406	)		(410	)		(245	)
Acquisition of Ontario North and Southwest Gaming Bundles, net of cash acquired (note 3)		(144,703	)		—			—
Acquisition of Playtime Group, net of cash acquired (note 3)		—			—			(68,601	)
HST receivable resulting from acquisition of Ontario North and Southwest Gaming Bundles		(4,596	)		—			—
Interest received		679			28			30
Net cash used for investing activities		(216,828	)		(19,702	)		(117,255	)
Cash flows from financing activities
Debt financing transaction costs (note 14)		(27,872	)		(56	)		(788	)
Premium paid on redemption of 8.50% Notes		(8,500	)		—			—
Proceeds from long-term debt		949,088			—			50,000
Interest paid		(50,691	)		(34,005	)		(32,484	)
Repayment of long-term debt		(511,964	)		(25,410	)		(15,627	)
Net repayment of Revolving Credit Facility and Swingline Facility (note 14)		19,410			(8,000	)		32,090
Payment of deferred consideration		(7,200	)		(1,600	)		—
Distributions to non-controlling interest		(77	)		(68	)		—
Return of capital to shareholders of the Company		(191,680	)		—			—
Net cash generated from (used for) financing activities		170,514			(69,139	)		33,191
Increase in cash and cash equivalents		59,932			6,603			8,757
Cash and cash equivalents—Beginning of year		37,453			30,850			22,093
Cash and cash equivalents—End of year		97,385			37,453			30,850
Significant non-cash investing and financing transactions
Assumed debt on acquisition of gaming development costs and purchase of property and equipment		—			2,100			—

The accompanying notes are an integral part of these consolidated financial statements.

F-51

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

1     Formation and nature of operations

Gateway Casinos & Entertainment Limited (the “Company”) was incorporated on May 18, 2010 under the Canada Business Corporations Act (“CBCA”) and was inactive prior to September 16, 2010. On September 16, 2010, the Company acquired certain casino operations through participating in the restructuring (the “Restructuring”) of New World Gaming Partners Holdings British Columbia Ltd. (“New World”) pursuant to a Plan of Arrangement under the provision of the CBCA. The Company’s executive office is located at 4331 Dominion Street, Burnaby, British Columbia.

In May 2017, the Company signed two 20-year casino operating and service agreements (“COSAs”) with the Ontario Lottery and Gaming Corporation (“OLG”) to operate gaming facilities in the OLG’s Gaming Bundle 3 (North) (the “North Gaming Bundle”) and Gaming Bundle 4 (Southwest) (the “Southwest Gaming Bundle”). Under the terms of the transition and asset purchase agreements (“TAPAs”), signed on December 12, 2016, relating to each bundle, the Company acquired the OLG’s gaming assets for two gaming bundles that included nine casinos and two new planned builds. See note 3.

The Company operates gaming, entertainment, and hospitality facilities in British Columbia, Alberta and Ontario. As at December 31, 2017, the Company’s 26 gaming properties consisted of the following:

Casinos in Greater Vancouver, British Columbia

• Grand Villa Casino Burnaby, Hotel and Convention Centre (“Grand Villa Burnaby”)

• Starlight Casino New Westminster (“Starlight New Westminster”)

• Cascades Casino Langley, Hotel and Convention Centre (“Cascades Langley”)

Casinos in the Thompson-Okanagan region of British Columbia

• Cascades Casino Kamloops (“Cascades Kamloops”)

• Lake City Casino Kelowna (“Lake City Kelowna”)

• Cascades Casino Penticton (“Cascades Penticton”)

• Lake City Casino Vernon (“Lake City Vernon”)

Casinos in Edmonton, Alberta

• Grand Villa Casino Edmonton (“Grand Villa Edmonton”)

• Palace Casino Edmonton (“Palace Edmonton”)

Community Gaming Centres (including bingo halls) in British Columbia

• Chances Mission (“Mission”)

• Chances Playtime Abbotsford (“Abbotsford”)

• Chances Playtime Campbell River (“Campbell River”)

• Chances Playtime Courtenay (“Courtenay”)

• Chances Squamish (“Squamish”)

• Newton Bingo Country (“Newton”) (bingo hall)

F-52

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

• Playtime Gaming Langley (“Langley”) (bingo hall) (closed February 21, 2018)

• Playtime Gaming Victoria (“Victoria”) (bingo hall)

Casinos in Ontario

• Western Fair District (“London”)

• Point Edward (“Point Edward”)

• Woodstock (“Woodstock”)

• Dresden (“Dresden”)

• Clinton (“Clinton”)

• Hanover (“Hanover”)

• Thunder Bay (“Thunder Bay”)

• Sault Ste. Marie (“Sault Ste. Marie”)

• Sudbury (“Sudbury”)

The Company’s revenue is primarily earned from gaming revenues for providing operational services after deducting for the portion of gaming revenues payable to the British Columbia Lottery Corporation (“BCLC”), the Alberta Gaming and Liquor Commission (“AGLC”) and the OLG, with additional revenue generated from non-gaming revenues which include associated hotels and convention centres, restaurants, bars and live entertainment venues. The BCLC, British Columbia Gaming Policy and Enforcement Branch (“GPEB”), AGLC, OLG and Alcohol and Gaming Commission of Ontario (“AGCO”) are responsible for managing and conducting or regulating gaming activities in the regions in which the Company operates. The operating agreements related to the Company’s casinos and community gaming centres provide that the applicable governing body may suspend or terminate the rights of the Company to provide services under the agreements for certain specified reasons. The future operations of the casinos and community gaming centres depend upon the continued compliance with the operating agreements.

2    Basis of preparation

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements were approved by the Board of Directors for issue on December 18, 2018.

3    Acquisitions

The Company accounted for the acquisitions below using the acquisition method in accordance with IFRS 3, Business Combinations, and the assets and liabilities acquired have been consolidated into these consolidated financial statements.

F-53

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

a) Ontario Southwest Gaming Bundle

On May 9, 2017, the Company signed a 20-year COSA with the OLG. Under the Southwest Gaming Bundle TAPA, the Company 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 non-cash working capital of $775 comprised of prepaids, inventory and accrued liabilities. The Company also incurred transaction costs of $3,185, of which $2,219 was incurred in 2017, $600 was incurred in 2016, $193 was incurred in 2015 and the remainder was incurred in previous years. In addition to the consideration paid, $2,882 was paid and was refunded to the Company through an input tax credit subsequent to year-end.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on May 9, 2017:

	$
Cash and cash equivalents		19,382
Non-cash working capital		775
Property and equipment		61,879
Intangible assets		13,388
		95,424

The fair value of the consideration is equal to $95,424.

The revenue and net income before tax of the Southwest Gaming Bundle from the acquisition date, May 9, 2017, to December 31, 2017 was $86,138 and $26,495, respectively.

Consolidating the Southwest Gaming Bundle’s statement of operations and comprehensive income from January 1, 2017 would have resulted in incremental revenue of approximately $45,736 (unaudited) and incremental net income of $12,816 (unaudited).

b) Ontario North Gaming Bundle

On May 30, 2017, the Company signed a 20-year COSA with the OLG. Under the North Gaming Bundle TAPA, the Company 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 non-cash working capital of $(424) comprised of prepaids, inventory and accrued liabilities. The Company also incurred transaction costs of $3,475, of which $2,553 was incurred in 2017, $521 was incurred in 2016, $183 was incurred in 2015 and the remainder was incurred in previous years. In addition to the consideration paid, $1,714 was paid and was refunded to the Company through an input tax credit subsequent to year-end.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on May 30, 2017:

	$
Cash and cash equivalents		10,688
Non-cash working capital		(424	)
Property and equipment		55,076
Intangible assets		14,009
		79,349

F-54

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The fair value of the consideration is equal to $79,349.

The revenue and net income before tax of the North Gaming Bundle from the acquisition date, May 30, 2017, to December 31, 2017 was $46,584 and $8,347, respectively.

Consolidating the North Gaming Bundle’s statement of operations and comprehensive income from January 1, 2017 would have resulted in incremental revenue of approximately $31,532 (unaudited) and incremental net income of $3,924 (unaudited).

c) Playtime Group

On December 23, 2015, the Company acquired all the outstanding shares of Playtime Community Gaming Centres Inc., Playtime Peardonville Ventures Ltd. (BC), K&T Properties #2 Ltd. (BC), K&T Properties Ltd. (BC), PT Courtenay Enterprises Ltd., R&E Projects Ltd., Dominion Catering Ltd., PT Abbotsford Enterprises Ltd. (BC), 69.3% of the shares of Abby Properties Ltd. (BC) and 69.3% of the Abby Joint Venture (collectively, the “Playtime Group”). On January 22, 2016, the Company amalgamated all outstanding shares of subsidiaries within the Playtime Group to form a single legal entity named Playtime Gaming Group Inc. This acquisition includes the Abbotsford, Campbell River, Courtenay, Langley, Penticton (closed March 4, 2017) and Victoria Community Gaming Centres.

The total purchase price of $82,002 consisted of $71,602 paid in cash and $10,400 in deferred consideration. Additionally, the Company incurred and the assets and liabilities acquired have been consolidated into these financial statements.

Total consideration for the acquisition is as follows:

	$
Cash		71,602
Deferred consideration payable		10,400
		82,002

The following table summarizes the fair values of the identifiable assets and liabilities:

	$
Cash and cash equivalents		3,001
Non-cash working capital		(1,639	)
Property and equipment		36,699
Intangible assets		56,458
Goodwill		8,505
Deferred income tax liability		(18,802	)
Non-controlling interest		(2,220	)
		82,002

The fair value of the consideration is equal to $82,002.

The fair value of acquired amounts receivable is $45. This amount is expected to be fully collected.

Included within the purchase price is $4,500 related to holdback payments for potential tax liabilities of the Playtime Group, and $4,400 of this amount is included within deferred consideration payable as at the acquisition

F-55

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

date. In the event that the ultimate tax liability is less than this holdback amount, the difference would be paid to the vendor group. Alternatively, the Company would be responsible for any amount should the tax liability be greater than this holdback amount. The remaining deferred consideration balance of $6,000 as at the acquisition date related to holdback payments pertaining to real estate assets that the Company considers to be redundant to the operations of the Playtime Group.

The goodwill balance of $8,505 arose from the recognition of the deferred income tax liability.

The Company recognized the non-controlling interest at the fair value of the non-controlling interest’s share of the Abby Joint Venture.

The Playtime Group’s contribution to the consolidated statement of operations and comprehensive loss for the year ended December 31, 2015 was not a material amount due to the fact that the acquisition occurred close to year-end.

Consolidating the Playtime Group’s operations from January 1, 2015 would have resulted in incremental revenue of approximately $17,500 and incremental comprehensive income of approximately $350 for the year ended December 31, 2015.

4     Significant accounting policies

The significant accounting policies used in the preparation of these consolidated financial statements are as follows:

Basis of measurement

The consolidated financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative instruments which are measured at fair value.

Consolidation

The Company consolidates investees when it controls the investee; that is, when it is exposed to or has rights to the variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Power often arises through voting or similar rights. Subsidiaries can also include structured entities which an entity has power over and which have been designed such that voting or similar rights are not the dominant factor in deciding which entity has control over the investee.

7588674 Canada Inc. (“7588674”) (formerly New World) met the definition of a structured entity that the Company has power over and, accordingly, it was consolidated. On October 18, 2017, the Company entered into a Share Purchase Agreement and purchased 100% of the issued and outstanding shares of 7588674. 7588674 is an inactive company with no employees. As a result, 7588674 is also controlled through voting rights by the Company and continues to be consolidated. 7588674 holds title to most of the Company’s real estate, as nominee and bare trustee for and on behalf of the Company, and owes US$230,433 to the Company, which is non-interest bearing and payable on demand and which is eliminated upon consolidation.

The Company’s other subsidiaries which are controlled through voting rights are 427967 B.C. Ltd., Newton Square Properties Ltd., Boardwalk Gaming Squamish Inc., South Surrey Projects Inc., 0998282 B.C. Ltd., Gateway Casinos & Entertainment Ontario Limited, Playtime Gaming Group Inc. (which holds 69.3% of Abby Properties Ltd. (British Columbia)) and 1101222 B.C. Ltd.

F-56

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

In 2016, the Company completed a transaction to wind-up 0854559 B.C. Ltd. and South Surrey Limited Partnership and created a new entity named 1101222 B.C. Ltd.

On June 26, 2017, South Surrey Projects Inc. was dissolved.

On July 1, 2017, the Company assigned the assets and liabilities of Newton Square Properties Ltd. to 427967 B.C. Ltd. and dissolved Newton Square Properties Ltd. 427967 B.C. Ltd., Boardwalk Gaming Squamish Inc. and 1101222 B.C. Ltd. were amalgamated into the Company.

On December 12, 2017, 1144801 B.C. Ltd., 1144803 B.C. Ltd, 1144808 B.C. Ltd. and 1144809 B.C. Ltd. were incorporated under the Business Corporations Act (British Columbia) and are inactive companies with no employees. They each hold title to the leasehold interests as nominee and bare trustee of the Fraser Highway property in Langley, Cascades Langley, Grand Villa Burnaby and Starlight New Westminster, respectively.

Business combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at 100% of their fair values at the acquisition date. The acquisition date is the date at which the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred to the Company, and the liabilities, including contingent or deferred consideration, incurred and payable by the Company to former owners of the acquiree. Acquisition-related costs, other than costs to issue debt or equity securities of the acquirer, are expensed as incurred. The costs to issue equity securities of the Company as consideration for the acquisition are reduced from share capital as share issue costs.

Non-controlling interests are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition.

The excess of (i) total consideration transferred by the Company, measured at fair value, including contingent or deferred consideration, and (ii) the non-controlling interests in the acquiree, over the fair value of net assets acquired, is recorded as goodwill.

Site pre-opening costs

Costs incurred that are related to the opening of a new or relocated facility are expensed in the period in which they are incurred and are classified as site pre-opening costs. Significant categories of these expenses include employee training, marketing and promotion, raw materials and consumables, information and technology, rent and travel.

Business acquisition costs

Costs incurred that are related to business development opportunities and the acquisitions of new businesses and transition costs incurred as the result of acquisitions of new businesses are expensed in the period in which they are incurred and are classified as business acquisition costs.

F-57

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Revenue recognition

Gaming revenues consist of the Company’s share of the gaming win from table games, slot machines, bingo and other electronic games pursuant to its operating agreements with the BCLC, OLG and the AGLC and are recognized daily based on the gaming win at each of the Company’s casinos and community gaming centres. Revenues from automated teller machines (“ATMs”), food and beverage and hotel operations, and other revenue sources are recognized as the related goods and services are provided or sold.

The Company satisfies its performance obligations under its contracts as services are rendered under the term of the contracts with provincial gaming corporations. Revenue, net of amounts paid to the BC and Alberta provincial gaming corporation for free play and customer loyalty programs and table gaming supply charge payments are recognized on a daily basis and amounts owing from the BCLC and/or AGLC are considered amounts receivable. Revenue, net of amounts paid to the OLG for free play and customer loyalty programs are separated into fixed and variable consideration. The fixed consideration is recognized as services are rendered under the term of the contract and amounts owing from the OLG are considered amounts receivable. The variable consideration is recognized as services are rendered under the term of the contract based on the most likely amount, however amounts owing from the OLG are considered contractual assets until the predefined annual minimum guarantee threshold is exceeded. PCE renumeration is earned when the Company incurs eligible costs up to the maximum annual threshold and recognized over time on a straight-line basis as the performance obligation is satisfied. Amounts received from the OLG in excess of the revenue to be recognized on a straight-line basis is presented as deferred revenue and netted against any contractual assets with the OLG.

Facility development commissions

Facility development commissions (“FDC”) are a compensation component of the Company’s Amended and Restated Multiple Casino Operational Services Agreement (“MCOSA”), Operational Service Agreements (“OSAs”) and Bingo Operational Service Agreements (“BOSAs”). FDC is recorded as part of gaming revenue on the consolidated statement of operations and comprehensive loss when earned, limited to the extent that sufficient Approved Amounts (a defined term in the MCOSA, OSAs and BOSAs), which generally consist of approved capital and operating expenditures related to the development or improvement of gaming properties, have previously been incurred by the Company.

FDC is earned by the Company as a fixed percentage (3%) of the gross gaming win at its British Columbia casinos and a fixed percentage (3%—5%) of the gross gaming win at its British Columbia community gaming centres. Approved Amounts are reduced by the FDC receipts. The BCLC provides for an additional accelerated FDC reimbursement as a fixed percentage (2%) of the gross gaming win that is intended to be a one-time reimbursement of the timely development or redevelopment of gaming facilities and additional entertainment amenities of significant value which may be completed through phases. The BCLC considers accelerated FDC submissions for approval on a project-by-project basis.

Permitted capital expenditures

In Ontario, the Company is entitled to remuneration from the OLG up to a predefined annual amount per gaming property in each operating year for Permitted Capital Expenditures (“PCE”), a term defined in the Company’s COSAs with the OLG. The Company becomes entitled to payment on a quarterly basis, subject to expenditures being incurred and PCE reports submitted. PCE approved by the OLG can be carried forward for up to four years. PCE incurred in excess of the current annual amount represents variable consideration that has

F-58

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

been recorded in the consolidated balance sheet as deferred revenue. For accounting purposes, PCE remuneration is recorded as part of gaming revenues in the consolidated statement of operations and comprehensive loss when the Company is entitled to payment to the extent the renumeration does not exceed the pro-rata share of the annual amount. Under IFRS 15 PCE is part of a combined performance obligation which is satisfied over each operating year and revenue is recognized over time by measuring the progress towards complete satisfaction of the performance obligation. As a result of the retrospective adoption of IFRS 15, the Company adjusted total deficiency as at December 31, 2017 by $1,726 and will record this as revenue during the quarter ended March 31, 2018.

Free play and customer loyalty programs

Prior to the retrospective adoption of IFRS 15, free play issued to customers was recorded as part of marketing and promotion expenses in the consolidated statement of operations and comprehensive income (loss). Under IFRS 15, as a result of the contractual arrangement between the Company and the applicable provincial gaming corporation, the costs of free play since a modification effective April 1, 2017 are netted against gaming revenue as it was determined that these amounts do not pertain to a distinct good or service but instead are part of the Company’s performance obligation to the applicable provincial gaming corporation.

The Company has various customer loyalty programs in each provincial jurisdiction where it operates. Prior to the retrospective adoption of IFRS 15, customer loyalty programs were recorded as part of marketing and promotion expenses. Under IFRS 15, the loyalty points earned by customers are ascribed a value and recognized in revenue when the rewards are earned or redeemed or expire, as appropriate. Previously, the loyalty points were recognized as part of marketing expense when earned or redeemed or expired.

Table gaming supply charge payments

Prior to the retrospective adoption of IFRS 15, the table gaming supply charge payments to the BCLC were part of operating expenses in the consolidated statement of operations and comprehensive income (loss). Under IFRS 15, the table gaming supply charge payments to the BCLC are now netted against gaming revenue as it was determined that the payments to the BCLC are not for a distinct good or service and are related to the performance obligation to the BCLC.

Leases

Leases are classified as either finance or operating. Leases that transfer substantially all of the benefits and risks of ownership of property to the Company are accounted for as finance leases. Property acquired under finance leases is recorded as an asset in the consolidated balance sheet with a corresponding increase to the finance lease obligation. The asset is depreciated over the life of the lease.

Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to operations on a straight-line basis over the term of the lease. The benefits of lease inducements provided to the Company are recognized on a straight-line basis over the term of the operating lease agreement.

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments with a maturity, at the date of purchase, of three months or less. Cash floats represent cash on hand at the Company’s casinos and community gaming centres.

F-59

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Inventory

Food and beverage inventory is valued at the lower of cost and the net realizable value. Cost is determined using the first-in, first-out method. Net realizable value is the estimated selling price less applicable selling expense.

Property and equipment

Property and equipment are recorded at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset. Land is not depreciated. Depreciation on other property and equipment is provided for over the estimated useful lives on a straight-line basis as follows:

Buildings	5—50 years
Furniture and fixtures	5—16 years
Computer hardware	1—3 years
Equipment	1—30 years
Leasehold improvements	term of the related lease

The Company allocates the amounts initially recognized in respect of an item of property and equipment to its significant components and depreciates each component separately.

Gaming development costs include expenditures incurred in connection with the development of new gaming and related facilities and the redevelopment of existing gaming facilities, including direct construction and development costs, and interest directly attributable to the development activities. When a new gaming facility is substantially complete and ready for use, development costs are transferred to the respective asset categories of property and equipment and depreciated over the assets’ estimated useful lives.

The depreciation method and useful life of property and equipment are assessed at least annually.

Borrowing costs attributable to the construction of property and equipment are added to the costs of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as interest expense in the consolidated statement of operations and comprehensive loss using the effective interest method.

Assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. The value of such assets held for sale is measured at the lower of their carrying amount and fair value less costs to sell. Assets held for sale (including those that are part of a disposal group) are not depreciated or amortized. Assets held for sale are presented separately in the consolidated balance sheet under current assets.

F-60

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Intangible assets

Intangible assets consist of gaming operating agreements, above-market and below-market lease agreements, software and a Racebook license, which are recorded at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

British Columbia MCOSA and OSAs	operating term as provided in the MCOSA and OSAs plus one 10-year extension if available(i)
British Columbia BOSAs	operating term as provided in the BOSAs plus one 5-year extension if available(i)
Alberta Casino Facility Licenses	20 years, commencing September 16, 2010
Above/below market lease agreements	term of related lease
Ontario COSAs	operating term as provided in the COSAs
Software	1—3 years
Racebook license	term of license

(i) The portion of the MCOSA, OSAs and BOSAs that relates to Approved Amounts of FDC is treated as a separate component and is amortized on an accelerated basis between four and eight years.

Goodwill

Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the tangible and intangible net assets at the date acquired, and is allocated to the cash generating unit (“CGU”) expected to benefit from the acquisition. A CGU is the smallest group of assets for which there are separately identifiable cash flows.

Goodwill is not amortized but is assessed for impairment at least annually and whenever events or circumstances indicate that its carrying value may not be fully recoverable. The impairment test requires comparing the carrying values of the Company’s CGUs, including goodwill, to their recoverable amounts. The Company determines the recoverable amounts using estimated future cash flows discounted at an after-tax rate that reflects the risk adjusted weighted average cost of capital. Any excess of the carrying value of a CGU over the recoverable amount is expensed in the period the impairment is identified. An impairment loss recorded for goodwill is not reversed in a subsequent period.

Upon disposal of a business, any related goodwill is included in the determination of gain or loss on disposal.

Impairment of non-financial assets

Property and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Corporate assets are allocated to the respective CGUs where an allocation can be done on a reasonable basis.

F-61

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Share capital

Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.

Earnings per share

Basic earnings per share (“EPS”) is calculated by dividing the income (loss) for the year attributable to equity owners of the Company by the weighted average number of common shares outstanding during the year.

Diluted EPS is calculated by adjusting the weighted average number of common shares outstanding for dilutive instruments. The Company does not have any dilutive instruments.

Contingently issuable common shares for share-based payments with performance conditions are treated as outstanding and included in the calculation of diluted EPS, from the beginning of the year or the date of the contingent share agreement, only if the performance conditions have been met.

Share-based compensation

The Company provides certain executives with equity settled share-based compensation awards. The cost of these share-based compensation awards is recognized as an expense as the executives provide services to the Company with a corresponding increase in contributed surplus in equity or accounts payable and accrued liabilities. The cost of the share-based payments is measured by reference to the fair value of the awards at the grant date.

The total cost is recognized over the vesting period, which may be fixed or variable, based on the number of awards expected to vest. At the end of each reporting period, the Company revises, if necessary, its estimates of the service period and the number of awards that are expected to vest based on its best estimate of the most likely outcomes and recognizes the impact of the revisions to its estimates, if any, in the consolidated statement of operations and comprehensive loss.

When the vesting conditions are met, the Company issues new shares from treasury.

Marketing fund

Under the MCOSA, the Company is required to pay the BCLC an amount for BCLC marketing programs related to the operations of the Grand Villa Burnaby, Cascades Langley and Starlight New Westminster Casinos equal to 0.6% of the gross gaming win from the casinos. These amounts are treated as an expense in the period incurred.

Income taxes

Income tax comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous periods.

Deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted or substantively enacted tax rates

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GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

and laws that will be in effect when the differences are expected to reverse. The effect on deferred income tax assets and liabilities of a change in tax rates is included in income in the period in which the change is enacted or substantively enacted. Deferred income tax assets are recognized only to the extent that, in the opinion of management, it is probable that the assets will be realized.

The Company has estimated the income tax (expense) recovery in accordance with its interpretation of the various income tax laws and regulations. It is possible, due to the complexity inherent in estimating income tax provisions, that the amount of the (expense) recovery recognized in the consolidated financial statements could change.

Deferred income tax assets and liabilities are presented as non-current.

Foreign currency translation

The Canadian dollar is the functional and reporting currency of the Company and its subsidiaries. Transactions completed in foreign currencies are translated into Canadian dollars at the exchange rates prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies are reflected in the consolidated financial statements at the exchange rates prevailing at the balance sheet date, with the resulting gain or loss included in the consolidated statement of operations and comprehensive loss in the year in which it occurs.

Operating segments

The internal reporting provided to the Chief Executive Officer (“CEO”), the Company’s chief operating decision maker, comprises the following operating segments: Grand Villa Burnaby, Starlight New Westminster, Cascades Langley, Cascades Kamloops, Lake City Kelowna, Cascades Penticton, Lake City Vernon, Grand Villa Edmonton, Palace Edmonton, Community Gaming Centres (Mission, Abbotsford, Campbell River, Courtenay, Squamish, Newton, Langley and Victoria), Southwest Gaming Bundle (London, Point Edward, Woodstock, Dresden, Clinton and Hanover), North Gaming Bundle (Thunder Bay, Sault Ste. Marie and Sudbury) and Corporate. Based on the aggregation criteria in IFRS 8, Operating Segments, the four casinos in the Thompson-Okanagan (Cascades Kamloops, Lake City Kelowna, Cascades Penticton and Lake City Vernon) are treated as one reporting segment (“Thompson-Okanagan”), the two Edmonton casinos (Grand Villa Edmonton and Palace Edmonton) are treated as one reporting segment (“Edmonton”) and the Southwest and North Gaming Bundles (London, Point Edward, Woodstock, Dresden, Clinton, Hanover, Thunder Bay, Sault Ste. Marie and Sudbury) are treated as one reporting segment (“Ontario”) because they share similar economic characteristics, types of customers, types of services and products provided, regulatory environments, and management and reporting structures.

Impairment of financial assets

At each reporting date, the Company assesses whether there is objective evidence that loans and receivables are impaired.

If such objective evidence of impairment is identified, and the loss event has an impact on the cash flows, the amount of the impairment is estimated as the difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.

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GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized.

Transaction costs and debt premiums or discounts

Transaction costs related to debt financing and debt premiums or discounts are deferred and amortized over the estimated term of the related financial liability using the effective interest method. Transaction costs on revolving credit facilities are initially deferred and recognized as interest expense using the effective interest method when the facility is drawn upon to the extent that a draw down of the facility is probable. Transaction costs on credit facilities that represent a prepayment for liquidity services are amortized over the term of the facility. Transaction costs incurred in connection with a business combination are expensed as incurred in the consolidated statement of operations and comprehensive loss.

Embedded derivatives

Derivatives embedded in other financial instruments, such as a prepayment option on long-term debt, or other executory contracts are accounted for as separate derivatives when their risks and characteristics are not closely related to their host financial instrument or contract.

Provisions

Provisions represent liabilities of the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at management’s best estimate of the present value of the expected expenditures required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in provisions due to the passage of time is recognized in interest expense in the consolidated statement of operations and comprehensive loss.

New accounting standards adopted

Effective January 1, 2017, IAS 7, Statement of Cash Flows, introduced new requirements to disclose changes in liabilities arising from financing activities, including changes arising from cash flows and non-cash changes. The required disclosures have been added to note 14 of these consolidated financial statements.

The Company adopted the following new accounting standards effective January 1, 2018 on a retrospective basis.

(a) IFRS 9—Financial Instruments

(i) IFRS 9—Financial Instruments—Impact of adoption

IFRS 9, Financial Instruments, addressed revised guidance on the classification and measurement of financial instruments and replaced guidance in IAS 39, Financial Instruments: Recognition and Measurement. The Company adopted IFRS 9 on a retrospective basis without restatement of comparative periods. Upon adoption, the Company reclassified its financial instruments as summarized

F-64

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

below. The new standard also includes a new expected credit loss model for calculating impairment on financial statements. Due to the nature of the Company’s business, this change did not have a material impact on the consolidated financial statements. Management completed its assessment of the new standard and concluded that the standard does not have a material impact on the Company’s consolidated financial statements.

The following table summarizes the classification impacts upon adoption of IFRS 9. The adoption of the new classification requirements under IFRS 9 did not result in a material change in measurement or the carrying amount of financial assets and liabilities.

	Classification
Financial instruments	IAS 39		IFRS 9
Cash and cash equivalents		Loans and receivables		Amortized cost
Amounts receivable		Loans and receivables		Amortized cost
Derivative financial instruments (other assets)		FVTPL		FVTPL
Derivative financial instruments (other liabilities)		FVTPL		FVTPL
Gaming revenue payable to BCLC, AGLC and OLG		Amortized cost		Amortized cost
Accounts payable and accrued liabilities		Amortized cost		Amortized cost
Deferred consideration payable		Amortized cost		Amortized cost
Long-term debt		Amortized cost		Amortized cost

(ii) IFRS 9—Financial Instruments—Accounting policies applied from January 1, 2018

The classification and related measurement of the Company’s significant financial instruments are as follows:

Amortized cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from those financial assets is included in interest income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented as a separate line item, together with foreign exchange gains and losses. Impairment losses, if material, are presented as a separate line item in the consolidated statement of operations and comprehensive income (loss).

Fair value through profit or loss

Financial instruments are classified as fair value through profit or loss (“FVTPL”) if they are acquired principally for sale or repurchase in the near term or if they fail the solely payments of principal and interest (SPPI) test in accordance with IFRS 9. Derivatives are required to be included in this category unless they are designated as hedges. Embedded derivatives that are not closely related to the host instrument are also classified as FVTPL.

Financial instruments in this category are measured at fair value with the changes in fair value recognized immediately in the consolidated statement of operations and comprehensive income (loss).

Recognition and presentation

Financial instruments are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the

F-65

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

assets have expired or have been transferred and the Company has transferred substantially all of the risks and rewards of ownership.

Financial assets and liabilities are offset and the net amount reported in the condensed consolidated interim balance sheet when there is a legally enforceable right to offset amounts and the intention is to settle on a net basis, or realize the asset and settle the liability simultaneously.

Financial instruments are initially recognized in the consolidated balance sheet at fair value. Subsequent measurement depends on management’s classification of the financial instrument. The classification of financial instruments depends on the nature and purpose of the financial instruments, management’s choice and, in some circumstances, management’s intentions.

Swaps, forward contracts and embedded derivatives

The Company uses derivative financial instruments to manage foreign currency and interest rate exposures. These financial instruments are entered into solely for hedging purposes and are not used for speculative purposes. The Company does not apply hedge accounting. All derivative financial instruments are recognized in the consolidated balance sheet at their estimated fair value.

Cross currency interest rate swap (“CCIRS”) contracts are periodically used to manage currency and interest rate exposure on US dollar denominated long-term debt. The CCIRS contracts require the periodic exchange of payments with the exchange at maturity of notional principal amounts on which the payments are based. Changes in the fair value of the CCIRS contracts are recognized in change in fair value of cross currency interest rate swaps in the consolidated statement of operations and comprehensive income (loss).

Foreign currency forward contracts are periodically used to manage foreign currency cash requirements. The foreign currency forward contracts involve the purchase or sale of an agreed upon amount of US dollars at a specified future date at forward exchange rates. Changes in the fair value of foreign currency forward contracts are recognized in change in fair value of derivative financial instruments in the consolidated statement of operations and comprehensive income (loss).

Derivatives embedded in other financial liabilities, such as a prepayment option on long-term debt, or other executory contracts are accounted for as separate derivatives when their risks and characteristics are not closely related to their host financial instrument or contract. Changes in the fair value of embedded derivatives are recognized within change in fair value of embedded derivatives in the consolidated statement of operations and comprehensive income (loss).

(b) IFRS 15—Revenue from Contracts with Customers

(i) IFRS 15—Revenue from Contracts with Customers—Impact of adoption

IFRS 15, Revenue from Contracts with Customers, deals with revenue recognition and establishes principles for reporting useful information to users of the financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard introduces a single, principles-based, five-step model to be applied to all contracts with customers. The standard provides guidance on timing of revenue recognition, including accounting for variable consideration, costs of fulfilling and obtaining a contract and various other matters. New disclosures in respect of revenue are also introduced. The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.

F-66

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The Company adopted IFRS 15 using the full retrospective method on January 1, 2018, which resulted in changes in accounting policies and adjustments to the amounts recognized in the consolidated financial statements and previous periods. The adoption of IFRS 15 had no impact on the consolidated balance sheet as at January 1, 2016 and January 1, 2015.

Adoption of IFRS 15 using the full retrospective method resulted in the following adjustment:

					IFRS 15
	December 31, 2017		Adjustment		carrying amount December 31, 2017
	$		$		$
Deferred revenue		—		1,726		1,726

The impact on the Company’s deficit as at December 31, 2017 is as follows:

	$
Deficit		(225,518	)
Adjustment to gaming revenue		(1,726	)
Deficit—December 31, 2017—IFRS 15		(227,244	)

The above impact relates to a change in timing of revenue recognition for permitted capital expenditure which the Company is entitled to under the COSAs with the OLG entered into in May 2017.

The Company applied the full retrospective method when adopting the standard, in order to better compare reported revenue between periods. FDC and PCE of $41,218, $32,620 and $28,385, for the year ended December 31, 2017, 2016 and 2015, respectively, previously presented separately, has been included in gaming revenue. Customer loyalty points and free play promotional allowance of $16,329 for the year ended December 31, 2017, previously presented as part of marketing and promotion expenses and operating expenses has been netted against gaming revenue. Customer loyalty points of $4,236 and $4,129, for the year ended December 31, 2016 and 2015, respectively, previously presented as part of marketing and promotions expenses has been netted against gaming revenue. Table gaming supply charge of $1,475, $1,474 and $1,495, for the year ended December 31, 2017, 2016 and 2015, respectively, previously presented as part of operating expenses, has been netted against gaming revenue.

The above adjustments are reflected in note 23 and note 26.

Accounting requirements issued but not yet applied

At December 31, 2017, a number of standards and interpretations, and amendments thereto, had been issued by the IASB which are not effective for these consolidated financial statements. A summary of those standards, interpretations and amendments which may be relevant to the Company are set out below:

IFRS 16, Leases, specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. IFRS 16 will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted.

The Company has started the assessment of the impact of adoption of the new standard on the consolidated financial statements. It is anticipated that there will be a material impact as a result of the recognition of a right of

F-67

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

use asset and a lease liability for leases which are currently treated as operating leases by the Company. The Company does not intend to adopt the new standard prior to the mandatory effective date.

5    Critical accounting estimates, assumptions and judgments

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management’s estimates, assumptions and judgments are based on historical experience and other factors considered to be reasonable, including expectations of future events.

Estimates and assumptions that could result in a material effect in the next financial year on carrying amounts of assets and liabilities are outlined below:

a) Impairment of non-financial assets

The determination of a long-lived asset impairment requires significant estimates and assumptions to determine the recoverable amount of a CGU, the recoverable amount used by the Company being the higher of fair value less costs of disposal (“FVLCOD”) and value in use (“VIU”). The FVLCOD and VIU methods involve estimating the net present value of future cash flows derived from the use of the CGU, discounted at an appropriate rate.

In the event an impairment analysis is required, the key assumptions that would be utilized in the determination of future cash flows would represent management’s best estimate of the range of economic conditions relating to the CGU, and would be based on historical experience, economic trends, and communication with other key stakeholders of the Company. These key assumptions would include the revenue growth rate, margin as a percentage of revenues, capital expenditures, the inflation growth rate and the discount rate. Significant changes in the key assumptions that would be utilized in the determination of future cash flows could result in an impairment loss or reversal of a previously recognized impairment loss.

b) Estimated useful lives of non-financial assets

Judgment is used to estimate each component of a tangible and intangible asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and, in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives change, this could result in an increase or decrease in the annual amortization and depreciation expense, and future impairment charges.

c) Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the consolidated financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and

F-68

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Company’s future financial results.

Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Company’s interpretations of income tax legislation, will result in adjustments to the expectations of future timing difference reversals and may require material deferred tax adjustments.

The Company’s operations are conducted in jurisdictions with complex tax laws and regulations that can require significant interpretation. As such is the case, the Company and the tax authorities could disagree on tax filing positions and any reassessment of the Company’s filings could result in material adjustments to tax expense, taxes payable and deferred income taxes.

d) Fair value of long-term debt

The Company makes estimates and assumptions relating to fair value disclosure of the long-term debt. The critical assumptions underlying the fair value disclosure include the credit spread. The Company reviews various comparable debt securities and determines a reasonable credit spread applicable to the debt securities. See note 19.

e) Fair value of embedded derivatives

The Company is required to determine the fair value of embedded derivatives, such as prepayment options, separate from its long-term debt. Fair values for embedded derivatives are determined using valuation techniques and require estimates of redemption dates and forward interest rates existing at the balance sheet date as the financial instruments are not traded in an active market.

f) Fair value of derivative financial instruments

The estimated fair value of derivative financial instruments has been determined based on appropriate valuation methodologies and/or third party indications. Fair values determined using valuation models require the use of assumptions concerning the amount and timing of future cash flows, discount rates, credit risk and probability of future events that are beyond management’s control. In determining these assumptions, the Company relied on external, readily observable quoted market inputs, where available, including Canadian and United States forward interest rate yield curves, and Canadian and United States foreign exchange rates, discounted to a present value as appropriate. See note 19.

g) Share-based compensation

Share-based compensation provided to executives takes into account the number of shares expected to vest based on an estimate of the most likely possible outcome of a sale of some or all common shares by the existing shareholders and the possible service periods of the officers. The calculation also incorporates a per share fair value, based on the most recent share issuance.

It is reasonably possible that future estimates or the actual outcomes and timing of a liquidity event may be different from the assumptions used in the preparation of these consolidated financial statements and a material change in the share-based compensation reflected in the consolidated statement of operations and comprehensive loss may occur. The range of possible outcomes is dependent on the interaction of multiple factors.

F-69

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Judgments that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements are outlined below:

a) Segment reporting

The Company has aggregated its operating segments into reportable segments based on an assessment that each operating segment has similar economic characteristics, types of customers, types of services and products provided, regulatory environments, and management and reporting structures.

b) Leases

The Company has classified its leases as finance or operating based on assessments that the definition of a lease arrangement was met, the lease terms could be estimated with certainty and the discount rate used was reasonable.

c) Revenue recognition

The application of IFRS 15 requires the Company to make a number of judgments, including the determination of the nature of its performance obligations under its contracts, the assessment of the amount it expects to be entitled for, the timing of recognition and the allocation of the transaction price to loyalty programs. The Company concluded that its services are as an operator since the signed and executed contracts are between the Company and the provincial corporations in performing obligations over the term of the contracts. Consequently, revenue is recognized net of amounts paid to the provincial corporations for free play and customer loyalty programs and table gaming supply charge payments.

With the expectation the Company will incur eligible costs that can be claimed under PCE up to the maximum annual threshold, the Company has taken the approach of recognizing PCE remuneration on a straight-line basis over the course of its fiscal year.

6    Trust funds and liabilities

Cash floats

Under the terms of the MCOSA, OSAs and BOSAs, cash floats of $17,854 were provided as at December 31, 2017 (2016—$17,356) by the BCLC for the casinos and community gaming centres located in British Columbia. These funds are used in the operations of the Company but are not recognized in these consolidated financial statements. The Company has provided the BCLC with letters of credit for the cash floats provided (note 14(a)).

Facility development commissions

Approved Amounts eligible for recovery through FDC have not been recorded as amounts receivable in the Company’s consolidated balance sheet and will not be recognized until FDC trust funds become available through future gaming operations.

The Company has unrecognized Approved Amounts to be reimbursed from future FDC funds of $158,254 (2016—$139,651).

F-70

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Additionally, the Company has incurred other eligible costs at its British Columbia casinos and community gaming centres that have been submitted to the BCLC to become Approved Amounts. As at December 31, 2017, the Company has submitted a total of $nil (2016—$40,898) to the BCLC to become Approved Amounts.

Trust funds

Progressive jackpot funds, patron gaming funds and charity gaming funds are held in trust by the Company and have not been recognized in these consolidated financial statements. The funds held in trust by the Company at December 31, 2017 are $773 (2016—$766).

7    Cash and cash equivalents

	2017		2016
	$		$
Cash at bank		56,769		29,028
Cash floats at gaming sites—funded by the Company		40,616		8,425
		97,385		37,453

8    Amounts receivable

	2017		2016
	$		$
Amounts receivable and accrued from OLG		23,915		—
GST/HST receivable		10,749		—
Other amounts receivable		5,174		2,519
		39,838		2,519

9    Inventory

The Company’s inventory consists of food and beverages. For the year ended December 31, 2017, $31,828 (2016—$22,718; 2015—$18,619) of inventory was expensed as cost of food and beverage. For the years ended December 31, 2017, 2016 and 2015, no inventory writedowns were recognized.

F-71

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

10    Property and equipment

	Land			Buildings			Furniture and fixtures			Computer hardware			Equipment			Leasehold improvements			Gaming development costs			Total
	$			$			$			$			$			$			$			$
Year ended December 31, 2016
Net book value—December 31, 2015		108,358			324,409			8,253			1,152			17,020			9,595			8,554			477,341
Gaming development costs and purchase of property and equipment(a)		1,289			4,587			3,544			992			6,192			23,693			30,246			70,543
Disposals(b) and(c)		(28,965	)		(2,818	)		(11	)		(6	)		(125	)		—			(1,664	)		(33,589	)
Transfers		—			656			84			9			180			2,759			(3,688	)		—
Depreciation		—			(17,477	)		(2,952	)		(679	)		(4,444	)		(2,018	)		—			(27,570	)
Writedown		—			—			—			—			—			—			(35	)		(35	)
Net book value—December 31, 2016		80,682			309,357			8,918			1,468			18,823			34,029			33,413			486,690
At December 31, 2016
Cost		80,682			390,778			21,569			4,601			38,744			50,902			33,413			620,689
Accumulated depreciation		—			81,421			12,651			3,133			19,921			16,873			—			133,999
Net book value		80,682			309,357			8,918			1,468			18,823			34,029			33,413			486,690
Year ended December 31, 2017
Net book value—December 31, 2016		80,682			309,357			8,918			1,468			18,823			34,029			33,413			486,690
Acquisition of Ontario North and Southwest Gaming Bundles (note 3)		10,232			67,301			1,939			661			24,912			11,910			—			116,955
Gaming development costs and purchase of property and equipment(a)		5			4,709			1,641			1,595			24,161			18,257			49,416			99,784
Disposals(g)		(3,521	)		(3,909	)		(17	)		—			—			—			—			(7,447	)
Transfers		—			1,029			256			—			378			8,182			(9,845	)		—
Transfer to assets held for sale(f)		(56,994	)		(238,452	)		—			—			—			—			(4,180	)		(299,626	)
Depreciation		—			(20,217	)		(4,076	)		(1,289	)		(13,008	)		(6,203	)		—			(44,793	)
Writedown(e) and(h)		—			—			(22	)		—			(141	)		(17,362	)		—			(17,525	)
Net book value—December 31, 2017		30,404			119,818			8,639			2,435			55,125			48,813			68,804			334,038
At December 31, 2017
Cost		30,404			135,140			25,319			6,857			87,969			70,473			68,804			424,966
Accumulated depreciation		—			15,322			16,680			4,422			32,844			21,660			—			90,928
Net book value		30,404			119,818			8,639			2,435			55,125			48,813			68,804			334,038

(a) During the year ended December 31, 2017, the Company capitalized $2,377 (2016—$1,433; 2015—$1,028) of interest costs related to gaming development based on a borrowing rate of 6.81% (2016—6.37%; 2015—6.75%).

(b) On March 31, 2016, the Company completed the disposition of the Newton Square Mall located in Surrey, British Columbia for proceeds (net of transaction costs) of $9,921. The net book value of the disposed assets was $11,124. This resulted in a loss on sale of property and equipment of $1,203.

(c) On August 31, 2016, the Company completed the disposition of land located in Surrey, British Columbia for proceeds (net of transaction costs) of $25,869. The net book value of the disposed assets was $22,465. This resulted in a gain on sale of property and equipment of $3,404.

(d) On March 4, 2017, the Company closed the operations of Penticton Bingo Palace.

F-72

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

(e) On April 1, 2017, the Lake City Penticton facility was shut down and, on April 5, 2017, was replaced with the new Cascades Penticton Casino. A writedown of property and equipment costs of $167 was recorded.

(f) On December 15, 2017, the Company entered into a Purchase and Sale Agreement (subject to standard closing terms) for the sale and immediate lease back of the land and buildings for Grand Villa Burnaby, Starlight New Westminster and Cascades Langley for gross proceeds of $503,595. The sale was completed on March 12, 2018 (note 27). Consequently, the associated carrying value of $299,626 has been reclassified as assets held for sale.

(g) On December 21, 2017, the Company completed the disposition of the bingo facility and parking lot located in Langley, British Columbia for aggregate proceeds (net of transaction costs) of $7,461. The net book value of the disposed assets was $7,430. This resulted in a gain on sale of property and facility of $31.

(h) The Grand Villa Edmonton has not performed as well as projected. As a result, an impairment assessment was performed as at December 31, 2017. The recoverable amount for the CGU was based on the FVLCOD, which estimates the net present value of the future cash flows expected to be generated by the CGU, discounted using an after-tax discount rate based on the Company’s weighted average cost of capital calculated to be within a range of 9.0% to 10.0% using the capital asset pricing model. These expected future cash flows require a number of assumptions about future business performance. As a result, an impairment of $22,600 was identified, and property and equipment have been written down by $17,358 and intangible assets have been written down by $5,242 (note 11).

(i) During the year ended December 31, 2015, the Company negotiated an arrangement to dispose of its parking lot located at the previous Lake City Kamloops Casino with a book value of $2,500 in exchange for negating a lease termination liability at the previous Lake City Kamloops Casino of $2,084, resulting in a non-cash loss on sale of property and equipment of $416.

The MCOSA, OSAs and BOSAs for the British Columbia based casinos and community gaming centres provide that certain gaming equipment is the property of the BCLC. The Casino Facility Licenses for the Edmonton casinos provide that certain gaming equipment is the property of the AGLC. Accordingly, any costs related to gaming equipment provided by and owned by the BCLC and AGLC have not been recognized in these consolidated financial statements.

F-73

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

11    Intangible assets

	Gaming operating agreements			Above/below market lease agreements			Software			Racebook license			Total
	$			$			$			$			$
Year ended December 31, 2016
Net book value—December 31, 2015		324,395			(1,712	)		352			208			323,243
Additions		—			—			410			—			410
Amortization		(54,791	)		(516	)		(251	)		(103	)		(55,661	)
Net book value—December 31, 2016		269,604			(2,228	)		511			105			267,992
At December 31, 2016
Cost		557,689			1,064			2,599			500			561,852
Accumulated amortization		288,085			3,292			2,088			395			293,860
Net book value		269,604			(2,228	)		511			105			267,992
Year ended December 31, 2017
Net book value—December 31, 2016		269,604			(2,228	)		511			105			267,992
Acquisition of Ontario North and Southwest Gaming Bundles (note 3)		25,047			2,350			—			—			27,397
Additions		—			—			406			—			406
Amortization		(52,463	)		(588	)		(352	)		(103	)		(53,506	)
Writedown(a) and note 10(h)		(6,063	)		—			—			—			(6,063	)
Net book value—December 31, 2017		236,125			(466	)		565			2			236,226
At December 31, 2017
Cost		575,885			3,414			3,005			500			582,804
Accumulated amortization		339,760			3,880			2,440			498			346,578
Net book value		236,125			(466	)		565			2			236,226

(a) During the year, the Company wrote off a suspended OSA for a community gaming centre for $821.

The remaining useful lives for the intangible assets are between 1 and 21 years.

12     Goodwill

	2017		2016
	$		$
Goodwill		8,505		8,505

The Company performs a goodwill impairment test annually and when circumstances indicate that the carrying value may not be recoverable. No impairment was identified as a result of the Company’s most recent annual impairment test.

For the purposes of impairment testing, goodwill has been allocated to Abbotsford, Campbell River, Courtenay, Langley and Victoria Community Gaming Centres (“Playtime Gaming Group”) CGUs and the Cascades Langley CGU in the amounts equal to $5,915 and $2,590, respectively.

F-74

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Goodwill was tested for impairment as at December 31, 2017. The recoverable amount for the CGUs was based on the FVLCOD, which estimates the net present value of the future cash flows expected to be generated by the CGUs, discounted using an after-tax discount rate based on the Company’s weighted average cost of capital calculated to be within a range of 9.0% to 10.0% using the capital asset pricing model. The goodwill impairment test was performed using a Level 3 fair value hierarchy (note 19). In particular, a capitalized cash flow technique was used which included a long-term growth rate of 2%. These expected future cash flows require a number of assumptions about future business performance. These assumptions and estimates were based primarily on the historical performance and economic trends of the relevant business.

13     Accounts payable and accrued liabilities

	2017		2016
	$		$
Trade accounts payable and accruals		41,833		16,600
Construction payable and accruals		18,071		12,865
Salaries, wages and benefits		16,658		11,004
Interest on long-term debt		9,821		2,256
Share-based compensation accrual		5,686		—
Income tax payable		1,780		—
Other		2,457		2,231
		96,306		44,956

14     Long-term debt

	2017			2016
	$			$
Term Loans
Term Loan B-1 (US$402,975)(a) and(g)		505,532			—
Term Loan B-2(a)		79,600			—
Term Loan A(b)		—			192,250
Term Loan B-1(b)		—			116,400
Revolving Credit Facility(a) and(b)		45,000			20,590
Swingline Facility(b)		—			5,000
		630,132			334,240
Langley mortgage(c)		2,016			2,073
Vernon mortgage(d)		3,942			4,133
8.25% Second Priority Senior Secured Notes (US$255,000)(e) and(g)		319,898			—
8.50% Second Priority Senior Secured Notes(f) and(g)		—			200,000
		955,988			540,446
Less
Unamortized portion of deferred transaction costs and debt premium related to embedded derivative		(21,601	)		(6,545	)
Current portion		(53,096	)		(57,037	)
		881,291			476,864

F-75

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

a) Term Loans and Revolving Credit Facility

On February 22, 2017, the Company completed a refinancing (the “2017 Refinancing”) and entered into a credit agreement (the “New Credit Facility”) to borrow up to the following:

Term Loan B-1	US$	405,000
Term Loan B-2	$	80,000
Revolving Credit Facility	$	125,000

The New Credit Facility closed in three tranches: (i) the first tranche closed on February 22, 2017 and the Company received US$232,480 (Term Loan B-1) and $46,000 (Term Loan B-2); (ii) the second tranche closed on May 5, 2017 upon acquisition of the Southwest Gaming Bundle and the Company received US$86,260 (Term Loan B-1) and $17,000 (Term Loan B-2); and (iii) the third tranche closed on May 25, 2017 upon acquiring the North Gaming Bundle and the Company received US$86,260 (Term Loan B-1) and $17,000 (Term Loan B-2). See note 3. Transaction costs directly related to the issuance of the Term Loans of $15,055 were capitalized and are being amortized using the effective interest rate method over the life of the loans. Transaction costs directly related to the issuance of the Revolving Credit Facility of $2,451 were capitalized and are being amortized on a straight-line basis over the life of the loan.

The amount of $24,202 is available to be drawn under the New Credit Facility in addition to the amounts already drawn in relation to the issued letters of credit.

Term Loan Facilities are available as Canadian Dollar Offered Rate (“CDOR”) Loans, Canadian Prime Rate Loans, London Interbank Offered Rate (“LIBOR”) Loans and Base Rate Loans. Base Rate Loans bear interest equal to the highest of the Federal Fund Effective Rate, Prime Rate or the Adjusted LIBOR plus 1.00%.

The interest rate spreads added to the applicable variable rates for the Revolving Credit Facility will be determined quarterly based on the Company’s first lien net leverage ratio as defined in the New Credit Facility. Interest on the Revolving Credit Facility varies within a range of 375 to 400 basis points above CDOR Loans. Interest on Term Loan B-1 is 375 basis points above LIBOR Loans. Interest on Term Loan B-2 is 400 basis points above CDOR Loans.

Advances under Term Loan B-1 at December 31, 2017 were LIBOR Loans bearing interest at 5.44% (2016—nil). Advances under Term Loan B-2 at December 31, 2017 were CDOR Loans bearing interest at 5.54% (2016—nil).

The Company can issue letters of credit under the Revolving Credit Facility. As at December 31, 2017, the Company has issued letters of credit totalling $55,798 (2016—$nil) bearing interest at 3.88% (2016—nil) under the Revolving Credit Facility. The Company has provided the BCLC with letters of credit totalling $23,362 as at December 31, 2017 (2016—$22,717) as security for the cash floats provided as well as a portion of the BCLC’s share of the gaming win held by the Company. The Company has provided the OLG with letters of credit totalling $32,000 as at December 31, 2017 (2016—$10,000) as performance security. Various other letters of credit are provided to select vendors and municipalities related to general business operations and/or development projects.

As at December 31, 2017, the Company has borrowed funds on the Revolving Credit Facility of $45,000 (2016—$nil) in the form of CDOR Loans bearing interest at 6.20% (2016—nil).

F-76

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The Term Loan Facilities have repayment terms as follows:

i) Term Loan B-1 and Term Loan B-2 mature on February 22, 2023 and the Company is required to make quarterly installments equal to 0.25% of the principal amount of the loan commencing on September 30, 2017 with any outstanding principal repayable at maturity.

ii) On the earlier of delivery of audited financial statements and the 100th day following the end of each fiscal year, beginning with the fiscal year ending December 31, 2017, the Company is required to make an aggregate principal payment (“Excess Cash Payment”). The Excess Cash Payment is equal to 0% to 50% of the excess cash flow, as defined in the New Credit Facility, for the applicable fiscal year minus the aggregate principal amount of all prepayments during such fiscal year. The excess cash flow is payable as follows: 50% if the first lien net leverage ratio is greater than 2.25:1.00; 25% if the first lien net leverage ratio is less than or equal to 2.25:1.00 but greater than 1.75:1.00; and 0% if the first lien net leverage ratio is less than or equal to 1.75:1.00.

Aggregate minimum principal payments, prior to Excess Cash Payments, for each of the next five years ending December 31 for the Term Loan B-1 facility are as follows:

	US$
2018		4,050
2019		4,050
2020		4,050
2021		4,050
2022 and beyond		386,775

Aggregate minimum principal payments, prior to Excess Cash Payments, for each of the next five years ending December 31 for the Term Loan B-2 facility are as follows:

	$
2018		800
2019		800
2020		800
2021		800
2022 and beyond		76,400

The Revolving Credit Facility is repayable on February 22, 2022.

A first charge on all assets of the Company and 7588674 is provided as security for the Term Loan Facilities and Revolving Credit Facility.

The Company completed a refinancing of its long-term debt on March 13, 2018 (note 27).

b) Old Term Loans, Revolving Credit Facility and Swingline Facility

The credit agreement that the Company had entered into on November 12, 2010 (the “Old Credit Facility”) was discharged as part of the 2017 Refinancing and all outstanding debt balances were repaid by February 28, 2017. Deferred transaction costs of $3,735 related to the aforementioned credit agreement were written off as a loss on debt extinguishment.

Advances under the Term Loan Facilities were available as US Base Rate Loans, LIBOR Rate Loans, Canadian Prime Rate Loans, Banker’s Acceptance (“BA”) Loans and BA Equivalent Loans.

F-77

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The interest rate spreads added to the applicable variable rates were determined quarterly based on the Company’s total leverage ratio as defined in the credit agreement. Interest on the Term Loan A BA Advances varied within a range of 275 to 375 basis points above BA rates. Interest on the Term Loan B-1 BA Advances varied within a range of 400 to 425 basis points above BA rates. Interest on the Revolving Credit Facility Canadian Prime Advances varied within a range of 175 to 275 basis points above Canadian Prime Rates.

Advances under Term Loan A at December 31, 2016 were BA Advances bearing interest at 4.24% (2015—BA Advances bearing interest at 4.16%). Advances under Term Loan B-1 at December 31, 2016 were BA Equivalent Advances bearing interest at 5.25% (2015—BA Equivalent Advances bearing interest at 5.13%).

As at December 31, 2016, the Company had issued letters of credit totalling $34,348 bearing interest at 3.50%.

As at December 31, 2016, the Company had borrowed funds on the Revolving Credit Facility and Swingline Facility of $20,590 and $5,000, respectively, in the form of Canadian Prime Advances bearing interest at 4.95%.

A first charge on all assets of the Company and 7588674 was provided as security for the Term Loan Facilities and Revolving Credit Facility.

c) Langley mortgage

On May 2, 2016, the Company completed the purchase of the land and building adjacent to the Cascades Langley Casino for $3,030 including closing costs. The Company paid for the purchase with $930 in cash and financed the remaining amount with the assumption of a $2,100 mortgage secured by the land and building. The mortgage bears a fixed interest rate of 3.25% per annum and matures on June 1, 2021.

As part of the Purchase and Sale Agreement, the principal of $2,016 for the Langley mortgage is expected to be repaid in 2018.

d) Vernon mortgage

On January 10, 2014, the Company completed the purchase of the land and building of the existing Lake City Vernon Casino for $8,436 including closing costs. The Company paid for the purchase with $3,786 in cash and financed the remaining amount with the assumption of a $4,650 mortgage secured by the land and building. The mortgage bears a fixed interest rate of 4.29% per annum and matures on April 2, 2019.

The principal payments for each of the next five years ending December 31 for the Vernon mortgage are as follows:

	$
2018		199
2019		3,743
2020		—
2021		—
2022		—

e) 8.25% Second Priority Senior Secured Notes (the “8.25% Notes”)

On February 22, 2017, the Company issued US$255,000 of the 8.25% Notes. The 8.25% Notes mature on March 1, 2024 and bear interest at 8.25% per annum. Interest is payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2017.

F-78

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

A second charge on all assets of the Company and 7588674 is provided as security for the 8.25% Notes.

The Company’s 8.25% Notes agreement has provisions for early redemption during defined periods prior to maturity with the payment of defined premiums, which require separation under the embedded derivative accounting rules. On issuance on February 22, 2017, the fair value of the embedded derivative was $1,515 and was recorded as a derivative asset in other assets and as a premium on the long-term debt in the consolidated balance sheet. The fair value of the embedded derivative included in other assets as at December 31, 2017 was $10,795 (2016—$nil). Accordingly, a change in fair value of embedded derivative gain of $9,280 (2016—$nil) has been recognized during the fiscal year. The premium is amortized over the term of the 8.25% Notes using the effective interest rate method.

Transaction costs directly related to the 8.25% Notes of $10,223 were capitalized and are being amortized using the effective interest rate method over the life of the 8.25% Notes.

In the event of a Change of Control (as defined in the 8.25% Notes agreement), the holders of the 8.25% Notes will have the right to require the Company to repay all or a portion of the outstanding 8.25% Notes at a purchase price equal to 101% of the principal amounts of the 8.25% Notes plus accrued and unpaid interest. This feature is closely related under the embedded derivative accounting rules and does not require separation.

f) 8.50% Second Priority Senior Secured Notes (the “8.50% Notes”)

On November 26, 2013, the Company issued $200,000 of the 8.50% Notes. The 8.50% Notes had a maturity date of November 26, 2020 and bore interest at 8.50% per annum. Interest was payable semi-annually on November 26 and May 26 of each year, commencing on May 26, 2014.

On February 22, 2017, the Company fully redeemed the 8.50% Notes at 104.25% of the principal amount of the 8.50% Notes. The redemption of the 8.50% Notes resulted in a loss on extinguishment of $12,400, which includes an early redemption premium of $8,500.

The Company’s 8.50% Notes agreement had provisions for early redemption during defined periods prior to maturity with the payment of defined premiums, which required separation under the embedded derivative accounting rules. As a result of the redemption of the 8.50% Notes, the embedded derivative was written off and resulted in a loss on extinguishment of $773. As at December 31, 2016, the fair value of the embedded derivative was $773 and was recorded as a derivative asset in other assets and as a premium on the long-term debt on the consolidated balance sheet. A change in fair value of embedded derivative gain of $700 (2015—$700 loss) has been recognized during the year ended December 31, 2016. The premium is amortized over the term of the 8.50% Notes using the effective interest rate method.

g) The components of other non-current assets are as follows:

	2017		2016
	$		$
Embedded derivative		10,795		773
Revolving Credit Facility deferred transaction costs		2,044		562
Deposits		1,158		—
		13,997		1,335

F-79

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The component of other current liabilities is as follows:

	2017		2016
	$		$
CCIRS derivative		72		—

The components of other non-current liabilities are as follows:

	2017		2016
	$		$
CCIRS derivatives		27,693		—
Deferred revenue		750		—
		28,443		—

The Company is exposed to foreign currency exchange rate and interest rate risks primarily related to its US dollar denominated long-term debt. Upon completion of the 2017 Refinancing, the Company entered into CCIRS contracts to manage known currency exposure on its US dollar denominated long-term debt. The CCIRS contracts also economically convert the interest rate risk 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.

Management has entered into CCIRS contracts that cover 75% of the US$405.0 million principal of Term Loan B-1 and 75% of the US$255.0 million principal of the 8.25% Notes. The CCIRS contracts pertaining to the Term Loans: (i) terminate on March 31, 2021; (ii) are fixed at a US dollar to Canadian dollar foreign exchange rate of 1.3168; and (iii) bear a fixed weighted average interest rate of 5.41%. The CCIRS contracts pertaining to the 8.25% Notes: (i) terminate on March 1, 2021; (ii) are fixed at a US dollar to Canadian dollar foreign exchange rate of 1.3168; and (iii) bear a fixed weighted average interest rate of 7.85%.

F-80

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

h) As part of completing the Playtime Group acquisition, the vendor group placed a third charge mortgage on the real estate asset located in Courtenay, British Columbia that was acquired.

The change in liabilities arising from financing activities is as follows:

	Current portion of long-term debt			Long-term debt
	$			$
Balance—December 31, 2016		57,037			476,864
Cash flows from (used in)
Proceeds from long-term debt		5,880			943,208
Deferred transaction costs		—			(25,278	)
Repayment of long-term debt		(31,447	)		(480,517	)
Net repayment of Revolving Credit Facility and Swingline Facility		19,410			—
Total cash movements		(6,157	)		437,413
Non-cash changes
Amortization of deferred transaction costs		—			2,498
Debt premium related to embedded derivatives		—			1,515
Loss on debt extinguishment		—			6,208
Foreign exchange gain		—			(40,991	)
Reclassification of long-term debt		2,216			(2,216	)
Total non-cash movements		2,216			(32,986	)
Balance—December 31, 2017		53,096			881,291

F-81

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

15    Share capital

Authorized

Unlimited number of voting common shares without par value

Issued and outstanding

	Number of shares			Amount
				$
Balance—December 31, 2014		39,371,727			346,959
Issued to a director for services rendered		8,946			102
Balance—December 31, 2015		39,380,673			347,061
Issued to a director for services rendered		2,982			34
Authorized to a director for services rendered		5,964			68
Share repurchase		(1	)		—
Balance—December 31, 2016		39,389,618			347,163
Issued to a director for services rendered		8,946			102
Return of capital		—			(191,680	)
Balance—December 31, 2017		39,398,564			155,585

On February 15, 2017, the Board of Directors of the Company approved a resolution authorizing a US$100,000 ($131,680) reduction in stated capital of the Company and the return of the US$100,000 ($131,680) capital reduction to the common shareholders. Shareholders of the Company as at February 15, 2017 were paid their pro rata share of the stated capital reduction based on the number of shares held.

On December 28, 2017, the Board of Directors of the Company approved a resolution authorizing a $60,000 reduction in stated capital of the Company and the return of the $60,000 capital reduction to the common shareholders. Shareholders of the Company as at December 28, 2017 were paid their pro rata share of the stated capital reduction based on the number of shares held.

Share-based compensation

The Company has entered into arrangements to provide share-based compensation to select executives and a director.

The most significant arrangements provide for certain executives of the Company to receive a number of shares based on a monetary value determined at a future date based on the payment of dividends (other than recurring dividends) or certain future liquidity events, provided the executive is employed by the Company or within six months of the date of the liquidity events if terminated without just cause. Potential liquidity events involve the sale of the common shares of the Company by the existing shareholders. The monetary value is determined based on the price of the common shares and the number of common shares sold at the future event.

a) The number of potential shares issuable under the share-based payment arrangements as at December 31, 2017 is 2,194,377 (2016—2,161,554) if all of the common shares held by existing shareholders are sold.

F-82

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The award under the arrangement is considered to be granted and the weighted average fair value of the award is $10.43 per share as at December 31, 2017 (2016—$10.06). The fair value was based on the Company’s estimate of the fair value of its common shares at the award date based on the most recent share issuance. The Company has estimated the number of shares expected to vest based on its estimate of the most likely possible outcome of a sale of some or all common shares by the existing shareholders and the possible service periods of the executives. The number of shares expected to vest as at December 31, 2017 is 1,457,234 (2016—1,935,580).

The length of the vesting period depends on various events and the Company has estimated the expected vesting period based on the most likely outcome of the performance condition. The Company revises its estimate of the length of the vesting period, if necessary, if subsequent information indicates that the period has changed.

b) During the year ended December 31, 2017, the Company issued 8,946 common shares (2016—issued and authorized 2,982 and 5,964 common shares respectively; 2015—issued 8,946 common shares) with an aggregate value of $102 (2016—$102; 2015—$102) to a director for services rendered.

c) As a result of the return of the $131,680 capital reduction on February 15, 2017, certain executives of the Company became entitled to share-based compensation of $9,653. The payment of these amounts was made in cash, with $1,486 paid in cash subsequent to year-end.

d) As a result of the return of the $60,000 capital reduction on December 28, 2017, certain executives of the Company became entitled to share-based compensation of $3,888. The payment of these amounts was made in cash.

As a result of the history of the Board of Directors approving payment of share-based compensation related to the return of the capital reduction to the common shareholders in cash, a portion of share-based compensation is now considered cash settled. This portion has been recognized at fair value. As at December 31, 2017, an amount of $5,686 had been included in accounts payable and accrued liabilities.

During the year ended December 31, 2017, the Company recognized total share-based compensation expense of $19,631 (2016—$3,111 recovery; 2015—$5,410 expense).

16    Income taxes

Deferred income taxes

	2017			2016
	$			$
Deferred tax assets		—			3,338
Deferred tax liabilities		(14,826	)		(20,311	)
Deferred taxes—net		(14,826	)		(16,973	)

Deferred tax assets and liabilities will be recovered after more than 12 months.

F-83

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The components of the net deferred income tax assets and liabilities are as follows:

	2017			2016
	$			$
Deferred tax assets
Non-capital losses		846			25,880
Intangible assets		17,736			12,017
Deferred rent		1,414			793
Other		—			88
Transaction costs		263			—
		20,259			38,778
Deferred tax liabilities
Property and equipment		(21,559	)		(42,767	)
Intangible assets		(10,335	)		(11,935	)
Transaction costs		—			(994	)
Financial derivatives		(3,070	)		(55	)
Other		(121	)		—
		(35,085	)		(55,751	)
		(14,826	)		(16,973	)

On the consolidated balance sheet, deferred tax assets and liabilities have been offset where the Company has the legal right and intends to offset.

Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable.

At December 31, 2017, the Company has non-capital losses carried forward for federal income tax purposes of $283,145 (2016—$231,236). The non-capital losses expire from 2030 to 2037. Of this amount, non-capital losses pertaining to $280,031 (2016—$132,085) have not been recognized in these consolidated financial statements.

At December 31, 2017, 7588674 has non-capital losses carried forward for federal income tax purposes of $nil (2016—$37,019).

Subsequent to year end and during the nine month period ended September 30, 2018, the Company estimated that it would have approximately $193,459 of net income for tax purposes that can be reduced through utilization of the Company’s existing non capital losses. As such, during that subsequent period, the Company recognized deferred tax assets in relation to the existing non-capital losses, that were previously unrecognized non-capital losses as at the year ended December 31, 2017. This recognized deferred tax asset was also been expensed during the corresponding period subsequent to year end to reflect the anticipated utilization of the corresponding non-capital losses.

The Company’s current income tax expense and recovery of deferred income taxes are as follows:

	2017			2016			2015
	$			$			$
Current income tax expense		(1,780	)		(45	)		—
Recovery of deferred income taxes		2,147			1,829			—
		367			1,784			—

F-84

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The Company’s income tax recovery can be reconciled to loss before income taxes as follows:

	2017			2016			2015
	$			$			$
Loss before income taxes		(65,441	)		(22,240	)		(28,722	)
Statutory tax rates		26.21	%		26.08	%		25.89	%
Recovery of income taxes at statutory tax rates		(17,152	)		(5,800	)		(7,436	)
Tax effects of
Non-taxable portion of net capital (gain) loss		(3,030	)		(545	)		127
Share-based compensation and other non-deductible expenses		1,648			(656	)		1,680
Change in unrecognized deferred tax assets		41,189			5,763			6,945
Permanent differences		(1,250	)		(280	)		(1,441	)
Other		(144	)		(266	)		125
Assets held for sale		(21,628	)		—			—
Net recovery of income taxes		(367	)		(1,784	)		—

The recovery of income taxes is recognized based on the weighted average annual income tax rate expected for the year of 26.21% (2016—26.08%; 2015—25.89%).

Other income tax matters

The Canada Revenue Agency (“CRA”) has conducted audits of the Company’s and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. relating to the taxation years ended December 31, 2010 to 2014. The CRA has taken the view to recharacterize FDC amounts as taxable income, as well as reclassify amounts included in Class 14 as Eligible Capital Property.

For accounting purposes, FDC is recorded as part of revenues in the consolidated statement of operations and comprehensive loss when received. For income tax purposes, based on the underlying operating agreements with the BCLC and the BCLC FDC policy, management believes that FDC received from the BCLC is appropriately characterized under the relevant income tax laws as a reimbursement and a reduction of the cost of the related long-lived asset.

As part of its audit, the CRA has taken the view that FDC was received as service fee income and should be included in taxable income when received instead of being a reimbursement of the BCLC-approved gaming related property, plant and equipment costs as filed by the Company and its subsidiaries. If the CRA’s current views prevail, it would accelerate the timing of when the Company and its subsidiaries recognize taxable income, but would also increase the tax depreciation deduction (capital cost allowance) that the Company could recognize in prior and future years.

During the year ended December 31, 2015, the Company received notices of reassessment and/or notices of determination of loss from the CRA relating to the taxation years ended December 31, 2010 to 2012 inclusive for the Company and December 31, 2011 and 2012 inclusive for its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. During the year ended December 31, 2017, the Company received notices of determination of loss from the CRA relating to the taxation years ended December 31, 2013 to 2014 and a notice of reassessment relating to the taxation years ended December 31, 2015 and 2016 for the Company. The Company also received a notice of determination of loss from the CRA relating to the taxation year ended December 31,

F-85

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

2014 pertaining to Boardwalk Gaming Squamish Inc. and a notice of reassessment from the CRA relating to the taxation year ended December 31, 2014 pertaining to 427967 B.C. Ltd. Subsequent to year-end, the Company received a notice of confirmation from the CRA relating to the taxation year ended December 31, 2010 and the taxation years ended December 31, 2012 to 2014 inclusive. The Company also received a notice of confirmation from the CRA relating to the taxation year ended December 31, 2011, 2012 and 2014 pertaining to Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd, respectively.

The Company and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. intend to vigorously defend their tax filing and have filed notices of objection to the above notices of reassessments and notices of determination of loss and, subsequent to year end, filed a notice of appeal to the Tax Court of Canada. The Company and its subsidiaries Boardwalk Gaming Squamish Inc. and 427967 B.C. Ltd. plan to file a notice of objection to the CRA in response to each notice of reassessment and/or notice of loss determination received for any subsequent years, where appropriate. The Company believes that the filing positions adopted are appropriate and in accordance with the law. The Company also believes it has substantial defences in response to the matters raised by the CRA and will vigorously appeal the reassessments and redeterminations. No provision has been made in these consolidated financial statements for the reassessments. The Company has sufficient non-capital loss carry-forwards to offset any additional income taxes that are payable as a result of the reassessments. During the year ended December 31, 2015, the CRA accepted the Company’s application of non-capital loss carry-forwards for years in which the reassessments resulted in taxable income to eliminate taxes payable and prevent interest and penalties from accruing. According to the notices of reassessment and notices of determination of loss received and the CRA proposed amendments, net income (loss) for tax purposes for the taxation years ended December 31, 2010, 2011, 2012, 2013, 2014, 2015 and 2016 would increase (decrease) by $1,715, $30,908, $31,217, $30,073, $31,840, $28,528 and $28,528, respectively. The likely timing to resolve this matter may take years.

The CRA has conducted excise tax audits of the Company and its subsidiary 7588674 relating to the taxation period of May 18, 2010 to June 30, 2015 and February 1, 2010 to September 16, 2010, respectively. The CRA has taken the view that the Company and its subsidiary were not providing a financial service to their customers in relation to ATM fees collected, and as such, GST and/or HST should have been collected and remitted as the Company and its subsidiary were not providing an exempt supply.

During fiscal 2017, the Company and its subsidiary 7588674 received a proposed reassessment from the CRA relating to the taxation period of May 18, 2010 to June 30, 2015 and February 1, 2010 to September 16, 2010, respectively. In the proposed reassessment, the CRA has proposed an adjustment to the net tax on the Company’s GST/HST returns of $2,534 and an adjustment to the net tax on its subsidiary 7588674’s GST/HST returns of $219. In addition, the CRA has proposed to assess penalties of approximately $634 and $55, respectively.

Subsequent to year-end, the Company and its subsidiary 7588674 remitted payment of the net tax owing of $2,563 and $224, respectively. In addition, the Company and its subsidiary 7588674 remitted payment of $641 and $55 in relation to the assessed penalties and $878 and $120 in relation to interest.

F-86

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

17    Other expenses

	2017		2016		2015
	$		$		$
Business acquisition costs		7,017		2,242		2,462
Transaction costs		5,168		291		—
Site pre-opening costs		1,591		2,121		2,099
Restructuring costs		818		760		207
Other		615		458		1,029
Lease termination costs		—		—		2,084
		15,209		5,872		7,881

18    Interest expense

	2017		2016		2015
	$		$		$
Interest on long-term debt		56,610		32,735		31,653
Amortization of deferred transaction costs and premium on long-term debt		2,956		2,742		2,559
		59,566		35,477		34,212

19    Financial instruments

Financial risk management

The Company’s activities expose it to a variety of financial risks, which include credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The Company’s risk management activities are designed to mitigate possible adverse effects on the Company’s performance. Risk management activities are managed by the finance and accounting department.

The Company’s significant financial instruments and the types of risks to which their carrying values are exposed are as follows:

	Risks
					Market risk
	Credit		Liquidity		Interest rate		Foreign exchange rate
Cash and cash equivalents		X				X
Amounts receivable		X
Derivative financial assets (other assets)		X				X		X
Derivative financial liabilities (other liabilities)						X		X
Gaming revenue payable to BCLC, AGLC and OLG				X
Accounts payable and accrued liabilities				X				X
Deferred consideration payable				X
Long-term debt				X		X

F-87

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Credit risk

Credit risk is the risk that a party to one of the Company’s financial instruments will cause a financial loss to the Company by failing to discharge an obligation. The carrying values of the Company’s financial assets represent the maximum exposure to credit risk and are as follows:

	2017		2016
	$		$
Cash and cash equivalents		97,385		37,453
Amounts receivable		39,838		2,519
		137,223		39,972

Cash and cash equivalents: Credit risk associated with these assets is minimized by ensuring that cash and cash equivalents are held by high-quality financial institutions.

Amounts receivable: Credit risk associated with these balances is minimized due to the nature of the Company’s business. The majority of the balances are due from the federal government for sales tax rebates and provincial gaming corporations. As at December 31, 2017, the Company had a provision for bad debts of $nil (2016—$nil) and no amounts receivable were past due or impaired.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset. The Company settles its financial obligations out of cash and cash equivalents. The ability to do this relies on the Company generating sufficient revenue, collecting amounts receivable in a timely manner, and maintaining sufficient cash and cash equivalents for anticipated needs.

The contractual maturity of the Company’s financial liabilities (including estimated interest based on the total leverage ratio requirements under the terms of the New Credit Facility agreement and excluding Excess Cash Payments for fiscal years ending December 31, 2018 and onwards (note 14)) on an undiscounted basis is as follows:

	Expected payments by period as at December 31, 2017
	Expected within 1 year		2—3 years		4—5 years		More than 5 years		Total
	$		$		$		$		$
Gaming revenue payable to BCLC, AGLC and OLG		13,900		—		—		—		13,900
Accounts payable and accrued liabilities		96,306		—		—		—		96,306
Deferred consideration payable		1,200		400		—		—		1,600
Long-term debt		109,846		126,632		121,636		915,592		1,273,706
		221,252		127,032		121,636		915,592		1,385,512

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates and/or foreign currency exchange rates or other price risk.

F-88

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Interest rate risk

Interest rate risk is the risk that the fair value or cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s variable rate long-term debt is subject to significant cash flow interest rate risk.

If interest rates on the Company’s variable rate long-term debt had been 1% higher or 1% lower, with all other variables held constant, the effect on the Company’s interest expense for the year ended December 31, 2017 would have been $5,661 (2016—$3,212; 2015—$2,917) higher or lower, respectively.

Foreign exchange rate risk

Foreign exchange rate risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates.

The Company has cash and cash equivalents denominated in US dollars. As at December 31, 2017, US dollar denominated cash and cash equivalents totalled US$5,598 (2016—US$224).

The Company periodically has accounts payable and accrued liabilities denominated in US dollars. As at December 31, 2017, US dollar denominated accounts payable and accrued liabilities totalled US$22,246 (2016—US$191).

Management has entered into CCIRS contracts which cover 75% of the US$660,000 principal value of the US dollar denominated debt at a fixed US dollar to Canadian dollar foreign exchange rate of 1.3168. For additional details on the CCIRS contracts, refer to note 14.

If the period-end foreign exchange rate had been 10% higher or 10% lower, with all other variables held constant, the effect on the Company’s net loss for the year ended December 31, 2017 would have been $85,319 (2016—$nil; 2015—$nil) higher or lower, respectively.

Fair values of financial instruments

Financial assets and liabilities accounted for or disclosed at fair value on a recurring basis are classified within a fair value hierarchy that reflects the significance of the inputs used in determining fair value. There are three levels of the fair value hierarchy.

Level 1—Quoted prices in active markets for identical assets

Instruments that have unadjusted quoted prices available in an active market for identical assets or liabilities.

Level 2—Significant other observable inputs

Instruments that do not have quoted prices in active markets but for which market observable inputs are used as the inputs in the determination of fair value.

F-89

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Level 3—Unobservable inputs

Instruments that have a significant input into the fair value measurement that is derived from management’s best estimates and market observable information is not available for such input.

The Company’s only financial instruments accounted for at fair value subsequent to initial recognition are the embedded derivatives and CCIRS, which are classified as held-for-trading.

The Company’s other financial instruments are measured at amortized cost. The Company provides fair value disclosures for financial instruments measured at amortized cost. The carrying values of cash and cash equivalents, amounts receivable, gaming revenue payable to BCLC, AGLC and OLG, and accounts payable and accrued liabilities approximate their fair values because of the short-term nature of these instruments.

The fair value disclosures involve the use of fair value measurements. These fair value disclosure measurements are categorized as follows in the fair value hierarchy:

	Fair value hierarchy		2017				2016
			Carrying amount		Fair value		Carrying amount		Fair value
			$		$		$		$
Financial instruments
Derivative financial instruments (other assets)		Level 3		10,795		10,795		773		773
Derivative financial instruments (other liabilities)		Level 3		27,765		27,765		—		—
Deferred consideration payable		Level 3		1,600		1,600		8,800		8,800
Long-term debt		Level 3		934,387		986,771		533,901		539,557

The New Credit Facility term loans were fair valued separately, using an effective rate as at December 31, 2017 of 5.02% (2016—nil) for Term Loan B-1 and 5.03% (2016—nil) for Term Loan B-2. The 8.25% Notes were fair valued using an effective rate of 5.90% (2016—nil).

The Old Credit Facility term loans were fair valued separately, using an effective rate as at December 31, 2016 of 4.19% for Term Loan A and 5.29% for Term Loan B-1. The 8.50% Notes were fair valued using an effective rate of 8.35%.

The fair value of the Company’s 8.25% and 8.50% Notes (the “Notes”) has two components of value: a conventional Note obligation and a prepayment option that allows the Company in certain circumstances to prepay the Notes. The prepayment option is exercisable through payment of a prepayment penalty. The Company has determined that the prepayment option is an embedded derivative. Accordingly, on initial recognition of the obligations on issuance of the Notes, a prepayment option asset has been recorded. The Notes and embedded derivative have been separately valued.

On initial recognition, the estimated future cash flows of long-term debt were discounted using a discount rate derived from an appropriate risk-free interest rate yield curve commensurate with the timing of the contractual maturity of the future cash flows. A credit spread was added to the risk-free rate to derive the total rate. As the Company does not have a market observable credit spread, the Company obtained a range of potential credit spreads available from market observable information on entities with a comparable credit risk and debt maturity to the Company. In determining the appropriate credit spread input to the discounted cash flow model at the reporting date, the Company selected its best estimate of the credit spread that was within the

F-90

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Company’s estimate of a reasonably possible range of credit spreads based upon observable market information. The Company used a consistent valuation method and related valuation model as at December 31, 2017 and 2016 to provide fair value disclosure of long-term debt.

The embedded prepayment options that have been separated from the Notes are valued using the Hull-White one factor model as implemented in the FINCAD callable bond function, for which the key inputs at December 31, 2017 are the mean-reversion constant of 12.68% (2016—2.61%) and interest rate volatility of 1.14% (2016—0.79%). The embedded prepayment options are subsequently measured at fair value through profit or loss. The embedded derivative financial instrument is measured on a recurring basis and the fair value measurement is categorized in Level 3 of the fair value hierarchy.

The CCIRS derivatives are valued using a discounted cash flow model as implemented in the Bloomberg Swap Manager for which the key inputs are the terms of the CCIRS contracts and market data as at December 31, 2017. The CCIRS derivatives are subsequently measured at fair value through profit or loss. The CCIRS derivative financial instruments are measured on a recurring basis and the fair value measurement is categorized in Level 3 of the fair value hierarchy.

Movement in the value of derivative financial instruments is as follows:

	2017			2016
	$			$
Opening balance—embedded derivative		773			73
Change in fair value of embedded derivative related to the 8.50% Notes		—			700
Loss on debt extinguishment related to the 8.50% Notes		(773	)		—
Inception fair value of embedded derivative related to the 8.25% Notes		1,515			—
Change in fair value of embedded derivative related to the 8.25% Notes		9,280			—
Closing balance—embedded derivative		10,795			773
Inception fair value of CCIRS derivatives		—			—
Change in CCIRS derivatives		(27,765	)		—
Closing balance—CCIRS derivatives		(27,765	)		—

The change in CCIRS derivatives in the above table does not include the settlement amounts of the CCIRS derivatives.

20    Capital management

The Company’s capital structure comprises equity (deficiency), long-term debt and outstanding letters of credit.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company’s strategy is to ensure it remains compliant with all of its existing debt covenants, so as to ensure continuous access to debt capital markets. Management reviews results and forecasts regularly to monitor the Company’s compliance.

The New Credit Facility agreement for the Term Loan and Revolving Credit Facilities (note 14) requires compliance with the following financial performance covenants: total net leverage ratio, and first lien net intensive ratio as defined in the credit agreement. The Company is in compliance with the financial covenants as at December 31, 2017.

F-91

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Under the terms of the New Credit Facility agreement relating to its Term Loan and Revolving Credit Facilities, the Company is permitted to remedy non-compliance with debt covenants by completing an equity cure by issuing common shares of the Company and repaying the Term Loan Facilities with the proceeds from the share issuance. Equity cures are available to the Company three times during the term of the credit agreement.

21    Commitments and contingencies

Operating lease commitments

The Company leases office space and equipment as well as certain of its casino and community gaming centre locations. The lease terms are between one and 22 years, and the majority of lease agreements are renewable at the end of the lease period at market rent. As at December 31, 2017, future minimum operating lease payments (excluding variable rent based on revenue and additional rent for operating expenses) are as follows:

	$
No later than 1 year		19,006
Later than 1 year and no later than 5 years		47,786
Later than 5 years		148,863
		215,655

During the year ended December 31, 2017, the Company recognized operating lease expense of $20,787 (2016—$7,455; 2015—$5,057).

Other commitments

The Company has covenanted to the OLG that the OLG shall realize gaming revenue in each year that is equal to or greater than an agreed upon threshold in respect of each operating year, or to otherwise pay to the OLG the amount by which the gaming revenue realized in a year is less than the applicable threshold in respect of such year (each such payment, a “Threshold Top-Up Amount”). Based on the Ontario operating results, the likelihood that the Company will fail to generate sufficient gaming revenue for the OLG for any year is expected to be remote, and as such, no provision has been made for Threshold Top-Up Amounts.

As at December 31, 2017, the Company has committed to purchase orders in relation to the acquisition of slot machines of US$5,686 (2016 —$nil).

As at December 31, 2017, the Company has committed to purchase orders or agreements in relation to the development and/or renovation of certain casinos and community gaming centres of $22,948.

The Company completed a sale-leaseback subsequent to year-end (note 27) and leases the casino locations with an initial lease term of 20 years, which is renewable at the end of the lease period for an additional 10-year term at market rent. The future minimum operating lease payments (excluding variable rent based on revenue and additional rent for operating expenses) are $871,903.

F-92

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

Contingencies

Various claims and litigation arise in the course of the Company’s business. The Company believes it has accounted for sufficient provisions in relation to such claims and litigation (note 16), and remaining contingencies should not have a material effect on the financial position or operating results of the Company.

22    Changes in non-cash working capital items

	2017			2016			2015
	$			$			$
Amounts receivable		(32,232	)		(394	)		(544	)
Inventory		(499	)		(205	)		(257	)
Prepaid expenses and deposits		(185	)		(10	)		(277	)
Gaming revenue payable to BCLC, AGLC and OLG		7,161			808			(68	)
Accounts payable and accrued liabilities		12,381			4,719			12,083
Deferred revenue		1,726			—			—
		(11,648	)		4,918			10,937

23    Expenses breakdown by nature

	2017		2016			2015
	$		$			$
Employee costs		206,041		143,824			126,026
Amortization and depreciation		98,299		83,231			67,720
Marketing and promotion		23,279		24,749			22,605
Raw materials and consumables		32,180		24,177			20,915
Rent		25,916		10,623			8,440
Writedown of non-financial assets		23,588		35			93
Repairs, maintenance and office		19,807		12,302			11,101
Share-based compensation (recovery)		19,631		(3,111	)		5,410
Utilities and property tax		15,516		9,635			7,915
Professional and services		7,098		4,541			3,682
Business acquisition costs		7,017		2,242			2,462
Licenses, permits and subscriptions		5,644		1,220			896
Transaction costs		5,168		291			—
Other		4,805		3,140			3,322
Travel and entertainment		1,610		958			679
Lease termination		—		—			2,084
		495,599		317,857			283,350

24    Related party transactions

The Company is controlled by The Catalyst Capital Group Inc. (incorporated in Canada), which owns 73.6% of the Company’s shares and is the Company’s ultimate controlling party.

F-93

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

During the years ended December 31, 2017, 2016 and 2015, shareholders of the Company provided consulting and advisory services without charge.

Compensation of key management

Key management includes the Company’s Board of Directors and executive officers. Compensation awarded to key management is as follows:

	2017		2016			2015
	$		$			$
Salaries and other benefits		3,314		1,975			1,401
Share-based compensation (recovery)		19,631		(3,111	)		4,982
		22,945		(1,136	)		6,383

25    Employee future benefits

The Company makes contributions into a Registered Retirement Savings Plan and pension plans for its British Columbia and Alberta employees. Under these plans, the Company makes contributions equal to the employees’ contributions, subject to a maximum limit. The Company also makes contributions into a defined contribution pension plan for its Ontario employees effective for the Southwest Gaming Bundle and North Gaming Bundle on May 9, 2017 and May 30, 2017, respectively. Under this plan, the Company makes a fixed percentage contribution based on employee earnings and also makes contributions equal to the employees’ contributions, subject to a maximum limit. Employer contributions made during the year ended December 31, 2017 totalled $2,211 (2016—$831; 2015—$789).

26    Segmented information

The Company has eight reporting segments: Grand Villa Burnaby, Cascades Langley, Starlight New Westminster, Thompson-Okanagan, Community Gaming Centres, Ontario, Edmonton and Corporate. Commencing in 2016, the Company combined its Grand Villa Edmonton and Palace Edmonton reporting segments into the Edmonton segment as this is the manner in which the Company’s chief operating decision maker reviews the financial information regarding these two casinos. Although Edmonton and Corporate did not meet the quantitative thresholds required by IFRS 8, Operating Segments, for reportable segments, management concluded that these segments should be reported, as they are closely monitored by the chief operating decision maker. All business of the Company is conducted in Canada.

	Year ended December 31, 2017		Year ended December 31, 2016		Year ended December 31, 2015
	$		$		$
Gaming
Grand Villa Burnaby		78,544		74,172		74,397
Cascades Langley		46,280		42,345		39,518
Starlight New Westminster		44,112		44,638		41,733
Thompson-Okanagan		45,071		42,417		40,547
Community Gaming Centres		24,178		23,877		5,419
Ontario		124,049		—		—
Edmonton		20,835		20,600		23,768
Corporate		—		—		—
		383,069		248,049		225,382

F-94

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

	Year ended December 31, 2017		Year ended December 31, 2016		Year ended December 31, 2015
	$		$		$
Food and beverage
Grand Villa Burnaby		14,282		14,229		13,058
Cascades Langley		11,467		10,999		9,447
Starlight New Westminster		7,200		6,905		5,727
Thompson-Okanagan		14,269		10,920		7,913
Community Gaming Centres		5,931		5,762		1,866
Ontario		3,698		—		—
Edmonton		9,128		6,594		4,759
Corporate		—		—		—
		65,975		55,409		42,770
Hotel
Grand Villa Burnaby		11,096		10,436		9,679
Cascades Langley		2,405		2,056		1,799
Starlight New Westminster		—		—		—
Thompson-Okanagan		—		—		—
Community Gaming Centres		—		—		—
Ontario		—		—		—
Edmonton		—		—		—
Corporate		—		—		—
		13,501		12,492		11,478
Automated teller machines
Grand Villa Burnaby		1,232		1,718		1,572
Cascades Langley		1,163		1,594		1,454
Starlight New Westminster		891		1,238		1,088
Thompson-Okanagan		1,317		1,753		1,607
Community Gaming Centres		1,059		1,068		237
Ontario		4,290		—		—
Edmonton		715		961		882
Corporate		—		—		—
		10,667		8,332		6,840
Other
Grand Villa Burnaby		1,191		701		705
Cascades Langley		1,247		857		890
Starlight New Westminster		949		778		774
Thompson-Okanagan		404		354		421
Community Gaming Centres		719		719		102
Ontario		685		—		—
Edmonton		360		266		323
Corporate		54		208		242
		5,609		3,883		3,457

F-95

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

	Year ended December 31, 2017			Year ended December 31, 2016			Year ended December 31, 2015
	$			$			$
Total Segment revenue
Grand Villa Burnaby		106,345			101,256			99,411
Cascades Langley		62,562			57,851			53,108
Starlight New Westminster		53,152			53,559			49,322
Thompson-Okanagan		61,061			55,444			50,488
Community Gaming Centres		31,887			31,426			7,624
Ontario		132,722			—			—
Edmonton		31,038			28,421			29,732
Corporate		54			208			242
		478,821			328,165			289,927
Segment earnings before depreciation, amortization, writedown of non-financial assets, share-based compensation and other expenses
Grand Villa Burnaby		47,060			42,217			42,102
Cascades Langley		30,126			25,137			21,700
Starlight New Westminster		19,076			17,248			15,422
Thompson-Okanagan		12,895			14,004			13,469
Community Gaming Centres		12,557			11,783			1,253
Ontario		50,844			—			—
Edmonton		(7,700	)		470			4,838
Corporate		(24,909	)		(14,524	)		(11,103	)
		139,949			96,335			87,681
Amortization of intangible assets		53,506			55,661			44,791
Depreciation of property and equipment		44,793			27,570			22,929
Writedown of non-financial assets		23,588			35			93
Other expenses		15,209			5,872			7,881
Share-based compensation (recovery)		19,631			(3,111	)		5,410
(Loss) income before other expenses (income) and income taxes		(16,778	)		10,308			6,577
Other expenses (income)
Interest expense		59,566			35,477			34,212
Interest income		(679	)		(28	)		(29	)
Change in fair value of embedded derivatives		(9,280	)		(700	)		700
Change in fair value of cross currency interest rate swaps		31,991			—			—
Loss on debt extinguishment		16,135			—			—
(Gain) loss on sale of property and equipment		(36	)		(2,201	)		416
Foreign exchange gain		(49,034	)		—			—
		48,663			32,548			35,299
Loss before income taxes		(65,441	)		(22,240	)		(28,722	)
Income tax (expense) recovery
Current		(1,780	)		(45	)		—
Deferred		2,147			1,829			—
		367			1,784			—
Loss and comprehensive loss for the year		(65,074	)		(20,456	)		(28,722	)

F-96

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

27    Subsequent events

a) On February 14, 2018, the Company signed the OSAs with the BCLC in relation to all its British Columbia casino and community gaming centre operations, effective April 1, 2018. The OSAs have a 20-year term with an option to extend for an additional five years. All the Company’s British Columbia casino and community gaming centre operations will be entitled to payments from the BCLC for both eligible gaming and other eligible capital expenditures at a rate of 5% of net win through the Minimum Investment Requirement (“MIR”) program, replacing the BCLC’s FDC and Accelerated Facility Development Costs program, as long as the Company fulfills the required MIR spend amount over the 20-year term.

b) On February 20, 2018, the Company announced the closure of Newton Bingo Country effective April 21, 2018.

c) On March 12, 2018, the Company completed a sale-leaseback of certain real estate properties including the Grand Villa Burnaby, Starlight New Westminster and Cascades Langley for gross proceeds of $503,595, resulting in a gain on sale of $192,399. Certain of the Company’s wholly owned subsidiaries entered into long-term leases for each of the properties and will continue to operate the casinos under the leases (note 21). Proceeds from the sale-leaseback were used to repay the Term Loan Facilities.

d) The Company completed a refinancing of its existing long-term debt (the “2018 Refinancing”) on March 13, 2018 (the “2018 Refinancing Date”). The new debt structure includes a $150,000 revolving credit facility with a sublimit of US$25,000 and an initial lien term loan comprising US$335,000.

As part of the sale-leaseback and 2018 Refinancing, the Company repaid all outstanding amounts under the Company’s New Credit Facility (note 14). The remaining balance of the unamortized deferred transaction costs of $15,124 are written off due to the extinguishment of debt.

As part of the 2018 Refinancing, shareholders of the Company approved a resolution on March 6, 2018 authorizing a US$100,000 reduction in stated capital of the Company and the return of the US$100,000 capital reduction to the common shareholders. Shareholders of the Company as at March 12, 2018 were paid their pro rata share of the stated capital reduction based on the number of shares held.

Total transaction costs incurred related to the 2018 Refinancing and return of the capital reduction to the common shareholders were approximately $15,818.

As a result of the return of the US$100,000 capital reduction to common shareholders on March 12, 2018, certain executives of the Company became entitled to share-based compensation of $8,718 and certain employees to a bonus payment of $500. The payments of these amounts were made in cash.

As part of the 2018 Refinancing, the Company modified its existing CCIRS contracts in relation to Term Loan B-1. Management has entered into CCIRS contracts that cover 91% of the senior secured first lien loan of US$335,000. The CCIRS contracts: (i) terminate on March 14, 2022; (ii) are fixed at a US dollar foreign exchange rate of 1.3168; and (iii) bear a fixed weighted average interest rate of 4.86%.

e) On March 15, 2018, the Company announced that it was selected as the successful proponent by the OLG to operate gaming facilities in the OLG’s Gaming Bundle 7 (Central) (the “Central Gaming Bundle”). The Company signed a TAPA with the OLG on March 14, 2018 and, subject to closing conditions, is committed to signing a 23-year COSA when the acquisition closes in fiscal 2018 (the “Central Acquisition”). The purchase price for such assets, exclusive of working capital, was $62,600 of cash consideration, including working capital of approximately $26,732 (subject to customary post-close adjustments).

F-97

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(expressed in thousands of Canadian dollars)

The closing for the Central Acquisition and assumption of operating arrangements from the OLG, including the signing of the COSA with the OLG, was completed on July 18, 2018. Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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 Casinos Innisfil), and have the opportunity to develop a casino in either Wasaga Beach or Collingwood. The Company has provided the OLG with letters of credit of $40,000 to assure the Company’s performance on certain obligations relating to the operating agreements.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on July 18, 2018:

	$
Cash and cash equivalents		30,302
Non-cash working capital		(3,570	)
Property and equipment		48,566
Intangible assets		14,034
		89,332

f) Effective April 21, 2018, Newton Bingo Country was closed.

g) On April 30, 2018, the BCLC returned the letters of credit issued to them by the Company in the amount of $23,311 in relation to the cash floats provided by the BCLC for the casinos and community gaming centres located in British Columbia. Effective April 20, 2018, the Company is responsible for providing the cash floats.

h) On June 29, 2018, the Company entered into a share purchase agreement with Natural Market Restaurants Corp. (“NMRC”) to acquire all of the shares of NMRC’s wholly owned subsidiary, 7562578 Canada Inc. (“POM”), for a purchase price of $16,294. Catalyst II, Catalyst II-P and Catalyst III (“Catalyst Entities”) own and control NMRC. The closing of the POM acquisition occurred on July 13, 2018 (“Closing Date”). The purchase price payable by the Company was satisfied by way of a $14,711 deposit paid by the Company to the Catalyst Entities, with a holdback of $1,583 to be released 12 months following the Closing Date, assuming all conditions of release are met. The acquisition of POM is intended to allow the Company to utilize POM’s non-capital losses, which NMRC has represented to be not less than $217,000. The Company’s ability to access and utilize these non-capital losses may be limited in certain circumstances, including upon an acquisition of control of the Company. NMRC has indemnified the Company for any breach of representations made, up to a maximum of 50% of the total purchase price paid, being a maximum of $8,148.

i) On July 16, 2018, the Company amended its 2018 Senior Secured Credit Facility. As part of the amendment, the Company increased Term Loan B by US$105,000. The New Term Loan B comprises US$440,000. Transaction costs directly related to the credit amendment of $2,322 were capitalized and are being amortized using the effective interest rate method over the life of the loan. The refinancing resulted in the recognition of a debt modification loss in 2018 of $6,264. As part of the amendment, the Company modified its existing CCIRS contracts in relation to Term Loan B. Management has entered into CCIRS contracts that cover 75% of the senior secured first lien loan of US$440,000. The CCIRS contracts: (i) terminate on March 14, 2022; (ii) are fixed at a weighted average US dollar foreign exchange rate of 1.3166; and (iii) bear a fixed weighted average interest rate of 4.94%.

j) Shareholders of the Company approved a resolution on October 15, 2018 authorizing a reduction in stated capital of the Company and the return of the capital reduction to the common shareholders. Shareholders of the Company as at October 25, 2018 were paid their pro rata share of the stated capital reduction of $7,500 based on the number of shares held.

k) On October 18, 2018, the Company entered into a purchase and sale agreement (subject to standard closing terms) for the sale of the vacant land in Penticton, BC for gross proceeds of $1,900. The sale was completed on October 31, 2018.

F-98

CENTRAL GAMING BUNDLE

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

July 18, 2018

F-99

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of

Gateway Casinos & Entertainment Limited

We have audited the accompanying statement of assets acquired and liabilities assumed of the Gaming Bundle 7 (“Central Gaming Bundle”) as of July 18, 2018 (acquisition date), and the related notes to the financial statement.

Management’s responsibility for the financial statement

Management is responsible for the preparation and fair presentation of this financial statement in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”); this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statement referred to above presents fairly, in all material respects, the financial position of Central Gaming Bundle as of July 18, 2018 in accordance with IFRS.

Emphasis of matter

We draw your attention to note 1, which describes that the accompanying statement of assets acquired and liabilities assumed of the Central Gaming Bundle was prepared to comply with certain rules and regulations under the securities laws in Canada and is not intended to be a complete set of financial statements prepared in accordance with IFRS. Our opinion is not modified with respect to this matter.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

December 18, 2018

F-100

CENTRAL GAMING BUNDLE

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

As at July 18, 2018

	$
Assets
Current assets
Cash and cash equivalents		30,302
Amounts receivable		2,124
Prepaid expenses		1,516
Inventory		2,383
		36,325
Non-current assets
Property and equipment		48,566
Intangible assets		14,034
		62,600
Total assets		98,925
Liabilities
Current liabilities
Accounts payable and accrued liabilities		9,186
Deferred revenue		407
Total liabilities		9,593

The accompanying notes are an integral part of this financial statement.

F-101

CENTRAL GAMING BUNDLE

NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

July 18, 2018

1    Basis of presentation

This statement comprises the assets acquired and liabilities assumed by Gateway Casinos & Entertainment Limited (the “Company”) in its acquisition of Gaming Bundle 7 (the “Central Gaming Bundle”). The Company accounted for the acquisition of the Central Gaming Bundle using the acquisition method in accordance with IFRS 3, Business Combinations. On July 18, 2017, the Company signed a 23-year Casino Operating Service Agreement (“COSA”) with the Ontario Lottery Gaming Corporation (“OLG”). Under the Central Gaming Bundle Transition and Asset Purchase Agreement (“TAPA”), the Company acquired gaming assets and assumed certain liabilities of Georgian Downs and Casino Rama Resort.

The accompanying abbreviated financial statements, which comprise the statement of assets acquired and liabilities assumed were prepared for the purpose of providing Central Gaming Bundle historical information to comply with certain rules and regulations under the securities laws in Canada and is not intended to be a complete presentation of the financial statements of the acquired business and are not necessarily indicative of the financial position or results of operations of the acquired business on a stand-alone basis.

The accompanying abbreviated financial statements were prepared in accordance with IFRS as issued by the IASB and was derived from the historical accounting records of the OLG and the purchase price allocation which represents the fair value of the assets acquired and liabilities assumed at the acquisition date. This statement is presented in Canadian dollars, which is the functional and presentation currency of the Company.

Assets and liabilities have been defined as cash and cash equivalents, amounts receivable, prepaid expenses, inventory, property and equipment, intangible assets, accounts payable and accrued liabilities and deferred revenue.

The statement was approved by the Board of Directors for issue on December 18, 2018.

2    Significant accounting policies and critical accounting estimates and judgments

Business combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at 100% of their fair values at the acquisition date. The acquisition date is the date the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred by the Company, and the liabilities, including contingent or deferred consideration, incurred and payable by the Company to the former owners of the acquiree. Acquisition-related costs, other than costs to issue debt or equity securities of the acquirer, are expensed as incurred. The costs to issue equity securities of the Company as consideration for the acquisition are reduced from share capital as share issue costs.

Non-controlling interests are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition. This decision is made on an acquisition-by-acquisition basis.

The excess of (i) total consideration transferred by the Company, measured at fair value, including contingent or deferred consideration, and (ii) the non-controlling interests in the acquiree, over the fair value of net assets acquired, is recorded as goodwill.

F-102

CENTRAL GAMING BUNDLE

NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

July 18, 2018

Fair value of net assets acquired in business combinations

The identifiable tangible and intangible assets purchased and liabilities assumed in a business combination are recognized at their estimated fair values at the date of acquisition, with the exception of deferred income tax which is recognized and measured in accordance with International Accounting Standards (“IAS”) 12, Income Taxes. The identification of assets purchased and liabilities assumed and their valuation are specialized and judgmental. Where appropriate, the Company engages business valuators to assist in the valuation of tangible and intangible assets acquired.

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments with a maturity, at the date of purchase, of three months or less. Cash floats represent cash on hand at the Central Gaming Bundle’s casinos. The following table summarizes cash and cash equivalents on July 18, 2018:

	$
Cash at bank		35
Cash floats at gaming sites—funded by the Company		30,267
		30,302

Subsequent events

Subsequent events have been evaluated through December 18, 2018, which is the date the financial statement was available to be issued. No subsequent events were required to be recognized or disclosed.

3    Acquisition

On March 15, 2018, the Company announced that it was selected as the successful proponent by the OLG to operate gaming facilities in the OLG’s Central Gaming Bundle. The Company signed a TAPA with the OLG on March 14, 2018 and, subject to closing conditions, was committed to signing a 23-year COSA when the acquisition closed (the “Central Acquisition”), which occurred on July 18, 2018.

On July 18, 2018, the Company signed the 23-year COSA with the OLG for the operation of the Central Gaming Bundle. Under the Central Gaming Bundle agreements, we purchased the assets of the Central Gaming 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 total purchase price for such assets was $89,332 of cash consideration, including net non-cash working capital of ($3,570) comprising amounts receivable, prepaid expenses, inventory and accrued liabilities. The Company also incurred transaction costs of $2,244, of which $1,629 was incurred in 2018, $226 was incurred in 2017, $166 was incurred in 2016, and the remainder was incurred in previous years. In addition to the consideration paid, $7,657 was paid and was refunded to the Company through an input tax credit on October 5, 2018.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed on July 18, 2018:

	$
Cash and cash equivalents		30,302
Non-cash working capital		(3,570	)
Property and equipment		48,566
Intangible assets		14,034
		89,332

F-103

CENTRAL GAMING BUNDLE

NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

July 18, 2018

Property and equipment consists of real property and improvements of $3,260 and $45,306 of equipment. Intangible assets consist of $1,554 of software, $200 of a below market lease, and $12,280 for the gaming operating agreement.

F-104

ONTARIO LOTTERY AND GAMING CORPORATION

Combined Schedules of Revenues and Direct Expenses of the

NORTH GAMING BUNDLE

for the years ended March 31, 2017 and 2016

F-105

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Ontario Lottery and Gaming Corporation

We have audited the accompanying Combined Schedules of Revenues and Direct Expenses of the North Gaming Bundle of Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2017 and 2016, and the related notes (the “Combined Schedules”).

Management’s Responsibility for the Combined Schedules

Management is responsible for the preparation and fair presentation of these Combined Schedules in accordance with the basis of preparation as described in note 2; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of Combined Schedules that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Combined Schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Combined Schedules. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Combined Schedules, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the entity’s preparation and fair presentation of the Combined Schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Combined Schedules.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Combined Schedules referred to above present fairly, in all material respects, the combined revenue and direct expenses of the North Gaming Bundle of the Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2017 and 2016 in accordance with the basis of presentation as described in note 2.

Emphasis of Matter

We draw attention to note 2, which describes that the accompanying Combined Schedules of Revenues and Direct Expenses of the North Gaming Bundle of the Ontario Lottery and Gaming Corporation were prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018. The Combined Schedules are not intended to be a complete set of financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Our opinion is not modified with respect to this matter.

Chartered Professional Accountants, Licensed Public Accountants

November 16, 2018

Toronto, Canada

KPMG LLP, is a Canadian limited liability partnership and a member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

KPMG Canada provides services to KPMG LLP.

F-106

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

	Notes		March 31, 2017		March 31, 2016
Revenues
Gaming			$	116,737,720	$	115,782,772
Non-gaming		4		2,780,149		2,824,319
Total revenues				119,517,869		118,607,091
Direct expenses
Payroll				34,867,186		36,089,697
Commissions				6,085,899		6,036,703
Marketing and promotion				3,581,889		3,356,993
Operating		10		4,330,130		2,974,093
Facilities				9,372,159		9,788,332
Food and beverage				1,906,412		2,116,004
Payments to the Government of Canada		9		4,438,226		4,715,169
Amortization		5		3,016,540		4,877,838
Other				158,644		129,436
Total direct expenses				67,757,085		70,084,265
Excess revenue over direct expenses				51,760,784		48,522,826
Other income		7		2,486,234		2,364,531
Excess revenue over direct expenses and other income			$	54,247,018	$	50,887,357

Related party transactions (Note 8)

Commitment (Note 12)

Subsequent event (Note 13)

The accompanying notes are an integral part of these Combined Schedules.

F-107

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

1. Reporting entity

Ontario Lottery and Gaming Corporation (“OLG” or the “Corporation”) was established without share capital on April 1, 2000 pursuant to the Ontario Lottery and Gaming Corporation Act, 1999. The Corporation is classified as an Operational Enterprise Agency of the Ontario government and is responsible for conducting and managing Land-Based Gaming, which includes, OLG-operated Slots and Casinos.

As part of the Corporation’s modernization strategy, the Corporation has bundled all slots at racetracks and casino operations into gaming bundles. Following a successful procurement process, the bundles, which include the tangible assets, working capital and the right to operate and build, are transferred to private sector service providers.

The North Gaming Bundle of OLG comprises Casino Sault Ste. Marie, Casino Thunder Bay and Slots at Sudbury Downs.

The Corporation’s head office and corporate office, respectively, are located at:

• 70 Foster Drive, Suite 800, Sault Ste. Marie, Ontario, P6A 6V2

• 4120 Yonge Street, Suite 402, Toronto, Ontario, M2P 2B8

These Combined Schedules of Revenues and Direct Expenses for the North Gaming Bundle of OLG were authorized for issue by the Board of Directors of the Corporation on November 16, 2018.

2. Basis of preparation

a. Statement of compliance

The Combined Schedules of Revenues and Direct Expenses of the North Gaming Bundle of OLG for each of the years ended March 31, 2017 and 2016 (the “Combined Schedules”) have been prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018.

The single Combined Schedules, comprised of revenues, direct costs and other income, of the North Gaming Bundle of OLG for each of the years ended March 31, 2017 and 2016 are prepared in accordance with the recognition, measurement and disclosure principles of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) to the extent considered relevant by the Corporation’s management to preparing such Combined Schedules.

The Combined Schedules do not comply with all of the presentation and disclosure requirements of IFRS as issued by the IASB for a complete set of financial statements. As a result, the Combined Schedules are not a complete set of financial statements in accordance with IFRS as issued by the IASB and are not intended to present fairly, in all material respects, the financial position of the North Gaming Bundle of OLG as at March 31, 2017 and 2016, and of its financial performance, and its cash flows for the two years then ended in accordance with IFRS as issued by the IASB.

b. Basis of measurement

These Combined Schedules have been prepared on the historical cost basis.

F-108

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

c. Functional and presentation currency

These Combined Schedules are presented in Canadian dollars. The Canadian dollar is the North Gaming Bundle’s functional currency and the currency of the primary economic environment in which the North Gaming Bundle operates.

d. Use of estimates and judgments

The preparation of these Combined Schedules in conformity with the recognition, measurement and disclosure principles of IFRS (Note 2.a) requires Management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of revenues and direct expenses and the disclosures relevant to the revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.

Areas of significant estimation and uncertainty that have a significant effect on the amounts recognized in the Combined Schedules, and could result in a material adjustment within the next fiscal year, are discussed in the following notes:

• Amortization—useful lives and residual values (Note 3.g)

• Employee benefits (Notes 10 and 11)

Critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the Combined Schedules or disclosed in the Notes to the Combined Schedules are as follows:

• Direct expenses (Note 3.e)

• Disclosures that are relevant to revenue and direct expenses

3. Significant accounting policies

The following accounting policies have been applied consistently by the Corporation for the Combined Schedules for the years ended March 31, 2017 and March 31, 2016.

a. Basis of combination

The Combined Schedules comprise the accounts of the Corporation representing Casino Sault Ste. Marie Casino, Thunder Bay and Slots at Sudbury Downs; all of which belong to the North Gaming Bundle.

b. Foreign currency

Transactions in foreign currencies are converted to the Corporation’s functional currency using the exchange rates at the date of the transactions. Foreign currency transaction gains and losses are recognized within Other income in the Combined Schedules in the period in which they arise.

F-109

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

c. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized for the following major business activities:

Gaming revenue

Gaming revenue includes revenue from slot and table game operations at Slots and Casinos facilities belonging to the North Gaming Bundle. This is recognized in the same period the game is played, net of prizes paid. Gaming revenue is recorded net of the change in accrued jackpot liabilities and liabilities under customer loyalty incentive programs.

Progressive jackpot liabilities are measured based on the anticipated payout of the progressive jackpot.

Non-gaming revenue

Non-gaming revenue includes revenue earned from food and beverage and other services excluding the retail value of food and beverage and other goods and services provided to customers on a complimentary basis at Slots and Casinos belonging to the North Gaming Bundle. Non-gaming revenue is recorded at the retail value and is recognized as goods are delivered and services performed.

d. Customer loyalty incentive programs

The Corporation has customer loyalty incentive programs whereby customers have the choice to receive free or discounted goods and services and, in many cases, the right to receive cash. Some of these customer loyalty incentive programs allow customers to earn points based on the volume of play during gaming transactions. These points are recorded as a separate deliverable in the revenue transaction.

If the customer has the right to receive free or discounted goods and services and/or the option of receiving cash, a financial liability is recognized when the points are granted and a corresponding amount equal to the cash value is recorded as a reduction to revenue. The customer’s point balance will be forfeited if the customer does not earn additional points over the subsequent six- to 12-month period. If the points expire or are forfeited, the financial liability is derecognized.

For programs that provide customers the right to receive free or discounted goods and services, the revenue, as determined by the fair value of the undelivered goods and services related to the customer loyalty award, is deferred until the award is provided or expires.

e. Direct expenses

Direct expenses are those costs that are directly incurred as part of operating the North Gaming Bundle sites. Indirect expenses, which relate to corporate overhead costs and other costs that are not in control of sites’ direct operational management, are not reflected in the Combined Schedules. Judgement is required in determining what is a Direct expense.

f. Commissions

Commissions are recognized in the Combined Schedules in the period in which they are incurred. Commissions include payments to Municipalities which host a Casino or Slots facility and receive a percentage of Electronic Games Revenue and Live Table Game Revenue as defined in the Municipal Contribution Agreements.

F-110

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

g. Property, plant and equipment

(i) Recognition and measurement

The Corporation capitalizes any capital purchase related to the North Gaming Bundle that has a useful life beyond the current year.

Property, plant and equipment are measured at cost less accumulated amortization and accumulated impairment losses, if any.

Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self- constructed assets includes the cost of materials and direct labour and other costs directly attributable to bring the assets to a working condition for their intended use, the cost of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing costs on qualifying assets. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment related to the North Gaming Bundle are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within Other income in the Combined Schedules.

(ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Corporation and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The cost of the day-to-day servicing of property, plant and equipment is recognized as incurred in the Combined Schedules.

(iii) Amortization

Amortization is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in the Combined Schedules on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are amortized over the shorter of the lease term and their estimated useful lives unless it is reasonably certain that the Corporation will obtain ownership by the end of the term of the lease.

The estimated useful lives for the current and comparative periods are as follows:

Asset	Rate
Buildings	10 to 50 years
Furniture, fixtures and equipment	3 to 10 years
Leasehold improvements	Lesser of useful life or term of lease
Slots and Casinos gaming assets	3 to 10 years

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ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

Property, plant and equipment are amortized when ready for their intended use. Construction in progress and assets not in use are stated at cost, less any recognized impairment loss. Amortization of these assets, determined on the same basis as other property assets, commences when the assets are ready for their intended use.

Amortization methods, useful lives and residual values are reviewed at each fiscal year end and adjusted if appropriate.

h. Leases

At the inception of an arrangement related to the North Gaming Bundle, the Corporation determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the Corporation has the right to control the use of the underlying asset.

At the inception or upon the reassessment of the arrangement, the Corporation separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Corporation concludes that it is impracticable to separate the payments reliably under a finance lease, an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge on the liability is recognized using the Corporation’s incremental borrowing rate.

Leases where the Corporation assumes substantially all the risks and rewards of ownership are classified as finance leases. On a lease-by-lease basis, the Corporation estimates whether substantially all of the risks and rewards of ownership are assumed, taking into account the length of the lease, the present value of the minimum lease payments compared to the fair value of the leased asset and other terms contained within the lease.

Leases other than finance leases are classified as operating leases. Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease, except when another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

i. Employee benefits

(i) Defined benefit plans

A defined benefit plan is a post-employment benefit plan that requires entities to record their net obligation in respect of the plan and is not a defined contribution plan. The Corporation provides defined benefit pension plans to the employees of the North Gaming Bundle through the Public Service Pension Fund (PSPF). The Corporation does not have a net obligation in respect of the defined benefit pension plan as the plan is a sole- sponsored defined benefit plan established by the Province of Ontario. The Province of Ontario controls all entities included in the pension plan. The Corporation has classified this plan as a state plan whereby there is no contractual agreement or stated policy for charging the net defined benefit cost of the plan to the Corporation. As such, the Corporation records these post-employment benefits as a defined contribution plan.

(ii) Other long-term employee benefits

The Corporation’s net obligation with respect to long-term employee benefits other than pension plans is the amount of future benefit that employees of the North Bundle have earned in return for their service in the current

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ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

and prior periods. That benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Corporation’s obligations. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognized within Operating expenses in the Combined Schedules in the period in which they arise.

(iii) Short-term employee benefits

Short-term employee benefit obligations related to employees of the North Gaming Bundle are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be settled wholly within 12 months of the end of the reporting period if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

j. Income taxes

As the Corporation is an agent of the Crown, it is not subject to federal or provincial corporate income taxes or corporate capital taxes.

k. Initial application of standards, interpretation and amendments

The Corporation did not adopt any new or amended accounting pronouncements that had a material impact on the Combined Schedules.

l. Accounting standards issued but not yet effective

A number of new accounting standards and amendments to standards are not yet effective as at March 31, 2017 and have not been applied in preparing these Combined Schedules.

(i) IFRS 15, Revenue from Contracts with Customers (IFRS 15)

In May 2014, the IASB issued IFRS 15, replacing IAS 11, Construction Contracts, IAS 18, Revenue and IFRIC 13, Customer Loyalty Programmes. The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized. In April 2016, clarifications to IFRS 15 were issued to provide additional guidance with respect to the five-step analysis, transition and the application of the standard to licences of intellectual property. IFRS 15 and the clarifications are mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

(ii) IFRS 9, Financial Instruments (IFRS 9)

In July 2014, the IASB issued the complete IFRS 9 which replaces IAS 39, Financial Instruments: Recognition and Measurement. The new standard provides guidance on the classification and measurement of financial assets and introduces a new expected credit loss model for calculating impairment. It also incorporates general hedge accounting requirements. IFRS 9 is mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

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ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

(iii) IFRS 16, Leases (IFRS 16)

In January 2016, the IASB issued IFRS 16, replacing IAS 17, Leases and IFRIC 4, Determining whether an arrangement contains a lease. The standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17. IFRS 16 is mandatorily effective for annual periods beginning on or after January 1, 2019. The Corporation is assessing the impact of this new standard on these Combined Schedules.

4. Non-gaming revenue

	March 31, 2017		March 31, 2016
Food and beverage	$	2,433,438	$	2,494,974
Other		346,711		329,345
Non-gaming revenue	$	2,780,149	$	2,824,319

5. Property, plant and equipment

Cost	Land			Buildings			Furniture fixtures and equipment			Leasehold improvements			Slots and Casinos gaming assets			Construction in progress and assets not yet in use			Total
Balance at April 1, 2015	$	4,644,754		$	67,939,653		$	22,047,898		$	5,148,324		$	25,742,606		$	31,376		$	125,554,611
Additions and assets put into use		—			78,404			403,433			—			4,086,241			(31,376	)		4,536,702
Disposals and retirements		—			(72,843	)		(591,500	)		—			(4,651,215	)		—			(5,315,558	)
Balance at March 31, 2016	$	4,644,754		$	67,945,214		$	21,859,831		$	5,148,324		$	25,177,632		$	—		$	124,775,755
Balance at April 1, 2016	$	4,644,754		$	67,945,214		$	21,859,831		$	5,148,324		$	25,177,632		$	—		$	124,775,755
Additions and assets put into use		—			101,424			503,295			53,664			2,205,928			—			2,864,311
Disposals and retirements		—			—			(1,710,186	)		—			(1,822,950	)		—			(3,533,136	)
Transfer to held for sale (Note 6)		(4,644,754	)		(68,046,638	)		(20,652,940	)		(5,201,988	)		(25,560,610	)		—			(124,106,930	)
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Accumulated amortization
Balance at April 1, 2015	$	—		$	38,763,889		$	20,778,095		$	5,148,324		$	18,848,114		$	—		$	83,538,422
Amortization for the period		—			1,471,403			709,020			—			2,697,415			—			4,877,838
Disposals and retirements		—			(23,310	)		(939,066	)		—			(4,307,933	)		—			(5,270,309	)
Balance at March 31, 2016	$	—		$	40,211,982		$	20,548,049		$	5,148,324		$	17,237,596		$	—		$	83,145,951
Balance at April 1, 2016	$	—		$	40,211,982		$	20,548,049		$	5,148,324		$	17,237,596		$	—		$	83,145,951
Amortization for the period		—			883,321			371,049			—			1,762,170			—			3,016,540
Disposals and retirements		—			—			(1,210,989	)		—			(1,822,950	)		—			(3,033,939	)
Transfer to held for sale (Note 6)		—			(41,095,303	)		(19,708,109	)		(5,148,324	)		(17,176,816	)		—			(83,128,552	)
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Carrying amounts
Balance at March 31, 2016	$	4,644,754		$	27,733,232		$	1,311,782		$	—		$	7,940,036		$	—		$	41,629,804
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—

F-114

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

6. Disposal group held for sale

On December 13, 2016, OLG announced the selection of Gateway as the Service Provider for the North Gaming Bundle. Under the terms of the Transition and Asset Purchase Agreement, OLG committed to sell certain assets and Gateway agreed to assume certain liabilities related to the sites in the bundle. Accordingly, on December 13, 2016, these assets and liabilities met the criteria to be classified as a disposal group held for sale and were measured at their carrying amount being the lower of their carrying amount and their fair value less costs to sell. Amortization of the property, plant and equipment of the bundle ceased when they were reclassified as held for sale. As a result, the Combined Schedules reflect amortization to December 13, 2016.

7. Other income

	March 31, 2017		March 31, 2016
Automated teller machines	$	2,236,281	$	2,223,325
Foreign exchange gain, net		120,870		99,456
Other miscellaneous income		89,618		2,731
Gain on disposal of property, plant and equipment, net		39,465		39,019
Other income	$	2,486,234	$	2,364,531

8. Related parties

The Corporation is related to various other government agencies, ministries and Crown corporations. Related party transactions include post-employment benefit plans with the Ontario Pension Board (Note 11.a), other long-term employee benefits with the Workplace Safety and Insurance Board.

All transactions with these related parties are in the normal course of operations and are measured at the exchange amounts, which are the amounts of consideration established and agreed to by the related parties.

9. Payments to the Government of Canada

As a prescribed registrant, the Corporation makes GST/HST remittances to the Government of Canada pursuant to the Games of Chance (GST/HST) Regulations of the Excise Tax Act. The Corporation’s net tax for a reporting period is calculated using net tax attributable to both gaming and non-gaming activities.

The net tax attributable to non-gaming activities is calculated in the same way as it is for any other GST/HST registrant in Canada. The non-recoverable GST/HST payable to suppliers and the additional imputed tax payable to the Government of Canada on gaming-related expenses were recognized as payments to the Government of Canada.

The net tax attributable to gaming activities results in a 26 per cent tax burden on most taxable gaming expenditures incurred by the Corporation.

F-115

ONTARIO LOTTERY AND GAMING CORPORATION

NORTH GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

10. Operating expenses

	March 31, 2017		March 31, 2016
Slot operations	$	2,166,751	$	2,315,821
Table operations		194,733		178,199
Casino finance		330,325		331,567
Security and surveillance		257,108		268,201
General and administration(a)		1,381,213		(119,695	)
Operating expenses	$	4,330,130	$	2,974,093

(a) As a Schedule 2 employer under the Workplace Safety and Insurance Act, 1997, (the Act), the Corporation is individually responsible for the full cost of accident claims filed by its workers. The Workplace Safety and Insurance Board (WSIB) maintains full authority over the claims entitlement process and administers and processes claims payments on the Corporation’s behalf. Included in general and administration expenses for the year ended March 31, 2017 is a WSIB actuarial loss of $728,116, compared to a gain for the year ended March 31, 2016 of $597,340.

11. Employee benefits

a. Other post-employment benefit plans

The annual contributions made to the PSPF by the Corporation are recorded as a payroll expense in the Combined Schedules. The Corporation’s contribution and pension expense related to employees of the North Gaming Bundle for the year ended March 31, 2017 was $1,632,442 (year ended March 31, 2016—$1,662,742).

12. Commitment

a. Obligation under operating lease

The Corporation has entered into an operating lease for a facility it occupies, and the related obligation expires in May 2017 on transfer to Gateway. Rent expense of $4,006,982 is included in facilities on the Combined Schedule of Revenues and Direct Expenses for the year ended March 31, 2017 (year ended March 31, 2016—$4,442,111). The future minimum lease payments as at March 31, 2017 are $342,158.

13. Subsequent event

On May 30, 2017, OLG and Gateway entered into 20-year Casino Operating and Services Agreement for the North Gaming Bundle. Gateway purchased the net assets of the North Gaming Bundle, which included an estimate for working capital and took over day-to-day operations of the sites from OLG. Gateway is entitled to receive a share of the gaming revenue, as defined, generated at the Casinos and Slot facility it operates. The share of revenue owed to Gateway reflects the fixed fee, a variable fee (calculated as a percentage of gaming revenue above a set revenue threshold) and an amount for permitted capital expenditures.

F-116

ONTARIO LOTTERY AND GAMING CORPORATION

Combined Schedules of Revenues and Direct Expenses of the

SOUTHWEST GAMING BUNDLE

for the years ended March 31, 2017 and 2016

F-117

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Ontario Lottery and Gaming Corporation

We have audited the accompanying Combined Schedules of Revenues and Direct Expenses of the Southwest Gaming Bundle of Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2017 and 2016, and the related notes (the “Combined Schedules”).

Management’s Responsibility for the Combined Schedules

Management is responsible for the preparation and fair presentation of these Combined Schedules in accordance with the basis of preparation as described in note 2; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of Combined Schedules that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Combined Schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Combined Schedules. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Combined Schedules, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the entity’s preparation and fair presentation of the Combined Schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Combined Schedules.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Combined Schedules referred to above present fairly, in all material respects, the combined revenue and direct expenses of the Southwest Gaming Bundle of the Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2017 and 2016 in accordance with the basis of presentation as described in note 2.

Emphasis of Matter

We draw attention to note 2, which describes that the accompanying Combined Schedules of Revenues and Direct Expenses of the Southwest Gaming Bundle of the Ontario Lottery and Gaming Corporation were prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018. The Combined Schedules are not intended to be a complete set of financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Our opinion is not modified with respect to this matter.

Chartered Professional Accountants, Licensed Public Accountants

November 16, 2018

Toronto, Canada

KPMG LLP, is a Canadian limited liability partnership and a member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

KPMG Canada provides services to KPMG LLP.

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ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

	Notes	March 31, 2017		March 31, 2016
Revenues
Gaming		$	226,753,644	$	224,377,607
Non-gaming	4		3,922,469		3,692,128
Total revenues			230,676,113		228,069,735
Direct expenses
Payroll			49,454,746		49,550,957
Commissions			10,961,978		10,892,561
Marketing and promotion			4,720,730		5,213,272
Operating	10		5,446,590		4,612,772
Facilities			13,561,397		14,271,678
Food and beverage			3,024,966		3,060,221
Payments to the Government of Canada	9		7,469,734		7,823,286
Amortization	5		5,411,591		7,734,603
Other			1,014		5,832
Total direct expenses			100,052,746		103,165,182
Excess revenue over direct expenses			130,623,367		124,904,553
Other income	7		4,157,862		4,105,878
Excess revenue over direct expenses and other income		$	134,781,229	$	129,010,431

Related party transactions (Note 8)

Commitments (Note 12)

Subsequent event (Note 13)

The accompanying notes are an integral part of these Combined Schedules.

F-119

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

1. Reporting entity

Ontario Lottery and Gaming Corporation (“OLG” or the “Corporation”) was established without share capital on April 1, 2000 pursuant to the Ontario Lottery and Gaming Corporation Act, 1999. The Corporation is classified as an Operational Enterprise Agency of the Ontario government and is responsible for conducting and managing Land-Based Gaming, which includes, OLG-operated Slots and Casinos.

As part of the Corporation’s modernization strategy, the Corporation has bundled all slots at racetracks and casino operations into gaming bundles. Following a successful procurement process, the bundles, which include the tangible assets, working capital and the right to operate and build, are transferred to private sector service providers.

The Southwest Gaming Bundle of OLG comprises Casino Point Edward, Slots at Western Fair District, Slots at Clinton Raceway, Slots at Dresden Raceway, Slots at Hanover Raceway and Slots at Woodstock Raceway.

The Corporation’s head office and corporate office, respectively, are located at:

• 70 Foster Drive, Suite 800, Sault Ste. Marie, Ontario, P6A 6V2

• 4120 Yonge Street, Suite 402, Toronto, Ontario, M2P 2B8

These Combined Schedules of Revenues and Direct Expenses for the Southwest Gaming Bundle of OLG were authorized for issue by the Board of Directors of the Corporation on November 16, 2018.

2. Basis of preparation

a. Statement of compliance

The Combined Schedules of Revenues and Direct Expenses of the Southwest Gaming Bundle of OLG for each of the years ended March 31, 2017 and 2016 (the “Combined Schedules”) have been prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018.

The single Combined Schedules, comprised of revenues, direct costs and other income, of the Southwest Gaming Bundle of OLG for each of the years ended March 31, 2017 and 2016 are prepared in accordance with the recognition, measurement and disclosure principles of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) to the extent considered relevant by the Corporation’s management to preparing such Combined Schedules.

The Combined Schedules do not comply with all of the presentation and disclosure requirements of IFRS as issued by the IASB for a complete set of financial statements. As a result, the Combined Schedules are not a complete set of financial statements in accordance with IFRS as issued by the IASB and are not intended to present fairly, in all material respects, the financial position of the Southwest Gaming Bundle of OLG as at March 31, 2017 and 2016, and of its financial performance, and its cash flows for the two years then ended in accordance with IFRS as issued by the IASB.

F-120

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

b. Basis of measurement

These Combined Schedules have been prepared on the historical cost basis.

c. Functional and presentation currency

These Combined Schedules are presented in Canadian dollars. The Canadian dollar is the Southwest Gaming Bundle’s functional currency and the currency of the primary economic environment in which the Southwest Gaming Bundle operates.

d. Use of estimates and judgments

The preparation of these Combined Schedules in conformity with the recognition, measurement and disclosure principles of IFRS (Note 2.a) requires Management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of revenues and direct expenses and the disclosures relevant to the revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.

Areas of significant estimation and uncertainty that have a significant effect on the amounts recognized in the Combined Schedules, and could result in a material adjustment within the next fiscal year, are discussed in the following notes:

• Amortization—useful lives and residual values (Note 3.g)

• Employee benefits (Note 10 and 11)

Critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the Combined Schedules or disclosed in the Notes to the Combined Schedules are as follows:

• Direct expenses (Note 3.e)

• Disclosures that are relevant to revenues and direct expenses

3. Significant accounting policies

The following accounting policies have been applied consistently by the Corporation for the Combined Schedules for the years ended March 31, 2017 and March 31, 2016.

a. Basis of combination

The Combined Schedules comprise the accounts of the Corporation representing Casino Point Edward, Slots at Western Fair District, Slots at Clinton Raceway, Slots as Dresden Raceway, Slots at Hanover Raceway and Slots at Woodstock Raceway; all of which belong to the Southwest Gaming Bundle.

b. Foreign currency

Transactions in foreign currencies are converted to the Corporation’s functional currency using the exchange rates at the date of the transactions. Foreign currency transaction gains and losses are recognized within Other income in the Combined Schedules in the period in which they arise.

F-121

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

c. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized for the following major business activities:

Gaming revenue

Gaming revenue includes revenue from slot and table game operations at Slots and Casinos facilities belonging to the Southwest Gaming Bundle. This is recognized in the same period the game is played, net of prizes paid. Gaming revenue is recorded net of the change in accrued jackpot liabilities and liabilities under customer loyalty incentive programs.

Progressive jackpot liabilities are measured based on the anticipated payout of the progressive jackpot.

Non-gaming revenue

Non-gaming revenue includes revenue earned from food and beverage and other services excluding the retail value of food and beverage and other goods and services provided to customers on a complimentary basis at Slots and Casinos belonging to the Southwest Gaming Bundle. Non-gaming revenue is recorded at the retail value and is recognized as goods are delivered and services performed.

d. Customer loyalty incentive programs

The Corporation has customer loyalty incentive programs whereby customers have the choice to receive free or discounted goods and services and, in many cases, the right to receive cash. Some of these customer loyalty incentive programs allow customers to earn points based on the volume of play during gaming transactions. These points are recorded as a separate deliverable in the revenue transaction.

If the customer has the right to receive free or discounted goods and services and/or the option of receiving cash, a financial liability is recognized when the points are granted and a corresponding amount equal to the cash value is recorded as a reduction to revenue. The customer’s point balance will be forfeited if the customer does not earn additional points over the subsequent six- to 12-month period. If the points expire or are forfeited, the financial liability is derecognized.

For programs that provide customers the right to receive free or discounted goods and services, the revenue, as determined by the fair value of the undelivered goods and services related to the customer loyalty award, is deferred until the award is provided or expires.

e. Direct expenses

Direct expenses are those costs that are directly incurred as part of operating the Southwest Gaming Bundle sites. Indirect expenses, which relate to corporate overhead costs and other costs that are not in control of sites’ direct operational management, are not reflected in the Combined Schedules. Judgement is required in determining what is a Direct expense.

f. Commissions

Commissions are recognized in the Combined Schedules in the period in which they are incurred. Commissions include payments to Municipalities which host a Casino or Slots facility and receive a percentage

F-122

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

of Electronic Games Revenue and Live Table Game Revenue as defined in the Municipal Contribution Agreements.

g. Property, plant and equipment

(i) Recognition and measurement

The Corporation capitalizes any capital purchase related to the Southwest Gaming Bundle that has a useful life beyond the current year.

Property, plant and equipment are measured at cost less accumulated amortization and accumulated impairment losses, if any.

Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self- constructed assets includes the cost of materials and direct labour and other costs directly attributable to bring the assets to a working condition for their intended use, the cost of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing costs on qualifying assets. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment related to the Southwest Gaming Bundle are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within Other income in the Combined Schedules.

(ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Corporation and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The cost of the day-to-day servicing of property, plant and equipment is recognized as incurred in the Combined Schedules.

(iii) Amortization

Amortization is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in the Combined Schedules on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are amortized over the shorter of the lease term and their estimated useful lives unless it is reasonably certain that the Corporation will obtain ownership by the end of the term of the lease.

The estimated useful lives for the current and comparative periods are as follows:

Asset	Rate
Buildings	10 to 50 years
Furniture, fixtures and equipment	3 to 10 years
Leasehold improvements	Lesser of useful life or term of lease
Slots and Casinos gaming assets	3 to 10 years

F-123

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

Property, plant and equipment are amortized when ready for their intended use. Construction in progress and assets not in use are stated at cost, less any recognized impairment loss. Amortization of these assets, determined on the same basis as other property assets, commences when the assets are ready for their intended use.

Amortization methods, useful lives and residual values are reviewed at each fiscal year end and adjusted if appropriate.

h. Leases

At the inception of an arrangement related to the Southwest Gaming Bundle, the Corporation determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the Corporation has the right to control the use of the underlying asset.

At the inception or upon the reassessment of the arrangement, the Corporation separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Corporation concludes that it is impracticable to separate the payments reliably under a finance lease, an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge on the liability is recognized using the Corporation’s incremental borrowing rate.

Leases where the Corporation assumes substantially all the risks and rewards of ownership are classified as finance leases. On a lease-by-lease basis, the Corporation estimates whether substantially all of the risks and rewards of ownership are assumed, taking into account the length of the lease, the present value of the minimum lease payments compared to the fair value of the leased asset and other terms contained within the lease.

Leases other than finance leases are classified as operating leases. Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease, except when another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

i. Employee benefits

(i) Defined benefit plans

A defined benefit plan is a post-employment benefit plan that requires entities to record their net obligation in respect of the plan and is not a defined contribution plan. The Corporation provides defined benefit pension plans to the employees of the Southwest Gaming Bundle through the Public Service Pension Fund (PSPF). The Corporation does not have a net obligation in respect of the defined benefit pension plan as the plan is a sole-sponsored defined benefit plan established by the Province of Ontario. The Province of Ontario controls all entities included in the pension plan. The Corporation has classified this plan as a state plan whereby there is no contractual agreement or stated policy for charging the net defined benefit cost of the plan to the Corporation. As such, the Corporation records these post-employment benefits as a defined contribution plan.

(ii) Other long-term employee benefits

The Corporation’s net obligation with respect to long-term employee benefits other than pension plans is the amount of future benefit that employees of the Southwest Bundle have earned in return for their service in the

F-124

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

current and prior periods. That benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Corporation’s obligations. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognized within Operating expenses in the Combined Schedules in the period in which they arise.

(iii) Short-term employee benefits

Short-term employee benefit obligations related to employees of the Southwest Gaming Bundle are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be settled wholly within 12 months of the end of the reporting period if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

j. Income taxes

As the Corporation is an agent of the Crown, it is not subject to federal or provincial corporate income taxes or corporate capital taxes.

k. Initial application of standards, interpretation and amendments

The Corporation did not adopt any new or amended accounting pronouncements that had a material impact on the Combined Schedules.

l. Accounting standards issued but not yet effective

A number of new accounting standards and amendments to standards are not yet effective as at March 31, 2017 and have not been applied in preparing these Combined Schedules.

(i) IFRS 15, Revenue from Contracts with Customers (IFRS 15)

In May 2014, the IASB issued IFRS 15, replacing IAS 11, Construction Contracts, IAS 18, Revenue and IFRIC 13, Customer Loyalty Programmes. The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized. In April 2016, clarifications to IFRS 15 were issued to provide additional guidance with respect to the five-step analysis, transition and the application of the standard to licences of intellectual property. IFRS 15 and the clarifications are mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

(ii) IFRS 9, Financial Instruments (IFRS 9)

In July 2014, the IASB issued the complete IFRS 9 which replaces IAS 39, Financial Instruments: Recognition and Measurement. The new standard provides guidance on the classification and measurement of financial assets and introduces a new expected credit loss model for calculating impairment. It also incorporates general hedge accounting requirements. IFRS 9 is mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

F-125

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

(iii) IFRS 16, Leases (IFRS 16)

In January 2016, the IASB issued IFRS 16, replacing IAS 17, Leases and IFRIC 4, Determining whether an arrangement contains a lease. The standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17. IFRS 16 is mandatorily effective for annual periods beginning on or after January 1, 2019. The Corporation is assessing the impact of this new standard on these Combined Schedules.

4. Non-gaming revenue

	March 31, 2017		March 31, 2016
Food and beverage	$	3,693,420	$	3,454,871
Other		229,049		237,257
Non-gaming revenue	$	3,922,469	$	3,692,128

5. Property, plant and equipment

	Land			Buildings			Furniture fixtures and equipment			Leasehold improvements			Slots and Casinos gaming assets			Construction in progress			Total
Cost
Balance at April 1, 2015	$	2,765,029		$	49,968,705		$	27,465,794		$	22,449,989		$	37,876,893		$	—		$	140,526,410
Additions and transfers		—			79,606			1,440,772			4,296,253			6,302,162			—			12,118,793
Disposals and retirements		—			(20,316	)		(1,281,968	)		—			(5,724,672	)		—			(7,026,956	)
Balance at March 31, 2016	$	2,765,029		$	50,027,995		$	27,624,598		$	26,746,242		$	38,454,383		$	—		$	145,618,247
Balance at April 1, 2016	$	2,765,029		$	50,027,995		$	27,624,598		$	26,746,242		$	38,454,383		$	—		$	145,618,247
Additions and transfers		—			274,644			(433,071	)		88,660			2,796,640			444,167			3,171,040
Disposals and retirements		—			—			(1,983,616	)		(1,636	)		(2,409,970	)		—			(4,395,222	)
Transfer to held for sale (Note 6)		(2,765,029	)		(50,302,639	)		(25,207,911	)		(26,833,266	)		(38,841,053	)		(444,167	)		(144,394,065	)
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Accumulated amortization
Balance at April 1, 2015	$	—		$	28,078,887		$	24,407,180		$	21,948,048		$	27,854,377		$	—		$	102,288,492
Amortization for the period		—			1,100,980			1,317,207			1,347,999			3,968,417			—			7,734,603
Disposals and retirements		—			(15,491	)		(1,278,347	)		—			(5,708,714	)		—			(7,002,552	)
Balance at March 31, 2016	$	—		$	29,164,376		$	24,446,040		$	23,296,047		$	26,114,080		$	—		$	103,020,543
Balance at April 1, 2016	$	—		$	29,164,376		$	24,446,040		$	23,296,047		$	26,114,080		$	—		$	103,020,543
Amortization for the period		—			569,735			838,201			1,301,269			2,702,386			—			5,411,591
Disposals and retirements		—			—			(1,757,010	)		(1,636	)		(2,409,961	)		—			(4,168,607	)
Transfer to held for sale (Note 6)		—			(29,734,111	)		(23,527,231	)		(24,595,680	)		(26,406,505	)		—			(104,263,527	)
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Carrying amounts
Balance at March 31, 2016	$	2,765,029		$	20,863,619		$	3,178,558		$	3,450,195		$	12,340,303		$	—		$	42,597,704
Balance at March 31, 2017	$	—		$	—		$	—		$	—		$	—		$	—		$	—

F-126

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

6. Disposal group held for sale

On December 13, 2016, OLG announced the selection of Gateway as the Service Provider for the Southwest Gaming Bundle. Under the terms of the Transition and Asset Purchase Agreement, OLG committed to sell certain assets and Gateway agreed to assume certain liabilities related to the sites in the bundle. Accordingly, on December 13, 2016, these assets and liabilities met the criteria to be classified as a disposal group held for sale and were measured at their carrying amount being the lower of their carrying amount and their fair value less costs to sell. Amortization of the property, plant and equipment of the bundle ceased when they were reclassified as held for sale. As a result, the Combined Schedules reflect amortization to December 13, 2016.

7. Other income

	March 31, 2017		March 31, 2016
Automated teller machines	$	3,706,705	$	3,689,841
Foreign exchange gain, net		210,848		196,302
Other miscellaneous income		166,409		71,440
Gain on disposal of property, plant and equipment, net		73,900		148,295
Other income	$	4,157,862	$	4,105,878

8. Related parties

The Corporation is related to various other government agencies, ministries and Crown corporations. Related party transactions include post-employment benefit plans with the Ontario Pension Board (Note 11.a), other long-term employee benefits with the Workplace Safety and Insurance Board.

All transactions with these related parties are in the normal course of operations and are measured at the exchange amounts, which are the amounts of consideration established and agreed to by the related parties.

9. Payments to the Government of Canada

As a prescribed registrant, the Corporation makes GST/HST remittances to the Government of Canada pursuant to the Games of Chance (GST/HST) Regulations of the Excise Tax Act. The Corporation’s net tax for a reporting period is calculated using net tax attributable to both gaming and non-gaming activities.

The net tax attributable to non-gaming activities is calculated in the same way as it is for any other GST/HST registrant in Canada. The non-recoverable GST/HST payable to suppliers and the additional imputed tax payable to the Government of Canada on gaming-related expenses were recognized as payments to the Government of Canada.

The net tax attributable to gaming activities results in a 26 per cent tax burden on most taxable gaming expenditures incurred by the Corporation.

F-127

ONTARIO LOTTERY AND GAMING CORPORATION

SOUTHWEST GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2017 and 2016

10. Operating expenses

	March 31, 2017		March 31, 2016
Slot operations	$	3,335,310	$	3,461,127
Table operations		126,333		123,487
Casino finance		568,515		551,630
Security and surveillance		285,190		321,112
General and administration(a)		1,131,242		155,416
Operating expenses	$	5,446,590	$	4,612,772

(a) As a Schedule 2 employer under the Workplace Safety and Insurance Act, 1997, (the Act), the Corporation is individually responsible for the full cost of accident claims filed by its workers. The Workplace Safety and Insurance Board (WSIB) maintains full authority over the claims entitlement process and administers and processes claims payments on the Corporation’s behalf. Included in general and administration expenses for the year ended March 31, 2017 is a WSIB actuarial loss of $576,047, compared to a gain for the year ended March 31, 2016 of $472,584.

11. Employee benefits

a. Other post-employment benefit plans

The annual contributions made to the PSPF by the Corporation are recorded as a payroll expense in the Combined Schedules. The Corporation’s contribution and pension expense related to employees of the Southwest Gaming Bundle for the year ended March 31, 2017 was $2,210,576 (year ended March 31, 2016—$2,139,263).

b. Other long-term employee benefits

As a Schedule 2 employer under the Workplace Safety and Insurance Act, 1997, (the Act), the Corporation is individually responsible for the full cost of accident claims filed by its workers. The Workplace Safety and Insurance Board (WSIB) maintains full authority over the claims entitlement process and administers and processes claims payments on the Corporation’s behalf.

12. Commitments

a. Obligation under operating lease

The Corporation has entered into operating leases for the facilities it occupies, and the related obligation expires in May 2017 on transfer to Gateway. Rent expense of $8,303,127 is included in facilities on the Combined Schedule of Revenues and Expenses for the year ended March 31, 2017 (year ended March 31, 2016—$8,920,159). The future minimum lease payments as at March 31, 2017 are $919,544.

13. Subsequent event

On May 9, 2017, OLG and Gateway entered into 20-year Casino Operating and Services Agreement for the Southwest Gaming Bundle. Gateway purchased the net assets of the Southwest Gaming Bundle, which included an estimate for working capital and took over day-to-day operations of the sites from OLG. Gateway is entitled to receive a share of the gaming revenue, as defined, generated at the Casino and Slot facilities it operates. The share of revenue owed to Gateway reflects the fixed fee, a variable fee (calculated as a percentage of gaming revenue above a set revenue threshold) and an amount for permitted capital expenditures.

F-128

ONTARIO LOTTERY AND GAMING CORPORATION

Combined Schedules of Revenues and Direct Expenses of the

CENTRAL GAMING BUNDLE

for the years ended March 31, 2018 and 2017

F-129

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Ontario Lottery and Gaming Corporation

We have audited the accompanying Combined Schedules of Revenues and Direct Expenses of the Central Gaming Bundle of Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2018 and 2017, and the related notes (the “Combined Schedules”).

Management’s Responsibility for the Combined Schedules

Management is responsible for the preparation and fair presentation of these Combined Schedules in accordance with the basis of preparation as described in note 2; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of Combined Schedules that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Combined Schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Combined Schedules. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Combined Schedules, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the entity’s preparation and fair presentation of the Combined Schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Combined Schedules.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Combined Schedules referred to above present fairly, in all material respects, the combined revenue and direct expenses of the Central Gaming Bundle of the Ontario Lottery and Gaming Corporation for each of the years ended March 31, 2018 and 2017 in accordance with the basis of presentation as described in note 2.

Emphasis of Matter

We draw attention to note 2, which describes that the accompanying Combined Schedules of Revenues and Direct Expenses of the Central Gaming Bundle of the Ontario Lottery and Gaming Corporation were prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018. The Combined Schedules are not intended to be a complete set of financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Our opinion is not modified with respect to this matter.

Chartered Professional Accountants, Licensed Public Accountants

November 16, 2018

Toronto, Canada

KPMG LLP, is a Canadian limited liability partnership and a member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

KPMG Canada provides services to KPMG LLP.

F-130

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

	Notes		March 31, 2018			March 31, 2017
Revenues
Gaming			$	526,666,069		$	508,856,593
Non-gaming		4		30,038,008			28,202,321
Total revenues				556,704,077			537,058,914
Direct expenses
Payroll				115,229,007			112,973,794
Commissions				5,522,592			5,184,953
Marketing and promotion				37,012,868			35,197,335
Operating		11		9,255,953			9,513,499
Facilities		9		29,373,983			40,361,958
Food and beverage				18,630,793			18,562,847
Hotel				1,331,202			1,088,679
Entertainment				13,192,871			13,594,135
Payments to the Government of Canada		10		23,329,352			23,553,083
Amortization		5		31,775,071			33,869,043
Other				60,362			35,962
Total direct expenses				284,714,054			293,935,288
Excess revenue over direct expenses				271,990,023			243,123,626
Other income		7		6,826,791			4,464,537
Finance costs		9		(6,139,801	)		—
Excess revenue over direct expenses and other income and finance costs			$	272,677,013		$	247,588,163

Related party transactions (Note 8)

Commitment (Note 13)

Subsequent event (Note 14)

The accompanying notes are an integral part of these Combined Schedules.

F-131

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

1. Reporting entity

Ontario Lottery and Gaming Corporation (“OLG” or the “Corporation”) was established without share capital on April 1, 2000 pursuant to the Ontario Lottery and Gaming Corporation Act, 1999. The Corporation is classified as an Operational Enterprise Agency of the Ontario government and is responsible for conducting and managing Land-Based Gaming, which includes, OLG-operated Slots and Casinos and Resort Casinos.

As part of the Corporation’s modernization strategy, the Corporation has bundled slots at racetracks, casino operations and resort casinos into gaming bundles. Following a successful procurement process, the bundles, which include the tangible assets, working capital and the right to operate and build, are transferred to private sector service providers.

The Central Gaming Bundle of OLG comprises Slots at Georgian Downs and Casino Rama Resort. The Corporation’s head office and corporate office, respectively, are located at:

• 70 Foster Drive, Suite 800, Sault Ste. Marie, Ontario, P6A 6V2

• 4120 Yonge Street, Suite 402, Toronto, Ontario, M2P 2B8

These Combined Schedules of Revenues and Direct Expenses for the Central Gaming Bundle of OLG were authorized for issue by the Board of Directors of the Corporation on November 16, 2018.

2. Basis of preparation

a. Statement of compliance

The Combined Schedules of Revenues and Direct Expenses of the Central Gaming Bundle of OLG for each of the years ended March 31, 2018 and 2017 (the “Combined Schedules”) have been prepared at the request of Gateway Casinos & Entertainment Limited (“Gateway”), which request indicated that the Combined Schedules were required in order for Gateway to comply with the Exemptive Relief provided to it by the United States Securities and Exchange Commission dated August 24, 2018.

The single Combined Schedules, comprised of revenues, direct costs and other income, of the Central Gaming Bundle of OLG for each of the years ended March 31, 2018 and 2017 are prepared in accordance with the recognition, measurement and disclosure principles of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) to the extent considered relevant by the Corporation’s management to preparing such Combined Schedules.

The Combined Schedules do not comply with all of the presentation and disclosure requirements of IFRS as issued by the IASB for a complete set of financial statements. As a result, the Combined Schedules are not a complete set of financial statements in accordance with IFRS as issued by the IASB and are not intended to present fairly, in all material respects, the financial position of the Central Gaming Bundle of OLG as at March 31, 2018 and 2017, and of its financial performance, and its cash flows for the two years then ended in accordance with IFRS as issued by the IASB.

b. Basis of measurement

These Combined Schedules have been prepared on the historical cost basis.

F-132

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

c. Functional and presentation currency

These Combined Schedules are presented in Canadian dollars. The Canadian dollar is the Central Gaming Bundle’s functional currency and the currency of the primary economic environment in which the Central Gaming Bundle operates.

d. Use of estimates and judgments

The preparation of these Combined Schedules in conformity with the recognition, measurement and disclosure principles of IFRS (Note 2.a) requires Management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of revenues and direct expenses and the disclosures relevant to the revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.

Areas of significant estimation and uncertainty that have a significant effect on the amounts recognized in the Combined Schedules, and could result in a material adjustment within the next fiscal year, are discussed in the following notes:

• Amortization—useful lives and residual values (Note 3.g)

• Capital lease obligation (Note 9)

• Employee benefits (Note 12)

Critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the Combined Schedules or disclosed in the Notes to the Combined Schedules are as follows:

• Direct expenses (Note 3.e)

• Disclosures that are relevant to revenue and direct expenses

3. Significant accounting policies

The following accounting policies have been applied consistently by the Corporation for the Combined Schedules for the years ended March 31, 2018 and March 31, 2017.

a. Basis of combination

The Combined Schedules comprise the accounts of the Corporation representing Slots at Georgian Downs and Casino Rama Resort; all of which belong to the Central Gaming Bundle.

b. Foreign currency

Transactions in foreign currencies are converted to the Corporation’s functional currency using the exchange rates at the date of the transactions. Foreign currency transaction gains and losses are recognized within Other income in the Combined Schedules in the period in which they arise.

F-133

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

c. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized for the following major business activities:

Gaming revenue

Gaming revenue includes revenue from slot and table game operations at the Slot facility and Resort Casino belonging to the Central Gaming Bundle. This is recognized in the same period the game is played, net of prizes paid. Gaming revenue is recorded net of the change in accrued jackpot liabilities and liabilities under customer loyalty incentive programs.

Progressive jackpot liabilities are measured based on the anticipated payout of the progressive jackpot.

Non-gaming revenue

Non-gaming revenue includes revenue earned from accommodations, food and beverage, entertainment centres, and other services excluding the retail value of accommodations, food and beverage and other goods and services provided to customers on a complimentary basis at the Slot facility and Resort Casino belonging to the Central Gaming Bundle. Non-gaming revenue is recorded at the retail value and is recognized as goods are delivered and services performed.

d. Customer loyalty incentive programs

The Corporation has customer loyalty incentive programs whereby customers have the choice to receive free or discounted goods and services and, in many cases, the right to receive cash. Some of these customer loyalty incentive programs allow customers to earn points based on the volume of play during gaming transactions. These points are recorded as a separate deliverable in the revenue transaction.

If the customer has the right to receive free or discounted goods and services and/or the option of receiving cash, a financial liability is recognized when the points are granted and a corresponding amount equal to the cash value is recorded as a reduction to revenue. The customer’s point balance will be forfeited if the customer does not earn additional points over the subsequent six- to 12-month period. If the points expire or are forfeited, the financial liability is derecognized.

For programs that provide customers the right to receive free or discounted goods and services, the revenue, as determined by the fair value of the undelivered goods and services related to the customer loyalty award, is deferred until the award is provided or expires.

e. Direct expenses

Direct expenses are those costs that are directly incurred as part of operating the Central Gaming Bundle sites. Indirect expenses, which relate to corporate overhead costs, certain costs retained by OLG and other costs that are not in control of sites’ direct operational management, are not reflected in the Combined Schedules. Judgement is required in determining what is a Direct expense.

f. Commissions

Commissions are recognized in the Combined Schedules in the period in which they are incurred. Commissions include payments to Municipalities which host a Slots facility and receive a percentage of Electronic Games Revenue and Live Table Game Revenue as defined in the Municipal Contribution Agreements.

F-134

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

g. Property, plant and equipment

(i) Recognition and measurement

The Corporation capitalizes any capital purchase related to the Central Gaming Bundle that has a useful life beyond the current year.

Property, plant and equipment are measured at cost less accumulated amortization and accumulated impairment losses, if any.

Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self- constructed assets includes the cost of materials and direct labour and other costs directly attributable to bring the assets to a working condition for their intended use, the cost of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing costs on qualifying assets. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment related to the Central Gaming Bundle are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within Other income in the Combined Schedules.

(ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Corporation and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The cost of the day-to-day servicing of property, plant and equipment is recognized as incurred in the Combined Schedules.

(iii) Amortization

Amortization is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in the Combined Schedules on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are amortized over the shorter of the lease term and their estimated useful lives unless it is reasonably certain that the Corporation will obtain ownership by the end of the term of the lease.

The estimated useful lives for the current and comparative periods are as follows:

Asset	Rate
Buildings	10 to 50 years
Furniture, fixtures and equipment	3 to 10 years
Leasehold improvements	Lesser of useful life or term of lease
Slots and Casino gaming assets	3 to 10 years

Property, plant and equipment are amortized when ready for their intended use. Construction in progress and assets not in use are stated at cost, less any recognized impairment loss. Amortization of these assets, determined on the same basis as other property assets, commences when the assets are ready for their intended use.

F-135

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

Amortization methods, useful lives and residual values are reviewed at each fiscal year end and adjusted if appropriate.

h. Leases

At the inception of an arrangement related to the Central Gaming Bundle, the Corporation determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the Corporation has the right to control the use of the underlying asset.

At the inception or upon the reassessment of the arrangement, the Corporation separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Corporation concludes that it is impracticable to separate the payments reliably under a finance lease, an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge on the liability is recognized using the Corporation’s incremental borrowing rate.

Leases where the Corporation assumes substantially all the risks and rewards of ownership are classified as finance leases. On a lease-by-lease basis, the Corporation estimates whether substantially all of the risks and rewards of ownership are assumed, taking into account the length of the lease, the present value of the minimum lease payments compared to the fair value of the leased asset and other terms contained within the lease. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance costs and the reduction of the outstanding liability. The finance costs is allocated to each period during the term of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Leases other than finance leases are classified as operating leases. Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease, except when another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

i. Employee benefits

(i) Defined contribution plans

The operator of Casino Rama has created a defined contribution pension plan for its employees. A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in the Combined Schedules in the periods during which services are rendered by the employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan, which are due more than 12 months after the end of the period in which the employees render the service, are discounted to their present value.

F-136

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

(ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan that requires entities to record their net obligation in respect of the plan and is not a defined contribution plan. The Corporation provides defined benefit pension plans to the employees of the Slots at Georgian Downs through the Public Service Pension Fund (PSPF). The Corporation does not have a net obligation in respect of the defined benefit pension plan as the plan is a sole- sponsored defined benefit plan established by the Province of Ontario. The Province of Ontario controls all entities included in the pension plan. The Corporation has classified this plan as a state plan whereby there is no contractual agreement or stated policy for charging the net defined benefit cost of the plan to the Corporation. As such, the Corporation records these post-employment benefits as a defined contribution plan.

(iii) Other long-term employee benefits

The Corporation’s net obligation with respect to long-term employee benefits other than pension plans is the amount of future benefit that employees of the Central Bundle have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Corporation’s obligations. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognized within Operating expenses in the Combined Schedules in the period in which they arise.

(iv) Short-term employee benefits

Short-term employee benefit obligations related to employees of the Central Gaming Bundle are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be settled wholly within 12 months of the end of the reporting period if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

j. Income taxes

As the Corporation is an agent of the Crown, it is not subject to federal or provincial corporate income taxes or corporate capital taxes.

k. Initial application of standards, interpretation and amendments

The Corporation did not adopt any new or amended accounting pronouncements that had a material impact on the Combined Schedules.

l. Accounting standards issued but not yet effective

A number of new accounting standards and amendments to standards are not yet effective as at March 31, 2018 and have not been applied in preparing these Combined Schedules.

(i) IFRS 15, Revenue from Contracts with Customers (IFRS 15)

In May 2014, the IASB issued IFRS 15, replacing IAS 11, Construction Contracts, IAS 18, Revenue and IFRIC 13, Customer Loyalty Programmes. The standard contains a single model that applies to contracts with

F-137

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

customers and two approaches to recognizing revenue: at a point in time or over time. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized. In April 2016, clarifications to IFRS 15 were issued to provide additional guidance with respect to the five-step analysis, transition and the application of the standard to licences of intellectual property. IFRS 15 and the clarifications are mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

(ii) IFRS 9, Financial Instruments (IFRS 9)

In July 2014, the IASB issued the complete IFRS 9 which replaces IAS 39, Financial Instruments: Recognition and Measurement. The new standard provides guidance on the classification and measurement of financial assets and introduces a new expected credit loss model for calculating impairment. It also incorporates general hedge accounting requirements. IFRS 9 is mandatorily effective for annual periods beginning on or after January 1, 2018. The Corporation is assessing the impact of this new standard on these Combined Schedules.

(iii) IFRS 16, Leases (IFRS 16)

In January 2016, the IASB issued IFRS 16, replacing IAS 17, Leases and IFRIC 4, Determining whether an arrangement contains a lease. The standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17. IFRS 16 is mandatorily effective for annual periods beginning on or after January 1, 2019. The Corporation is assessing the impact of this new standard on these Combined Schedules.

4. Non-gaming revenue

	March 31, 2018		March 31, 2017
Food and beverage	$	14,999,262	$	14,637,432
Hotel		6,129,226		5,060,933
Entertainment		8,735,588		8,340,955
Other		173,932		163,001
Non-gaming revenue	$	30,038,008	$	28,202,321

F-138

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

5. Property, plant and equipment

	Assets under Finance Lease (Note 9)		Furniture fixtures and equipment			Leasehold improvements			Slots and Casino gaming assets			Construction in progress and assets not yet in use			Total
Cost
Balance at April 1, 2016	$	—	$	85,090,467		$	350,961,707		$	119,457,199		$	1,133,000		$	556,642,373
Additions and assets put into use		—		6,411,296			6,122,614			8,801,903			5,138,285			26,474,098
Disposals and retirements		—		(5,676,008	)		(6,389,000	)		(8,644,579	)		—			(20,709,587	)
Balance at March 31, 2017	$	—	$	85,825,755		$	350,695,321		$	119,614,523		$	6,271,285		$	562,406,884
Balance at April 1, 2017	$	—	$	85,825,755		$	350,695,321		$	119,614,523		$	6,271,285		$	562,406,884
Additions and assets put into use		243,303,000		5,784,786			6,085,967			12,348,051			(6,269,885	)		261,251,919
Disposals and retirements		—		(24,977,562	)		(345,621,000	)		(30,031,506	)		—			(400,630,068	)
Transfer to held for sale (Note 6)		—		(66,632,979	)		(11,160,288	)		(101,931,068	)		(1,400	)		(179,725,735	)
Balance at March 31, 2018	$	243,303,000	$	—		$	—		$	—		$	—		$	243,303,000
Accumulated amortization
Balance at April 1, 2016	$	—	$	75,371,081		$	270,339,865		$	93,497,710		$	—		$	439,208,656
Amortization for the period		—		5,421,708			18,007,404			10,439,931			—			33,869,043
Disposals and retirements		—		(5,899,845	)		(5,368,000	)		(8,061,579	)		—			(19,329,424	)
Balance at March 31, 2017	$	—	$	74,892,944		$	282,979,269		$	95,876,062		$	—		$	453,748,275
Balance at April 1, 2017	$	—	$	74,892,944		$	282,979,269		$	95,876,062		$	—		$	453,748,275
Amortization for the period		8,026,000		5,140,805			8,855,673			9,752,593			—			31,775,071
Disposals and retirements		—		(25,973,312	)		(280,674,654	)		(28,410,506	)		—			(335,058,472	)
Transfer to held for sale (Note 6)		—		(54,060,437	)		(11,160,288	)		(77,218,149	)		—			(142,438,874	)
Balance at March 31, 2018	$	8,026,000	$	—		$	—		$	—		$	—		$	8,026,000
Carrying amounts
Balance at March 31, 2017	$	—	$	10,932,811		$	67,716,052		$	23,738,461 $			6,271,285		$	108,658,609
Balance at March 31, 2018	$	235,277,000	$	—		$	—		$	—		$	—		$	235,277,000

6. Disposal group held for sale

On March 14, 2018, OLG announced the selection of Gateway as the Service Provider for the Central Gaming Bundle. Under the terms of the Transition and Asset Purchase Agreement, OLG committed to sell certain assets and Gateway agreed to assume certain liabilities related to the sites in the bundle. Accordingly, on March 14, 2018, these assets and liabilities met the criteria to be classified as a disposal group held for sale and were measured at their carrying amount being the lower of their carrying amount and their fair value less costs to sell. Amortization of the property, plant and equipment that were transferred to Gateway ceased when they were reclassified as held for sale. As a result, the Combined Schedules reflect amortization to March 14, 2018.

7. Other income

	March 31, 2018			March 31, 2017
Automated teller machines	$	7,157,398		$	6,856,631
Foreign exchange gain, net		103,113			115,083
Other miscellaneous income		226,001			54,069
Loss on disposal of property, plant and equipment, net		(659,721	)		(2,561,246	)
Other income	$	6,826,791		$	4,464,537

F-139

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

8. Related parties

The Corporation is related to various other government agencies, ministries and Crown corporations. Related party transactions include post-employment benefit plans with the Ontario Pension Board (Note 12.b), other long-term employee benefits with the Workplace Safety and Insurance Board.

All transactions with these related parties are in the normal course of operations and are measured at the exchange amounts, which are the amounts of consideration established and agreed to by the related parties.

9. Chippewas of Mnjikaning (Rama) First Nation

On July 17, 2009, and as amended and restated on June 13, 2017, the Corporation and Chippewas of Rama First Nation entered into an agreement relating to Casino Rama for the 20-year period commencing August 1, 2011 and possible future development (the “Post-2011 Contract”). The Post-2011 Contract continues until July 31, 2031, subject to earlier terminations or the exercise by the Corporation of two successive options to extend for periods of 10 and 5 years, respectively.

The lands used for Casino Rama complex are leased under a 30-year ground lease which expires on January 31, 2047, from Her Majesty the Queen in Right of Canada by Casino Rama Inc., a wholly owned subsidiary of Chippewas of Rama First Nation. On June 13, 2017, the Corporation and Casino Rama Inc. entered into a new Complex Sublease (“Complex Sublease”), which aligns the term with the amended and restated Post-2011 Contract and consolidates previous leases for office and warehouse space, land lease, other additional parking lands and the employee parking lot. On May 1, 2018, the Chippewas of Rama First Nation Land Code came into effect, which transferred land administration for the reserve lands, and Her Majesty the Queen in Right of Canada’s interest in the ground lease, from Her Majesty the Queen in Right of Canada to the Chippewas of Rama First Nation pursuant to the First Nations Land Management Act.

In addition to annual rent payments, Chippewas of Rama First Nation are entitled to receive an annual fee (the “Rama fee”) from the Corporation for each successive 12-month period equal to the greater of 1.9% of the gross revenue of the Casino Rama complex, as defined, and $5,500,000. For accounting purposes, the agreements were determined to contain a finance lease.

In calculating the present value of minimum lease payments the $5,500,000 minimum gross revenue payments under the Post-2011 Contract, was considered in substance to be a payment of rent. A discount rate of 3.19 per cent was used and a term of 24 years. During the year ended March 31, 2018, $6,139,801 was included in the Combined Schedules as a finance cost.

During the year ended March 31, 2018, prior to the modification of the Complex Sublease and Post-2011 Contract, $5,634,908 (year ended March 31, 2017—$16,936,842) was expensed for land leases, rental of office and warehouse space and the Rama fee and is included in the Combined Schedules as facilities.

10. Payments to the Government of Canada

As a prescribed registrant, the Corporation makes GST/HST remittances to the Government of Canada pursuant to the Games of Chance (GST/HST) Regulations of the Excise Tax Act. The Corporation’s net tax for a reporting period is calculated using net tax attributable to both gaming and non-gaming activities.

F-140

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

The net tax attributable to non-gaming activities is calculated in the same way as it is for any other GST/HST registrant in Canada. The non-recoverable GST/HST payable to suppliers and the additional imputed tax payable to the Government of Canada on gaming-related expenses were recognized as payments to the Government of Canada.

The net tax attributable to gaming activities results in a 26 per cent tax burden on most taxable gaming expenditures incurred by the Corporation.

11. Operating expenses

	March 31, 2018		March 31, 2017
Slot operations	$	4,717,285	$	5,503,783
Table operations		1,479,308		1,671,914
Casino finance		598,253		607,859
Security and surveillance		339,638		376,527
General and administration		2,121,469		1,353,416
Operating expenses	$	9,255,953	$	9,513,499

12. Employee benefits

a. Defined contribution plans

The operator of Casino Rama has created defined contribution pension plans for its employees. The pension expense for Casino Rama’s defined contribution plan for the year ended March 31, 2018 amounted to $3,844,000 (year ended March 31, 2017— $3,833,000).

b. Other post-employment benefit plans

The annual contributions to the PSPF made by the Corporation are recorded as a payroll expense in the Combined Schedules. The Corporation’s contribution and pension expense related to employees of the Central Gaming Bundle for the year ended March 31, 2018 was $611,941 (year ended March 31, 2017—$582,763).

c. Other long-term employee benefits

As a Schedule 2 employer under the Workplace Safety and Insurance Act, 1997, (the Act), the Corporation is individually responsible for the full cost of accident claims filed by its workers. The Workplace Safety and Insurance Board (WSIB) maintains full authority over the claims entitlement process and administers and processes claims payments on the Corporation’s behalf.

The operator of Casino Rama is a Schedule 1 employers under the Act and is not subject to the financial reporting requirements of self-insured employers.

13. Commitment

a. Obligation under operating lease

The Corporation has entered into an operating lease for a facility it occupies, and the related obligation expires in July 2018 on transfer to Gateway. The future minimum lease payments as at March 31, 2018 are $1,499,824.

F-141

ONTARIO LOTTERY AND GAMING CORPORATION

CENTRAL GAMING BUNDLE

NOTES TO THE COMBINED SCHEDULES OF REVENUES AND DIRECT EXPENSES

For the years ended March 31, 2018 and 2017

14. Subsequent event

On July 18, 2018, OLG and Gateway entered into 23-year Casino Operating and Services Agreement for the Central Gaming Bundle. Gateway purchased the net assets of the Central Gaming Bundle, which included an estimate for working capital and took over day-to-day operations of the sites from OLG. Gateway is entitled to receive a share of the gaming revenue, as defined, generated at the Slot facility and Resort Casino it operates. The share of revenue owed to Gateway reflects the fixed fee, a variable fee (calculated as a percentage of gaming revenue above a set revenue threshold) and an amount for permitted capital expenditures.

F-142

INTRODUCTION

The following pro forma combined statements of operations and comprehensive income of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) reflect the combined historical results of Gateway and the three gaming bundles in Ontario (the North, Southwest and Central bundles), on a pro forma basis to give effect to the following transactions, which are described further below, as if they had occurred on January 1, 2017 or January 1, 2018 for operations purposes:

• Acquisition of the Central Ontario Gaming Bundle

• Acquisition of the Southwest Ontario Gaming Bundle

• Acquisition of the North Ontario Gaming Bundle

• Sale and Leaseback Transactions

• 2017 Refinancing;

• 2018 Refinancing; and

• Term Loan Upsize

The Company has presented separate pro forma schedule of revenue and direct expenses for each of the following gaming bundles to reflect the effect of the acquisitions by the Company under the terms of the applicable casino operating and service agreements (“COSA”) with the Ontario Lottery and Gaming Corporation (“OLG”), which have then been combined with the historical statements of operations and comprehensive income for the Company:

• Central Ontario Gaming Bundle for the year ended March 31, 2018, and the period from January 1, 2018 to July 17, 2018

• North Ontario Gaming Bundle for the period from January 1, 2017 to May 29, 2017; and

• Southwest Ontario Gaming Bundle for the period from January 1, 2017 to May 8, 2017

We believe that such presentation better facilitates understanding of pro forma effects of each of the above-mentioned transactions.

The pro forma data presented reflect events directly attributable to the described transactions and certain assumptions that the Company believes 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 below or which could be achieved in the future because they necessarily exclude various operating expenses, such as incremental general and administrative expenses associated with being a public company. 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.

F-143

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

For the nine months ended September 30, 2018

(expressed in thousands of Canadian dollars)

F-144

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

Introduction

The following unaudited pro forma combined statement of operations and comprehensive income for the nine months ended September 30, 2018 illustrates the effects of 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 and to the extent not reflected in the Company’s historical consolidated statement of operations and comprehensive income for the period:

a) Acquisition of the Central Bundle

On July 18, 2018, the Company signed a 23-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the Central Bundle. Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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 approximately $62.6 million plus net working capital of approximately $26.7 million.

	$
Cash and cash equivalents		30,302
Non-cash working capital		(3,570	)
Property and equipment		48,566
Intangible assets		14,034
		89,332

b) Sale and Leaseback Transactions

On December 15, 2017, the Company entered into a definitive agreement with Mesirow Realty Sale-Leaseback, Inc. (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, subsidiaries of Gateway entered into long-term leases, as tenants, for each of the SLB Properties. Annual lease payments under the long-term leases total $35.0 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 the Company’s 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 the Company’s available cash on hand was $nil.

c) 2018 Refinancing

On March 13, 2018, the Company refinanced (the “2018 Refinancing”) its prior senior secured credit facility (the “2017 Senior Secured Credit Facility”) by way of an amended and restated credit and guaranty agreement (the “A&R Credit Agreement”) for a new senior secured credit facility (the “2018 Senior Secured

F-145

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

Credit Facility”). The 2018 Senior Secured Credit Facility consists of a U.S.$335 million first lien secured term loan facility (the “2018 First Lien Term Loan Facility”) and an up to $150 million senior secured revolving credit facility (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.

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 the Company’s 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 the Company’s 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, the Company amended its 2018 Senior Secured Credit Facility pursuant to an amendment to the amended and restated credit and guaranty agreement (the “First Amendment to Amended and Restated Credit and Guaranty Agreement”) to increase its Term Loan B by US$105.0 million. Proceeds from the increase to the Term Loan B were primarily used to fund the acquisition of the Central Bundle $62.6 million. Assuming that the amendment was completed on January 1, 2018, the company would have recorded an additional $3.6 million in interest expenses for the nine months ended September 30, 2018. The additional interest expense is included in the pro forma adjustments disclosed in note 4(d). The approximate $0.5 million net interest adjustment included in the pro forma adjustment consists of two components, the additional approximate $3.5 million interest expense from the July 2018 Term Loan Upsize and the approximate $3.0 million reduction in interest expense from the 2018 Refinancing as if both transactions had occurred on January 1, 2018.

Pro forma adjustments for the Sale and Leaseback Transactions, the 2018 Refinancing and the Term Loan Upsize are reflected below as “Adjustments.”

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

The pro forma data presented reflect events directly attributable to the described transactions and certain assumptions that the Company believes are reasonable. The pro forma data is 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.

F-146

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the nine months ended September 30, 2018^{(Note 1)}

(expressed in thousands of Canadian dollars, except number of shares, expressed in thousands)

	Gateway (Historical)(2(a))			Central Bundle(2(b))		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
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(4(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(4(b))		31,559			2,671		(2,277	)		31,953
Writedown of non-financial assets		—			—		—			—
Other(4(c))		28,248			—		(9,407	)		18,841
Share-based compensation		8,441			—		—			8,441
	$	457,227		$	124,902	$	(3,323	)	$	578,806
(Loss) income before other expenses (income) and income taxes	$	27,050		$	20,327	$	3,323		$	50,700
Other expenses (income)
Interest expense(4(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(4(e))		21,388			—		(21,388	)		—
Gain on sale of property and equipment(4(f))		(192,373	)		—		192,399			26
Foreign exchange gain		25,480			—		—			25,480
	$	(129,842	)		—	$	171,578		$	41,736
Income before income taxes	$	156,892		$	20,327	$	(168,255	)	$	8,964
Income tax (expense) recovery(4(g))
Current		(1,321	)		—		—			(1,321	)
Deferred		661			—		—			661
Income and comprehensive income for the period	$	156,232		$	20,327	$	(168,255	)	$	8,304
Net Income per share Basic and Diluted										0.21
Weighted Average Shares Outstanding										39,402

The accompanying notes are an integral part of this unaudited pro forma combined statement of operations and comprehensive income.

F-147

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the nine months ended September 30, 2018

(expressed in thousands of Canadian dollars)

1 Basis of presentation

This unaudited pro forma combined statement of operations and comprehensive income of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) have been prepared by management for illustrative purposes only, to show the effect of the acquisition of the assets of the gaming bundle in Central Ontario (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 (the “Sale and Leaseback Transactions”), the refinancing of the senior secured credit facilities (the “2018 Refinancing”), and the amendment of the Company’s term loan facility within the senior secured credit facilities in connection with the acquisition of the Central Bundle (the “Term Loan Upsize”) (collectively, the “Transactions”), as described as above. The unaudited pro forma combined statement of operations and comprehensive income have been prepared as if the Transactions occurred on January 1, 2018.

2 The unaudited pro forma combined statement of operations and comprehensive income have been prepared using the following information, which have been adjusted to reflect the effects of the Transactions:

a) unaudited combined statement of operations and comprehensive income of Gateway for the nine months ended September 30, 2018, which includes the results of operations and comprehensive income from the Central Bundle from July 18, 2018 to September 30, 2018; and

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

The unaudited pro forma combined schedule of revenues and direct expenses for the Central Bundle for the period of January 1, 2018 to July 17, 2018 has been prepared by the Company using the format and account classifications of the audited Combined Schedules of Revenues and Direct Expenses of the Central Gaming Bundle for years ended March 31, 2018 and 2017 prepared or provided by the OLG. For purposes of this unaudited pro forma combined statement of operations and comprehensive income we have adjusted the format and account classifications to align with those of the Company.

F-148

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the nine months ended September 30, 2018

(expressed in thousands of Canadian dollars)

The following table reconciles between the two formats:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		125,993		(3,933	)		122,060
Facility Development Commissions / Permitted Capital Expenditures		—		3,933			3,933
Non-gaming Revenue		15,665		(15,665	)		—
Food and Beverage		—		7,723			7,723
Hotel		—		3,800			3,800
Automated Teller Machine		—		4,218			4,218
Other Revenue		—		3,495			3,495
Total Revenue		141,658		3,571			145,229
Direct Expenses
Payroll		61,668		—			61,668
Operating		7,213		7,222			14,435
Commissions		—		—			—
Hotel		717		(717	)		—
Entertainment		6,475		(6,475	)		—
GST/HST		—		—			—
Other		30		(30	)		—
Marketing and promotion		24,324		—			24,324
Facilities		12,583		—			12,583
Food and Beverage		9,221		—			9,221
Amortization		2,671		—			2,671
Total Direct Expenses		124,902		—			124,902
Excess Revenue over Direct Expenses		16,756		3,571			20,327
Other Income		3,571		(3,571	)		—
Excess revenue over Direct Expenses and Other Income and Finance Costs		20,327		—			20,327

3 Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined statement of operations and comprehensive income conform to the accounting policies adopted by the Company, which are in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the unaudited pro forma statement of revenue and direct expenses 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 International Accounting Standards Board.

F-149

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

For the nine months ended September 30, 2018

(expressed in thousands of Canadian dollars)

4 Pro forma adjustments

The following adjustments have been recorded in the unaudited pro forma combined statement of operations and comprehensive income financial statements 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, calculated on a straight-line basis over the term of the lease.

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

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

c) To eliminate transaction costs related to the 2018 Refinancing ($7,778) and the Central bundle acquisition ($1,629)

d) To adjust the amount of interest expense reported by the Company for the nine months ended September 30, 2018 to reflect the 2017 and 2018 Refinancing and the July 2018 Term Loan Upsize, 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

The unaudited pro forma combined statement of operations and comprehensive income have not been adjusted for changes in foreign exchange or estimates in the fair value of the cross currency interest rate swaps.

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

f) To eliminate the $192,399 gain on the Sale Lease Back transaction.

g) The Company did not record a pro forma tax effect of these adjustments as the deferred tax assets are not realizable.

F-150

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

December 31, 2017

(expressed in thousands of Canadian dollars)

F-151

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

Introduction

The following unaudited pro forma combined statement of operations and comprehensive income for the year ended December 31, 2017 illustrates the effects of the acquisitions of the Southwest Bundle, the North Bundle and the Central Bundle, the Sale and Leaseback Transactions, the 2018 Refinancing, the 2017 Refinancing and the Term Loan Upsize, as further described below, as if they had occurred on January 1, 2017 and to the extent that they are not fully reflected in the Company’s historical consolidated statement of operations and comprehensive income for the period.

a) Acquisition of the Southwest Bundle

On May 9, 2017, the Company signed a 20-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the Southwest Bundle. Under the Southwest Bundle transition and asset purchase agreement (“TAPA”), the Company 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 approximately $95.4 million, including net working capital of approximately $20.2 million comprised of cash, prepaids, inventory and accrued liabilities.

	$
Cash and cash equivalents		19,382
Non-cash working capital		775
Property and equipment		61,879
Intangible assets		13,388
		95,424

b) Acquisition of the North Bundle

On May 30, 2017, the Company signed a 20-year COSA with the OLG for the operation of the North Bundle. Under the North Bundle TAPA, the Company 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 approximately $79.3 million, including net working capital of approximately $10.3 million comprised of cash, prepaids, inventory and accrued liabilities.

	$
Cash and cash equivalents		10,688
Non-cash working capital		(424	)
Property and equipment		55,076
Intangible assets		14,009
		79,349

F-152

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

c) Acquisition of the Central Bundle

On July 18, 2018, the Company signed a 23-year COSA with the OLG for the operation of the Central Bundle. Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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 such assets was approximately $89.3 million, including net working capital of approximately $26.7 million, comprised of cash, prepaids, inventory and accrued liabilities.

	$
Cash and cash equivalents		30,302
Non-cash working capital		(3,570	)
Property and equipment		48,566
Intangible assets		14,034
		89,332

d) Sale and Leaseback Transactions

On December 15, 2017, the Company entered into a definitive agreement with Mesirow Realty Sale-Leaseback, Inc. (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, subsidiaries of Gateway entered into long-term leases, as tenants, for each of the SLB Properties. Annual lease payments under the long-term leases total $35.0 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 the Company’s 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 the Company’s available cash on hand was $nil.

e) 2017 Refinancing

On February 22, 2017, the Company refinanced (the “2017 Refinancing”) its credit facilities. The new debt structure included a $125.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), a senior secured term loan facility comprising of a US$405.0 million tranche (“Term Loan B-1”) and a $80.0 million tranche (“Term Loan B-2”) (collectively, “Term Loan B”), and US$255.0 million 8.25% Second Priority Senior Secured Notes due in 2024 (the “8.25% Notes”). The 2017 Refinancing closed in three tranches, (i) the first tranche closed on February 22, 2017 and the Company received US$232.5 and $46.0 million; (ii) the second tranche closed on May 5th (upon closing of the Southwest Bundle on May 9, 2017) and the Company received US$86.3 million and $17.0 million and, (iii) the third tranche closed upon acquiring the North Bundle in which the Company received US$86.2 million and $17.0 million. Total transaction costs incurred related to the 2017 Refinancing were $27.4 million. The proceeds from the 2017 Refinancing were used to repay the existing debt and fund the acquisition of the North Bundle and the Southwest Bundle.

F-153

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

f) 2018 Refinancing

On March 13, 2018, the Company refinanced (the “2018 Refinancing”) its prior senior secured credit facility (the “2017 Senior Secured Credit Facility”) by way of an amended and restated credit and guaranty agreement (the “A&R Credit Agreement”) for a new senior secured credit facility (the “2018 Senior Secured Credit Facility”). The 2018 Senior Secured Credit Facility consists of a U.S.$335 million first lien secured term loan facility (the “2018 First Lien Term Loan Facility”) and an up to $150 million senior secured revolving credit facility (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.

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 the Company’s 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 the Company’s 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.

g) Term Loan Upsize

On July 16, 2018, the Company amended its 2018 Senior Secured Credit Facility pursuant to an amendment to the amended and restated credit and guaranty agreement (the “First Amendment to Amended and Restated Credit and Guaranty Agreement”) to increase its Term Loan B by US$105.0 million. Proceeds from the increase to the Term Loan B were primarily used to fund the acquisition of the Central Bundle for $62.6 million. Assuming the amendment was completed on January 1, 2017, the Company would have recorded an additional $6.5 million in interest expenses for the year ended December 31, 2017.

Pro Forma adjustments as described in items a) through g) above are reflected below as “Adjustments.”

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

F-154

GATEWAY CASINOS & ENTERTAINMENT LIMITED

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the year ended December 31, 2017

(expressed in thousands of Canadian dollars, except number of shares, expressed in thousands)

	Gateway Historical (2(a))			Southwest Bundle Pro Forma (2(b))		North Bundle Pro Forma (2(c))		Central Bundle Pro Forma (2(d))		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 expenditures		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 (4(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 (4(b))		44,793			4,905		4,129		7,054		(11,875	)		49,006
Writedown of non-financial assets		23,588			—		—		—		—			23,588
Other (4(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 (4(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 (4(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

F-155

(expressed in thousands of Canadian dollars, except number of shares, expressed in thousands)

	Gateway Historical (2(a))			Southwest Bundle Pro Forma (2(b))		North Bundle Pro Forma (2(c))		Central Bundle Pro Forma (2(d))		Adjustments			Gateway Pro Forma
(Loss) income before income taxes	$	(65,441	)	$	12,816	$	3,924	$	46,364	$	(16,405	)	$	(18,742	)
Income tax (expense) recovery (4(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	)
Net loss per share Basic and Diluted														(0.47	)
Weighted Average Shares Outstanding														39,399

The accompanying notes are an integral part of these unaudited pro forma combined statement of operations and comprehensive income.

F-156

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2017

(expressed in thousands of Canadian dollars)

1 Basis of presentation

This unaudited pro forma combined statement of operations and comprehensive income of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) have been prepared by management for illustrative purposes only, to show the effect of the acquisition of the assets of the gaming bundles in Southwest Ontario (the “Southwest Bundle”), Northern Ontario (the “North Bundle”), and Central Ontario (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 (the “Sale and Leaseback Transactions”), and the refinancing of the senior secured credit facilities (the “2018 Refinancing” and the “2017 Refinancing”), and the amendment of the Company’s term loan facility within the senior secured credit facilities in connection with the acquisition of the Central Bundle (the “Term Loan Upsize”) (collectively, the “Transactions”). The unaudited pro forma combined statement of operations and comprehensive income have been prepared as if the Transactions occurred on January 1, 2017 for the purposes of the unaudited pro forma combined statement of operations and comprehensive income.

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

a) audited consolidated financial statements of Gateway for the year ended December 31, 2017, which include 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.

The unaudited pro forma combined schedules of revenues and direct expenses for the Southwest Bundle, the North Bundle and the Central Bundle have been prepared by the Company using the format and account classifications of the respective audited Combined Schedules of Revenues and Direct Expenses for each Bundle prepared or provided by the OLG. For purposes of this unaudited pro forma combined statement of operations and comprehensive income we have adjusted the format and account classifications to align with those of the Company.

F-157

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2017

(expressed in thousands of Canadian dollars)

The following table reconciles between the two formats for the Southwest Bundle:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		42,606		(1,666	)		40,940
Facility Development Commissions / Permitted Capital Expenditures		—		1,666			1,666
Non-gaming Revenue		1,375		(1,375	)		—
Food and Beverage		—		1,286			1,286
Automated Teller Machine		—		1,594			1,594
Other Revenue		—		250			250
Total Revenue		43,981		1,755			45,736
Direct Expenses
Payroll		17,048		—			17,048
Operating		3,194		—			3,194
Commissions		—		—			—
GST/HST		—		—			—
Marketing and promotion		1,915		—			1,915
Facilities		4,728		—			4,728
Food and Beverage		1,019		—			1,019
Amortization		5,016		—			5,016
Total Direct Expenses		32,920		—			32,920
Excess Revenue over Direct Expenses		11,061		1,755			12,816
Other Income		1,755		(1,755	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		12,816		—			12,816

F-158

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2017

(expressed in thousands of Canadian dollars)

The following table reconciles between the two formats for the North Bundle:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		29,363		(918	)		28,445
Facility Development Commissions / Permitted Capital Expenditures		—		918			918
Non-gaming Revenue		1,109		(1,109	)		—
Food and Beverage		—		969			969
Automated Teller Machine		—		943			943
Other Revenue		—		257			257
Total Revenue		30,472		1,060			31,532
Direct Expenses
Payroll		13,392		—			13,392
Operating		3,642		64			3,706
Commissions		—		—			—
GST/HST		—		—			—
Other		64		(64	)		—
Marketing and promotion		1,589		—			1,589
Facilities		3,977		—			3,977
Food and Beverage		755		—			755
Amortization		4,189		—			4,189
Total Direct Expenses		27,608		—			27,608
Excess Revenue over Direct Expenses		2,864		1,060			3,924
Other Income		1,060		(1,060	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		3,924		—			3,924

F-159

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2017

(expressed in thousands of Canadian dollars)

The following table reconciles between the two formats for the Central Bundle:

	OLG Format Pro Forma		Adjustments			Gateway Format Pro Forma
	$		$			$
Revenue
Gaming Revenue		255,140		(7,250	)		247,890
Facility Development Commissions / Permitted Capital Expenditures		—		7,250			7,250
Non-gaming Revenue		30,038		(30,038	)		—
Food and Beverage		—		14,999			14,999
Hotel		—		6,129			6,129
Automated Teller Machine		—		7,157			7,157
Other Revenue		—		8,580			8,580
Total Revenue		285,178		6,827			292,005
Direct Expenses
Payroll		115,412		—			115,412
Operating		12,499		14,584			27,083
Commissions		—		—			—
Hotel		1,331		(1,331	)		—
Entertainment		13,193		(13,193	)		—
GST/HST		—		—			—
Other		60		(60	)		—
Marketing and promotion		38,687		—			38,687
Facilities		38,774		—			38,774
Food and Beverage		18,631		—			18,631
Amortization		7,054		—			7,054
Total Direct Expenses		245,641		—			245,641
Excess Revenue over Direct Expenses		39,537		6,827			46,364
Other Income		6,827		(6,827	)		—
Finance Costs							—
Excess revenue over Direct Expenses and Other Income and Finance Costs		46,364		—			46,364

3 Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined statement of operations and comprehensive income conforms to the accounting policies adopted by the Company, which are in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the unaudited combined schedule of revenues and direct expenses for each of 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

F-160

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2017

(expressed in thousands of Canadian dollars)

March 31, 2018, do not include certain information and adjustments necessary to conform with IFRS as issued by the International Accounting Standards Board.

4 Pro forma adjustments

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 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 recorded by the Company 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 related to the acquisition of North Bundle ($2,553) and Southwest Bundle ($3,185).

d) To adjust the amount of interest expense reported by the Company for the year ended December 31, 2017 to reflect the 2017 and 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

The unaudited pro forma combined statement of operations and comprehensive income have not been adjusted for changes in foreign exchange or estimates in the fair value of the cross currency interest rate swaps.

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

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

F-161

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the Period from January 1, 2018 to July 17, 2018

(expressed in thousands of Canadian dollars)

F-162

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

Introduction

On July 18, 2018, Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) signed a 23-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the Central Ontario Gaming Bundle (the “Central Bundle”). The purchase price for the Central Bundle properties was approximately $89.3 million, including net working capital of approximately $26.7 million, comprised of cash, prepaids, inventory and accrued liabilities. Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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.

Under the terms of the COSA, the Company executed the operations relating to the gaming properties, while the OLG retained the authority to conduct and manage the gaming and lottery schemes carried out at the gaming properties. The Company received a commission equal to a share of the gaming revenue for operating the gaming properties, equal to 70% of the gaming revenue from Central Bundle properties in excess of a guaranteed threshold amount to the OLG, subject to a minimum payable to the Company.

Additionally, the Company is entitled to a Permitted Capital Expenditure Allowance, payable by the OLG, for a proportion of permitted capital expenditures that the Company incurs in the various gaming zones located in the Central Bundle. The amount of the Permitted Capital Expenditure Allowance payable to the Company by the OLG in the first operating year will be specified in the COSA. The Permitted Capital Expenditure Allowance payable in subsequent operating years will increase according to a pre-determined inflation rate.

This unaudited pro forma combined schedule of revenue and direct expenses of the Central Bundle has been prepared for illustrative purposes only, to show the effect of the acquisition of the assets of the Central Bundle as if the Company acquired the Central Bundle on January 1, 2018 and the terms of the first operating year under the COSA were in effect for the period.

The assumptions and estimates underlying the unaudited adjustments to the pro forma combined schedule of revenues and direct expenses are described in the accompanying notes, which should be read together with the pro forma combined schedule of revenues and direct expenses. The pro forma data presented reflect events directly attributable to the described transaction and certain assumptions that the Company believes 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 combined schedule of revenue and direct expenses.

F-163

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the Period from January 1, 2018 to July 17, 2018

(expressed in thousands of Canadian dollars)

	Central Bundle			Adjustments			Pro Forma
	$			$			$
Revenue
Gaming Revenue (Notes 3(a) and 3(e))		268,122			(142,129	)		125,993
Non-gaming Revenue		15,665			—			15,665
Total Revenue		283,787			(142,129	)		141,658
Direct Expenses
Payroll (Note 3(b))		61,544			124			61,668
Commissions (Note 3(c))		3,089			(3,089	)		—
Marketing and promotion (Note 3(e))		23,616			708			24,324
Operating (Note 3(d))		5,454			1,759			7,213
Facilities (Note 3(f))		5,856			6,727			12,583
Food and Beverage		9,221			—			9,221
Hotel		717			—			717
Entertainment		6,475			—			6,475
GST/HST (Note 3(g))		11,461			(11,461	)		—
Amortization (Note 3(h))		6,652			(3,981	)		2,671
Other		30			—			30
Total Direct Expenses		134,115			(9,213	)		124,902
Excess Revenue over Direct Expenses		149,672			(132,916	)		16,756
Other Income		3,571			—			3,571
Finance Costs (Note 3(i))		(8,433	)		8,433			—
Excess revenue over Direct Expenses and Other Income and Finance Costs		144,810			(124,483	)		20,327

The accompanying notes are an integral part of this unaudited pro forma combined schedule of revenues and direct expenses.

F-164

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the Period from January 1, 2018 to July 17, 2018

(expressed in thousands of Canadian dollars)

1    Basis of presentation

This unaudited pro forma combined schedule of revenue and direct expenses of the Central Ontario Gaming Bundle (the “Central Bundle”) has been prepared by management of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) for illustrative purposes only, to show the effect of the proposed acquisition of the assets of the Central Bundle by the Company (the “Transaction”) as described in Note 2. The unaudited pro forma schedule of revenues and direct expenses has been prepared as if the Company acquired the Central Bundle on January 1, 2018 and the terms of the first operating year under the casino operating and service agreement (“COSA”) were in effect for the period.

The unaudited pro forma combined schedule of revenues and direct expenses has been prepared using site-level financial information prepared or provided by Ontario Lottery and Gaming Corporation (“OLG”) management for the period from January 1 to July 17, 2018 (the “Bundle Statements”) with adjustments made by the Company as noted above and has not been audited or reviewed by outside auditors. The Bundle Statements do not include certain information and adjustments necessary to conform with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Readers should not place undue reliance on this information.

2     Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined schedule of revenues and direct expenses conform to the accounting policies adopted by the Company, which are in compliance with IFRS as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the site-level financial information prepared or provided by OLG management for the period from January 1 to July 17, 2018 with adjustments made by the Company as noted above does not include certain information and adjustments necessary to conform with IFRS as issued by the International Accounting Standards Board.

3    Pro forma adjustments

The following adjustments have been recorded in the unaudited pro forma combined schedule of revenues and direct expenses to reflect the pro forma effects of the Transaction described above:

a) To adjust the gaming revenue and revenue from permitted capital expenditure to reflect the terms of the COSA as if the Company had operated the Central Bundle properties for the entire period. The calculation of the adjustment is based on the guaranteed threshold amount to the OLG, guaranteed minimum commission to the Company and amount of the Permitted Capital Expenditure Allowance for the first operating year of the COSA, each as set out in the COSA.

b) Most employers in Ontario are required to register with the Workplace Safety and Insurance Board (the “WSIB”) and provide coverage for work-related injuries for all employees in Ontario. The Workplace Safety and Insurance Act (Ontario) provides for different methods of insurance coverage depending on the type of company. The OLG, as a Crown Corporation of the Ontario government, is a Schedule 2 employer and must individually pay the total cost of injury benefits for its employees. The OLG prepares an actuarial assessment of its liability at the end of each fiscal period and makes adjustments to its liability reserves for current service costs and changes to past service costs. Gateway is a Schedule 1 employer and will be required to pay annual premiums to an insurance fund covering all Schedule 1 employers. The amount of premium will be based on the WSIB’s classification of the employer’s business activity and the employer’s total insurable payroll. The Casino Rama Resort was operated by a third party private operator under an

F-165

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the Period from January 1, 2018 to July 17, 2018

(expressed in thousands of Canadian dollars)

operating agreement with the OLG (which agreement terminated upon closing of the acquisition by the Company). This operator is also a Schedule 1 employer. Accordingly, no adjustment is necessary for costs associated with the Casino Rama Resort.

Applying the expected appropriate premium rate to the insurable wages for the Georgian Downs property included in the Central Bundle results in a higher expense for Gateway as follows:

	$
Estimated WSIB expense for the Company		127
WSIB expense reported by OLG for the period		(3	)
WSIB adjustment		124

The estimated WSIB expense for the Company is based on a prescribed rate of $2.05 per $100 of insurable earnings, assuming that 85% of total salaries and wages would be insurable.

c) The Bundle Statements include commissions payable to host local governments in operating expenses. Such expenses continue to be the responsibility of the OLG under the COSA and will not be paid by Gateway. Total commissions paid to host local governments during the period were $3,089.

d) The Alcohol and Gaming Commission of Ontario (the “AGCO”) is responsible for the regulation of casinos, charity casinos and slot machine facilities in Ontario. The AGCO has contracted with the Ontario Provincial Police (the “OPP”) to provide certain regulatory services within casinos and slot machine facilities. The AGCO charges each casino or slot machine facility for certain costs, including annual registration fees and the cost of OPP services. The OLG has not recorded these AGCO charges in the Bundle Statements. The Company will be required to pay these charges and such charges will form part of the operating expenses of the Central Bundle properties. The OLG paid the AGCO an estimated $1,759 for the Central Bundle properties during the period.

e) The OLG presents gaming revenue in the Bundle Statements net of the costs of cash incentives, whereas the Company records cash incentives as marketing expenses. An adjustment is necessary to reclassify the cost of cash incentives incurred by the OLG from gaming revenue to marketing expenses to conform to the Company’s accounting policies. The OLG incurred $708 in cost of cash incentives during the period.

f) The Bundle Statements include certain expenses that were recorded by the OLG under an existing lease agreement with the Rama First Nations for the use of certain facilities and land. The lease was reclassified by the OLG as a capital lease in June 2017. Such expenses continue to be the responsibility of the OLG, has enter into a sublease agreement with the Company. Adjustments are made to reverse the capitalized lease impact on amortization ($5,509) and finance costs ($8,433) recorded by the OLG, and record the amounts payable by the Company under the new sublease agreement for the period ($6,727).

g) The OLG is a ‘Prescribed Registrant’ under the purposes of subsection 188(5) of the Excise Tax Act and is subject to Regulations pursuant to which the OLG is required to pay Harmonized Sales Tax (“HST”) on the total gross gaming revenue. The OLG reports any such HST paid as an expense in the Bundle Statements. Gateway is not a Prescribed Registrant and is subject to the Regulations. The total HST paid by the OLG on gross gaming revenue for the period was $11,461.

F-166

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the Period from January 1, 2018 to July 17, 2018

(expressed in thousands of Canadian dollars)

h) To decrease depreciation of property and equipment by $3,981 for the year to conform to the Company’s depreciation policy. Depreciation expense was calculated based on the estimated fair value of the acquired property and equipment with useful lives as follows:

Equipment	1 - 2 years
Leasehold improvements	term of the related lease

i) Financing costs represents interest under capital leases, which no longer exist. The pro forma interest burden has been recorded at the corporate level in conjunction with the refinancings.

F-167

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the year ended March 31, 2018

(expressed in thousands of Canadian dollars)

F-168

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

Introduction

On July 18, 2018, Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) signed a 23-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the Central Ontario Gaming Bundle (the “Central Bundle”). Under the Central Bundle agreements, we purchased the assets of the Central Gaming 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 will be approximately $89.3 million, including net working capital of approximately $26.7 million, comprised of cash, prepaids, inventory and accrued liabilities.

Under the terms of the COSA, the Company executed the operations relating to the gaming properties, while the OLG retained the authority to conduct and manage the gaming and lottery schemes carried out at the gaming properties. The Company received a commission equal to a share of the gaming revenue for operating the gaming properties, equal to 70% of the gaming revenue from Central Bundle properties in excess of a guaranteed threshold amount to the OLG, subject to a minimum payable to the Company.

Additionally, the Company is entitled to a Permitted Capital Expenditure Allowance, payable by the OLG, for a proportion of permitted capital expenditures that the Company incurs in the various gaming zones located in the Central Bundle. The amount of the Permitted Capital Expenditure Allowance payable to the Company by the OLG in the first operating year will be specified in the COSA. The Permitted Capital Expenditure Allowance payable in subsequent operating years will increase according to a pre-determined inflation rate.

This unaudited pro forma combined schedule of revenue and direct expenses of the Central Bundle has been prepared for illustrative purposes only, to show the effect of the acquisition of the assets of the Central Bundle as if the Company acquired the Central Bundle on April 1, 2017 (the first day of the fiscal year of the OLG) and the terms of the first operating year under the COSA were in effect for the period.

The assumptions and estimates underlying the unaudited adjustments to the unaudited pro forma combined schedule of revenues and direct expenses are described in the accompanying notes, which should be read together with the unaudited pro forma combined schedule of revenues and direct expenses. The pro forma data presented reflect events directly attributable to the described transaction and certain assumptions that the Company believes 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 combined schedule of revenues and direct expenses.

F-169

GATEWAY CASINOS & ENTERTAINMENT LIMITED

CENTRAL ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the year ended March 31, 2018

(expressed in thousands of Canadian dollars)

	Central Bundle			Adjustments			Pro Forma
	$			$			$
Revenue
Gaming Revenue (notes 3(a) and 3(e))		526,666			(271,526	)		255,140
Non-gaming Revenue		30,038			—			30,038
Total Revenue		556,704			(271,526	)		285,178
Direct Expenses
Payroll (note 3(b))		115,229			183			115,412
Commissions (note 3(c))		5,523			(5,523	)		—
Marketing and promotion (note 3(e))		37,013			1,674			38,687
Operating (notes 3(d))		9,256			3,243			12,499
Facilities (note 3(f))		29,374			9,400			38,774
Food and Beverage		18,631			—			18,631
Hotel		1,331			—			1,331
Entertainment		13,193			—			13,193
GST/HST (note 3(g))		23,329			(23,329	)		—
Amortization (note 3(f) and (h))		31,775			(24,721	)		7,054
Other		60			—			60
Total Direct Expenses		284,714			(39,073	)		245,641
Excess Revenue over Direct Expenses		271,990			(232,453	)		39,537
Other Income		6,827			—			6,827
Finance Costs (Note 3(f))		(6,140	)		6,140			—
Excess revenue over Direct Expenses and Other Income and Finance Costs		272,677			(226,313	)		46,364

The accompanying notes are an integral part of this unaudited pro forma combined schedule of revenues and direct expenses.

F-170

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the year ended March 31, 2018

(expressed in thousands of Canadian dollars)

1    Basis of presentation

This unaudited pro forma combined schedule of revenues and direct expenses of the Central Ontario Gaming Bundle (the “Central Bundle”) has been prepared by management of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) for illustrative purposes only, to show the effect of the acquisition of the assets of the Central Bundle by the Company (the “Transaction”). The unaudited pro forma combined schedule of revenues and expenses has been prepared as if the Company acquired the Central Bundle on April 1, 2017 and the terms of the first operating year under the casino operating and service agreement (“COSA”) were in effect for the period.

The unaudited pro forma combined schedule of revenues and direct expenses has been prepared using the audited combined schedule of revenues and direct expenses of the Central Bundle, (the “Bundle Statements”) as prepared and provided by Ontario Lottery and Gaming Corporation (“OLG”). The Bundle Statements do not include certain information and adjustments necessary to conform with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Readers should not place undue reliance on this information.

2    Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined schedule of revenues and direct expenses conform to the accounting policies adopted by the Company, which are in compliance with IFRS as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the Bundle Statements do not include certain information and adjustments necessary to conform with IFRS as issued by the International Accounting Standards Board.

3    Pro forma adjustments

The following adjustments have been recorded in the unaudited pro forma combined schedule of revenues and direct expenses to reflect the pro forma effects of the Transaction described above:

a) To adjust the gaming revenue and revenue from permitted capital expenditure to reflect the terms of the COSA as if the Company had operated the Central Bundle properties for the entire period. The calculation of the adjustment is based on the guaranteed threshold amount to the OLG, guaranteed minimum commission to the Company and amount of the Permitted Capital Expenditure Allowance for the first operating year of the COSA, each as set out in the COSA.

b) Most employers in Ontario are required to register with the Workplace Safety and Insurance Board (the “WSIB”) and provide coverage for work-related injuries for all employees in Ontario. The Workplace Safety and Insurance Act (Ontario) provides for different methods of insurance coverage depending on the type of company. The OLG, as a Crown Corporation of the Ontario government, is a Schedule 2 employer and must individually pay the total cost of injury benefits for its employees. The OLG prepares an actuarial assessment of its liability at the end of each fiscal period and makes adjustments to its liability reserves for current service costs and changes to past service costs. Gateway is a Schedule 1 employer and is required to pay annual premiums to an insurance fund covering all Schedule 1 employers. The amount of premium is based on the WSIB’s classification of the employer’s business activity and the employer’s total insurable payroll. The Casino Rama Resort was previously operated by a third-party private operator under an operating agreement with the OLG (which terminated upon closing of the acquisition by the Company).

F-171

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the year ended March 31, 2018

(expressed in thousands of Canadian dollars)

This operator was also a Schedule 1 employer. Accordingly, no adjustment is necessary for costs associated with the Casino Rama Resort.

Applying the expected appropriate premium rate to the insurable wages for the Gateway Casinos Innisfil property included in the Central Bundle results in a higher expense for Gateway as follows:

	$
Estimated WSIB expense for the Company		230
WSIB expense reported by OLG for the year		(47	)
WSIB adjustment		183

The estimated WSIB expense for the Company is based on a prescribed rate of $2.05 per $100 of insurable earnings, assuming that 85% of total salaries and wages would be insurable.

c) The Bundle Statements include commissions payable to host local governments in operating expenses. Such expenses continue to be the responsibility of the OLG under the COSA and will not be paid by Gateway. Total commissions paid to host local governments during the period were $5,523.

d) The Alcohol and Gaming Commission of Ontario (the “AGCO”) is responsible for the regulation of casinos, charity casinos and slot machine facilities in Ontario. The AGCO has contracted with the Ontario Provincial Police (the “OPP”) to provide certain regulatory services within casinos and slot machine facilities. The AGCO charges each casino or slot machine facility for certain costs, including annual registration fees and the cost of OPP services. The OLG has not recorded these AGCO charges in the Bundle Statements. The Company is required to pay these charges and such charges form part of the operating expenses of the Central Bundle properties. The OLG paid the AGCO an estimated $3,243 for the Central Bundle properties during the year.

e) The OLG presents gaming revenue in the Bundle Statements net of the costs of cash incentives, whereas the Company records cash incentives as marketing expenses. An adjustment is necessary to reclassify the cost of cash incentives incurred by the OLG from gaming revenue to marketing expenses to conform to the Company’s accounting policies. The OLG incurred $1,674 in cost of cash incentives during the year.

f) The Bundle Statements include certain expenses that were recorded by the OLG under an existing lease agreement with the Rama First Nations for the use of certain facilities and land. The lease was reclassified by the OLG as capital lease in June 2017. Such expenses will continue to be the responsibility of the OLG, who has entered into a new sublease agreement with the Company. Adjustments were made to reverse the operating lease expenses ($3,000) paid by OLG before the reclassification and record occupancy expenses payable by the Company under the new sublease agreement with the OLG ($12,400) for a net adjustment of $9,400. Additional adjustments were made to reverse the capitalized lease impact on amortization ($8,026) and finance costs ($6,140) recorded by the OLG.

g) The OLG is a ‘Prescribed Registrant’ for the purposes of subsection 188(5) of the Excise Tax Act and is subject to Regulations pursuant to which the OLG is required to pay Harmonized Sales Tax (“HST”) on the total gross gaming revenue. The OLG reports any such HST paid as an expense in the Bundle Statements. Gateway is not a Prescribed Registrant and is not subject to the Regulations. The total HST paid by the OLG on gross gaming revenue for the year was $23,329.

F-172

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE CENTRAL ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the year ended March 31, 2018

(expressed in thousands of Canadian dollars)

h) To decrease depreciation of property and equipment by $24,721 for the year to conform to the Company’s depreciation policy. Depreciation expense was calculated based on the estimated fair value of the acquired property and equipment with useful lives as follows:

Equipment	1 – 2 years
Leasehold improvements	term of the related lease

i) Financing costs represents interest under capital leases, which no longer exist. The pro forma interest burden has been recorded at the corporate level in conjunction with the refinancings.

F-173

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NORTH ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 29, 2017

F-174

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NORTH ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

Introduction

On May 30, 2017, Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) signed a 20-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the North Ontario Gaming Bundle (the “North Bundle”). Under the North Bundle transition and asset purchase agreement (the “TAPA”), the Company 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 approximately $79.3 million, including net working capital of approximately $10.3 million comprised of cash, prepaids, inventory and accrued liabilities.

Under the terms of the COSA, the Company executed the operations relating to the gaming properties, while the OLG retained the authority to conduct and manage the gaming and lottery schemes carried out at the gaming properties. The Company received a commission equal to a share of the gaming revenue for operating the gaming properties, equal to 70% of the gaming revenue from North Bundle properties in excess of a guaranteed threshold amount to the OLG, subject to a minimum payable to the Company.

Additionally, the Company is entitled to a Permitted Capital Expenditure Allowance, payable by the OLG, for a proportion of permitted capital expenditures that the Company incurs in the various gaming zones located in the North Bundle. The amount of the Permitted Capital Expenditure Allowance payable to the Company by the OLG in the first operating year is specified in the COSA. The Permitted Capital Expenditure Allowance payable in subsequent operating years will increase according to a pre-determined inflation rate.

This unaudited pro forma combined schedule of revenues and direct expenses of the North Bundle has been prepared for illustrative purposes only, to show the effect of the acquisition of the assets of the North Bundle as if the Company acquired the North Bundle on January 1, 2017 and the terms of the first operating year under the COSA were in effect for the period.

The assumptions and estimates underlying the unaudited adjustments to the pro forma combined schedule of revenues and direct expenses are described in the accompanying notes, which should be read together with the unaudited pro forma combined schedule of revenues and direct expenses. The pro forma data presented reflect events directly attributable to the described transaction and certain assumptions that the Company believes 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 combined schedule of revenue and direct expenses.

F-175

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NORTH ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 29, 2017

(expressed in thousands of Canadian dollars)

	North Bundle			Adjustments			Pro Forma
	$			$			$
Revenue
Gaming Revenue (notes 3(a) and 3(f))		48,373			(19,010	)		29,363
Non-gaming Revenue		1,109			—			1,109
Total Revenue		49,482			(19,010	)		30,472
Direct Expenses
Payroll (notes 3(b) and 3(c))		14,704			(1,312	)		13,392
Commissions (notes 3(d))		2,522			(2,522	)		—
Marketing and promotion (note 3(f))		1,314			275			1,589
Operating (note 3(e))		2,430			1,212			3,642
Facilities		3,977			—			3,977
Food and Beverage		755			—			755
GST/HST (note 3(g))		1,811			(1,811	)		—
Amortization (note 3 (h) and (i))		(6	)		4,195			4,189
Other		64			—			64
Total Direct Expenses		27,571			37			27,608
Excess Revenue over Direct Expenses		21,911			(19,047	)		2,864
Other Income		1,060			—			1,060
Finance Costs		—			—			—
Excess revenue over Direct Expenses and Other Income and Finance Costs		22,971			(19,047	)		3,924

The accompanying notes are an integral part of this unaudited pro forma combined schedule of revenues and direct expenses.

F-176

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE NORTH ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 29, 2017

(expressed in thousands of Canadian dollars)

1    Basis of presentation

This unaudited pro forma combined schedule of revenues and direct expenses of the North Ontario Gaming Bundle (the “North Bundle”) has been prepared by management of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) for illustrative purposes only, to show the effect of the acquisition of the assets of the North Bundle by the Company (the “Transaction”). The unaudited pro forma combined schedule of revenues and direct expenses has been prepared as if the Company acquired the North Bundle on January 1, 2017 and the terms of the first operating year under the casino operating and service agreement (“COSA”) were in effect for the period.

The unaudited pro forma combined schedule of revenues and direct expenses has been prepared using site-level financial information prepared by Ontario Lottery and Gaming Corporation (“OLG”) management for the period from January 1, 2017 to May 29, 2017 (the “Bundle Statements”) with adjustments made by the Company as noted above and has not been audited or reviewed by outside auditors. The Bundle Statements do not include certain information and adjustments necessary to conform with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Readers should not place undue reliance on this information.

2    Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined schedule of revenues and direct expenses conform to the accounting policies adopted by the Company, which are in compliance with IFRS as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the Bundle Statements with adjustments made by the Company as noted above do not include certain information and adjustments necessary to conform with IFRS as issued by the International Accounting Standards Board.

3    Pro forma adjustments

The following adjustments have been recorded in the unaudited pro forma combined schedule of revenues and direct expenses to reflect the pro forma effects of the Transaction described above:

a) To adjust the gaming revenue and revenue from permitted capital expenditure to reflect the terms of the COSA as if the Company had operated the North Bundle properties for the entire period. The calculation of the adjustment is based on the guaranteed threshold amount to the OLG, guaranteed minimum commission to the Company and amount of the Permitted Capital Expenditure Allowance for the first operating year of the COSA, each as set out in the terms of the COSA.

b) Most employers in Ontario are required to register with the Workplace Safety and Insurance Board (the “WSIB”) and provide coverage for work-related injuries for all employees in Ontario. The Workplace Safety and Insurance Act (Ontario) provides for different methods of insurance coverage depending on the type of company. The OLG, as a Crown Corporation of the Ontario government, is a Schedule 2 employer and must individually pay the total cost of injury benefits for its employees. The OLG prepares an actuarial assessment of its liability at the end of each fiscal period and makes adjustments to its liability reserves for current service costs and changes to past service costs. Gateway is a Schedule 1 employer and is required to pay annual premiums to an insurance fund covering all Schedule 1 employers. The amount of premium is based on the WSIB’s classification of the employer’s business activity and the employer’s total insurable payroll.

F-177

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE NORTH ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 29, 2017

(expressed in thousands of Canadian dollars)

Applying the appropriate premium rate to the insurable wages for the properties included in the North Bundle results in a lower expense for Gateway as follows:

	$
Estimated WSIB expense for the Company		238
WSIB expense reported by OLG for the period		(990	)
WSIB adjustment		(752	)

The estimated WSIB expense for the Company is based on a prescribed rate of $2.05 per $100 of insurable earnings, assuming that 85% of total salaries and wages would be insurable.

c) In May 2017, the OLG paid severance costs to employees who did not accept the Company’s offer for employment post-close and recorded such costs in the Bundle Statements. Under the terms of the TAPA, these costs were the responsibility of the OLG. Had the Company operated the North Bundle properties for the entire period of the unaudited pro forma combined schedule of revenue and direct expenses, such costs would not have been incurred. Total severance costs have been estimated at $560, based on the Bundle Statements.

d) The Bundle Statements include commissions payable to host local governments in operating expenses. Such expenses continue to be the responsibility of the OLG under the costs and will not be paid by Gateway. Total commissions paid to host local governments during the period were $2,522.

e) The Alcohol and Gaming Commission of Ontario (the “AGCO”) is responsible for the regulation of casinos, charity casinos and slot machine facilities in Ontario. The AGCO has contracted with the Ontario Provincial Police (the “OPP”) to provide certain regulatory services within casinos and slot machine facilities. The AGCO charges each casino or slot machine facility for certain costs, including annual registration fees and the cost of OPP services. The OLG has not recorded these AGCO charges in the Bundle Statements. The Company will be required to pay these charges and such charges will form part of the operating expenses of the North Bundle properties. The OLG paid the AGCO an estimated $1,212 for the North Bundle properties during the period.

f) The OLG presents gaming revenue in the Bundle Statements net of the costs of cash incentives, whereas the Company records cash incentives as marketing expenses. An adjustment is necessary to reclassify the cost of cash incentives incurred by the OLG from gaming revenue to marketing expenses to conform to the Company’s accounting policies. The OLG incurred $275 in cost of cash incentives during the period.

g) The OLG is a ‘Prescribed Registrant’ for the purposes of subsection 188(5) of the Excise Tax Act and is subject to Regulations pursuant to which the OLG is required to pay Harmonized Sales Tax (“HST”) on the total gross gaming revenue. The OLG reports any such HST paid as an expense in the Bundle Statements. Gateway is not a Prescribed Registrant and is not subject to the Regulations. The total HST paid by the OLG on gross gaming revenue for the period was $1,811.

F-178

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE NORTH ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA

COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 29, 2017

(expressed in thousands of Canadian dollars)

h) To increase depreciation of property and equipment by $4,135 for the period to conform to the Company’s depreciation policy. Depreciation expense was calculated based on the estimated fair value of the acquired property and equipment with useful lives as follows:

Buildings	5—50 years
Furniture and fixtures	5—16 years
Computer hardware	1—3 years
Equipment	1—30 years
Leasehold improvements	term of the related lease

No depreciation expense was recorded by the OLG during the period.

i) To increase amortization of intangible assets by $60 for the period to conform to the Company’s amortization policy. Amortization expense was calculated based on the estimated fair value of the acquired intangible assets with useful lives of 20 years.

No amortization expense was recorded by the OLG during the period.

F-179

GATEWAY CASINOS & ENTERTAINMENT LIMITED

SOUTHWEST ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 8, 2017

(expressed in thousands of Canadian dollars)

F-180

GATEWAY CASINOS & ENTERTAINMENT LIMITED

SOUTHWEST ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

Introduction

On May 9, 2017, Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) signed a 20-year casino operating and service agreement (“COSA”) with the Ontario Lottery and Gaming Corporation (the “OLG”) for the operation of the Southwest Ontario Gaming Bundle (the “Southwest Bundle”). Under the Southwest Bundle transition and asset purchase agreement (the “TAPA”), the Company 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 approximately $95.4 million of consideration, including approximately $20.2 million of net working capital comprised of cash prepaids, inventory and accrued liabilities.

Under the terms of the COSA, the Company executes the operations relating to the gaming properties, while the OLG retains the authority to conduct and manage the gaming and lottery schemes carried out at the gaming properties. The Company receives a commission equal to a share of the gaming revenue for operating the gaming properties, equal to 70% of the gaming revenue from North Bundle properties in excess of a guaranteed threshold amount to the OLG, subject to a minimum payable to the Company.

Additionally, the Company is entitled to a Permitted Capital Expenditure Allowance, payable by the OLG, for a proportion of permitted capital expenditures that the Company incurs in the various gaming zones located in the North Bundle. The amount of the Permitted Capital Expenditure Allowance payable to the Company by the OLG in the first operating year is specified in the COSA. The Permitted Capital Expenditure Allowance payable in subsequent operating years will increase according to a pre-determined inflation rate.

This unaudited pro forma combined schedule of revenue and direct expenses of the Southwest Bundle has been prepared for illustrative purposes only, to show the effect of the acquisition of the assets of the Southwest Bundle as if the Company acquired the Southwest Bundle on January 1, 2017 and the terms of the first operating year under the COSA were in effect for the period.

The assumptions and estimates underlying the unaudited adjustments to the pro forma combined schedule of revenues and direct expenses are described in the accompanying notes, which should be read together with the unaudited pro forma combined schedule of revenues and direct expenses. The pro forma data presented reflect events directly attributable to the described transaction and certain assumptions that the Company believes 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 combined schedule of revenues and direct expenses.

F-181

GATEWAY CASINOS & ENTERTAINMENT LIMITED

SOUTHWEST ONTARIO GAMING BUNDLE

UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 8, 2017

(expressed in thousands of Canadian dollars)

	Southwest Bundle			Adjustments			Pro Forma
	$			$			$
Revenue
Gaming Revenue (notes 3(a) and 3(f))		81,810			(39,204	)		42,606
Non-gaming Revenue		1,375			—			1,375
Total Revenue		83,185			(39,204	)		43,981
Direct Expenses
Payroll (notes 3(b) and 3(c))		20,807			(3,759	)		17,048
Commissions (note 3(d))		3,671			(3,671	)		—
Marketing and promotion (note 3(f))		1,541			374			1,915
Operating (note 3(e))		2,330			864			3,194
Facilities		4,728			—			4,728
Food and Beverage		1,019			—			1,019
GST/HST (note 3(g))		2,508			(2,508	)		—
Amortization (notes 3(h) and (i))		(31	)		5,047			5,016
Total Direct Expenses		36,573			(3,653	)		32,920
Excess Revenue over Direct Expenses		46,612			(35,551	)		11,061
Other Income		1,755			—			1,755
Finance Costs		—			—			—
Excess revenue over Direct Expenses and Other Income and Finance Costs		48,367			(35,551	)		12,816

The accompanying notes are an integral part of this unaudited pro forma combined schedule of revenues and direct expenses.

F-182

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE SOUTHWEST ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 8, 2017

(expressed in thousands of Canadian dollars)

1     Basis of presentation

This unaudited pro forma combined schedule of revenues and direct expenses of the Southwest Ontario Gaming Bundle (the “Southwest Bundle”) has been prepared by management of Gateway Casinos & Entertainment Limited (the “Company” or “Gateway”) for illustrative purposes only, to show the effect of the acquisition of the assets of the Southwest Bundle by the Company (the “Transaction”). The unaudited pro forma combined schedule of revenues and direct expenses has been prepared as if the Company acquired the Southwest Bundle on January 1, 2017 and the terms of the first operating year of the casino operating and service agreement (“COSA”) were in effect for the period.

The unaudited pro forma combined schedule of revenues and direct expenses has been prepared using site-level financial information prepared by Ontario Lottery and Gaming Corporation (“OLG”) management for the period from January 1, 2017 to May 8, 2017 (the “Bundle Statements”) with adjustments made by the Company as noted above and has not been audited or reviewed by outside auditors. The Bundle Statements do not include certain information and adjustments necessary to conform with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Readers should not place undue reliance on this information.

2     Significant accounting policies

The accounting policies used to prepare the unaudited pro forma combined schedule of revenues and direct expenses conform to the accounting policies adopted by the Company, which are in compliance with IFRS as issued by the International Accounting Standards Board, except that as noted in Note 1 Basis of presentation, the Bundle Statements with adjustments made by the Company as noted above do not include certain information and adjustments necessary to conform with IFRS as issued by the International Accounting Standards Board.

3     Pro forma adjustments

The following adjustments have been recorded in the unaudited pro forma combined schedule of revenues and direct expenses to reflect the pro forma effects of the Transaction as described above:

a) To adjust the gaming revenue and revenue from permitted capital expenditure to reflect the terms of the COSA as if the Company had operated the Southwest Bundle properties for the entire period. The calculation of the adjustment is based on the guaranteed threshold amount to the OLG, guaranteed minimum commission to the Company and amount of the Permitted Capital Expenditure Allowance for the first operating year of the COSA, each as set out in the COSA.

b) Most employers in Ontario are required to register with the Workplace Safety and Insurance Board (the “WSIB”) and provide coverage for work-related injuries for all employees in Ontario. The Workplace Safety and Insurance Act (Ontario) provides for different methods of insurance coverage depending on the type of company. The OLG, as a Crown Corporation of the Ontario government, is a Schedule 2 employer and must individually pay the total cost of injury benefits for its employees. The OLG prepares an actuarial assessment of its liability at the end of each fiscal period and makes adjustments to its liability reserves for current service costs and changes to past service costs. Gateway is a Schedule 1 employer and is required to pay annual premiums to an insurance fund covering all Schedule 1 employers. The amount of premium is based on the WSIB’s classification of the employer’s business activity and the employer’s total insurable payroll.

F-183

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE SOUTHWEST ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 8, 2017

(expressed in thousands of Canadian dollars)

Applying the appropriate premium rate to the insurable wages for the properties included in the Southwest Bundle results in a lower expense for Gateway than was included in the OLG results, calculated as follows:

	$
Estimated WSIB expense for the Company		335
WSIB expense reported by OLG for the period		(769	)
WSIB adjustment		(434	)

The estimated WSIB expense for the Company is based on a prescribed rate of $2.05 per $100 of insurable earnings, assuming that 85% of total salaries and wages would be insurable.

c) In May 2017, the OLG paid severance costs to employees who did not accept the Company’s offer for employment post-close and recorded such costs in the Bundle Statements. Under the terms of the TAPA, these costs were the responsibility of the OLG. Had the Company operated the Southwest Bundle properties for the entire period of the pro forma statement of revenue and direct expenses, such costs would not have been incurred. Total severance costs have been estimated at $3,325, based on the interim site-level financial information provided by the OLG.

d) The Bundle Statements include commissions payable to host local governments in operating expenses. Such expenses continue to be the responsibility of the OLG under the COSA and will not be paid by Gateway. Total commissions paid to host local governments during the period were $3,671.

e) The Alcohol and Gaming Commission of Ontario (the “AGCO”) is responsible for the regulation of casinos, charity casinos and slot machine facilities in Ontario. The AGCO has contracted with the Ontario Provincial Police (the “OPP”) to provide certain regulatory services within casinos and slot machine facilities. The AGCO charges each casino or slot machine facility for certain costs, including annual registration fees and the cost of OPP services. The OLG has not recorded these AGCO charges in the Bundle Statements. The Company will be required to pay these charges and such charges will form part of the operating expenses of the Southwest Bundle properties. The OLG paid the AGCO an estimated $864 for the Southwest Bundle properties during the period.

f) The OLG presents gaming revenue in the Bundle Statements net of the costs of cash incentives, whereas the Company records cash incentives as marketing expenses. An adjustment is necessary to reclassify the cost of cash incentives incurred by the OLG from gaming revenue to marketing expenses to conform to the Company’s accounting policies. The OLG incurred $374 in cost of cash incentives during the period.

g) The OLG is a ‘Prescribed Registrant’ for the purposes of subsection 188(5) of the Excise Tax Act and is subject to Regulations pursuant to which the OLG is required to pay Harmonized Sales Tax (“HST”) on the total gross gaming revenue. The OLG reports any such HST paid as an expense in the Bundle Statements. Gateway is not a Prescribed Registrant and is not subject to the Regulations. The total HST paid by the OLG on gross gaming revenue for the period was $2,508.

F-184

GATEWAY CASINOS & ENTERTAINMENT LIMITED

NOTES TO THE SOUTHWEST ONTARIO GAMING BUNDLE UNAUDITED PRO FORMA COMBINED SCHEDULE OF REVENUES AND DIRECT EXPENSES

For the period from January 1, 2017 to May 8, 2017

(expressed in thousands of Canadian dollars)

h) To increase depreciation of property and equipment by $4,936 for the period to conform to the Company’s depreciation policy. Depreciation expense was calculated based on the estimated fair value of the acquired property and equipment with useful lives as follows:

Buildings	5—50 years
Furniture and fixtures	5—16 years
Computer hardware	1—3 years
Equipment	1—30 years
Leasehold improvements	term of the related lease

No depreciation expense was recorded by the OLG during the period.

i) To increase amortization of intangible assets by $111 for the period to conform to the Company’s amortization policy. Amortization expense was calculated based on the estimated fair value of the acquired intangible assets with useful lives of 20 years.

No amortization expense was recorded by the OLG during the period.

F-185

            Shares

GATEWAY CASINOS & ENTERTAINMENT LIMITED

Common Shares

                    , 2018

Through and including                 ,                (25 days after the commencement of this offering), all dealers that effect transactions in our common shares, whether or not participating in this offering, may be required to deliver a prospectus. This delivery is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

Morgan Stanley	Credit Suisse	Goldman Sachs & Co. LLC
CIBC Capital Markets	Macquarie Capital	SunTrust Robinson Humphrey

PART II—INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 6. Indemnification of directors and officers

Section 124 of the CBCA authorizes companies to indemnify past and present directors, officers and certain other individuals for the liabilities incurred in connection with their services as such (including costs, expenses and settlement payments) unless such individual did not act honestly and in good faith with a view to the best interests of the company and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, if such individual did not have reasonable grounds for believing his or her conduct was lawful. In the case of a suit by or on behalf of the corporation, a court must approve the indemnification.

Upon completion of this offering, our articles will provide that we shall indemnify directors and officers to the extent required or permitted by law.

Prior to the completion of this offering, we intend to enter into agreements with our directors and certain officers (each an “Indemnitee” under such agreements) to indemnify the Indemnitee, to the fullest extent permitted by law and subject to certain limitations, against all liabilities, costs, charges and expenses reasonably incurred by an Indemnitee in an action or proceeding to which the Indemnitee was made a party by reason of the Indemnitee being an officer or director of (i) our company or (ii) an organization of which our company is a shareholder or creditor if the Indemnitee serves such organization at our request.

We maintain insurance policies relating to certain liabilities that our directors and officers may incur in such capacity.

Item 7. Recent sales of unregistered securities

On February 15, 2017, the Company issued $255,000,000 aggregate principal amount of its 8.250% Second Priority Senior Secured Notes due 2024 (the “Notes”). The Notes were sold to qualified institutional buyers in the United States in reliance on Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S. The Notes were offered to investors at 100% of the principal amount thereof. Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey, Inc., BMO Capital Markets Corp., Macquarie Capital (USA) Inc., CIBC World Markets Corp. and National Bank of Canada Financial Inc. acted as joint book-running managers for the initial purchasers. The aggregate initial purchasers’ discount was $4,462,500.

During 2017, we granted our director Michael Burns an aggregate of 8,946 common shares in lieu of cash payable pursuant to his director retainer agreement.

During 2016, we granted our director Michael Burns an aggregate of 8,946 common shares in lieu of cash payable pursuant to his director retainer agreement.

During 2015, we granted our director Michael Burns an aggregate of 8,946 common shares in lieu of cash payable pursuant to his director retainer agreement.

II-1

Item 8. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this registration statement:

EXHIBIT INDEX

The following documents are filed as part of this registration statement:

1.1*	Form of Underwriting Agreement.
3.1	Form of Amended and Restated Articles of Incorporation of Gateway Casinos & Entertainment Limited, to be effective upon the closing of this offering.
3.2	Form of Bylaws of Gateway Casinos & Entertainment Limited, to be effective upon the closing of this offering.
4.1*	Specimen Stock Certificate evidencing common shares.
4.2**	Indenture, dated as of February 22, 2017, among Gateway Casinos  & Entertainment Limited, the guarantors from time to time party thereto and Computershare Trust Company of Canada, as Canadian trustee and collateral agent and Computershare Trust Company, N.A., as U.S. trustee.
4.3**	Supplemental Indenture, dated as of March 13, 2018, among Gateway Casinos  & Entertainment Limited, the guarantors from time to time party thereto and Computershare Trust Company of Canada, as Canadian trustee and collateral agent and Computershare Trust Company, N.A., as U.S. trustee.
5.1*	Opinion of Bennett Jones LLP.
10.1**	Shareholders’ Agreement, dated September 16, 2010, by and among Gateway Casinos  & Entertainment Limited (the “Company”), and each of the holders of the shares of the Company’s capital stock deemed to be a party thereto pursuant to Articles of Arrangement dated September  16, 2010 and an order of the Supreme Court of British Columbia dated August 16, 2010 (together with any other person who thereafter became party to the Shareholders’ Agreement pursuant to the provisions thereof).
10.2**	Amended and Restated Credit and Guaranty Agreement, as amended and restated  as of March 13, 2018, among Gateway Casinos & Entertainment Limited, as the Borrower, the guarantors from time to time party thereto, the  lenders from time to time party thereto, Bank of Montreal, as Administrative Agent, and BNY Trust Company of Canada, as Collateral Agent.
10.3*	Form of Registration Rights Agreement, to be effective upon the closing of this offering.
10.4	Agreement of Purchase and Sale dated December 15, 2017 as amended January 29, 2018 and February 23, 2018 between Gateway Casinos  & Entertainment Limited and Mesirow Realty Sale-Leaseback, Inc.
10.5	Employment Agreement dated October 16, 2013 between Gateway Casinos & Entertainment Limited and Anthony Santo.
10.6*	Employment Agreement dated November 18, 2018 between Gateway Casinos & Entertainment Limited and Brad Hutchings.
10.7	Employment Agreement dated September 29, 2016 between Gateway Casinos & Entertainment Limited and Bradley Bardua.
10.8	Employment Agreement dated June 26, 2014 between Gateway Casinos & Entertainment Limited and Keith Andrews, as amended April 7, 2016, and August 29, 2017.
10.9*	Executive Employment Agreement to be entered into between Gateway Casinos & Entertainment Limited and Bradley Bardua.
10.10*	Executive Employment Agreement to be entered into between Gateway Casinos & Entertainment Limited and Keith Andrews.

II-2

10.11	Letter dated October 5, 2016 from Gateway Casinos & Entertainment Limited to Keith Andrews regarding equity program participation.
10.12*	Letter Agreement dated August 5, 2010, as amended by Letter Agreement dated September 21, 2011, between Gateway Casinos & Entertainment Limited and Sentinel Strategies Ltd. for the services of Michael C. Burns as an independent director on the Board of Directors of Gateway Casinos & Entertainment Limited.
10.13	Form of Legacy Equity Program.
16.1**	Letter from PricewaterhouseCoopers LLP to the Securities and Exchange Commission.
21.1**	List of Subsidiaries of Gateway Casinos & Entertainment Limited.
23.1	Consent of PricewaterhouseCoopers LLP.
23.2	Consent of Grant Thornton LLP as an Independent Registered Public Accounting Firm.
23.3	Consent of Grant Thornton LLP as an Independent Certified Public Accounting Firm.
23.4	Consent of KPMG LLP.
23.5*	Consent of Bennett Jones LLP (included in Exhibit 5.1).
24.1	Power of Attorney (included on signature page).

* Indicates to be filed by amendment

** Indicates previously filed.

Item 9. Undertakings

The undersigned hereby undertakes:

a. To provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

b. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

c. The undersigned registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Burnaby, British Columbia on December 18, 2018.

GATEWAY CASINOS & ENTERTAINMENT LIMITED
By:	/s/ Gabriel de Alba
	Name:  Gabriel de Alba
	Title:    Executive Chairman and Director
By:	/s/ Tony Santo
	Name:  Tony Santo
	Title:    Director, President & Chief Executive Officer

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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Tony Santo as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registrations filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on December 18, 2018 in the capacities indicated:

Name	Title	Date
/s/ Tony Santo      Tony Santo	Director, President & Chief Executive Officer (principal executive officer)	December 18, 2018
/s/ Bradley Hutchings      Bradley Hutchings	Chief Financial Officer (principal financial officer and principal accounting officer)	December 18, 2018
/s/ Gabriel de Alba      Gabriel de Alba	Executive Chairman and Director	December 18, 2018
* Michael C. Burns	Director	December 18, 2018
Newton Glassman	Director

*By:	/s/ Tony Santo
	Attorney-in-Fact

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Signature of Authorized U.S. Representative of Registrant

Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Gateway Casinos & Entertainment Limited has signed this registration statement on December 18, 2018.

By:	/s/ Richard Arthur
	Name:	Richard Arthur
	Title:	Assistant Secretary on behalf of Cogency Global Inc.

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EX-3.1

Exhibit 3.1

EXHIBIT “A”

SCHEDULE OF OTHER PROVISIONS

1. The directors may, between annual meetings of shareholders, appoint one or more additional directors of the Corporation to serve until the next annual meeting of shareholders, but the number of additional directors shall not at any time exceed 1/3 of the number of directors who held office at the expiration of the last meeting of the shareholders of the Corporation.

2. Any meeting of the shareholders of the Corporation may be held in any of the following cities:

St. John’s, Newfoundland

Charlottetown, Prince Edward Island

Halifax, Nova Scotia

Saint John, New Brunswick

Montreal, Quebec

Quebec City, Quebec

Toronto, Ontario

Ottawa, Ontario

Winnipeg, Manitoba

Regina, Saskatchewan

Victoria, British Columbia

Vancouver, British Columbia

Edmonton, Alberta

Calgary, Alberta

or in any other place selected by the directors of the Corporation in accordance with applicable corporate legislation.

3. For the purpose of these articles:

(a) a Person is an “associate” of another Person if:

(i) one is a corporation of which the other is an officer or director;

(ii) one is a corporation that is controlled by the other or by a group of Persons of which the other is a member;

(iii) one is a partnership of which the other is a partner;

(iv) one is a trust of which the other is a trustee or a beneficiary or an associate of either;

(v) one is a relative, including a spouse, of the other or a relative of the other spouse, if the relative has the same home as the other;

(vi) both are corporations controlled by the same Person;

(vii) both are members of a voting trust that relates to voting shares of the Corporation; or

(viii) both, in the reasonable opinion of the British Columbia Lottery Corporation, are parties to an agreement or arrangement the purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in the Corporation, or they are otherwise acting in concert with respect to those interests;

(b) “control” means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, an agreement or arrangement, the ownership of any body corporate or otherwise, and, without limiting the generality of the foregoing:

(i) in the case of the British Columbia Lottery Corporation, a body corporate is controlled by a Person if:

(A) securities of the body corporate to which are attached more than fifty per cent (50%) of the votes that may be cast to elect directors of the body corporate are held by or for the benefit of that Person, and the votes attached to those securities are sufficient, if exercised, to elect the majority of the directors of the body corporate; or

(B) the body corporate is a publicly traded company and securities of the body corporate to which are attached more than twenty per cent (20%) of the votes that may be cast to elect directors of the body corporate are held by or for the benefit of that Person, unless that Person gives notice to and satisfies the British Columbia Lottery Corporation that the Person does not in fact control the body corporate; or

(ii) in the case of the British Columbia Lottery Corporation, a partnership or unincorporated organization is controlled by a Person with an ownership interest therein representing more than twenty per cent (20%) of the assets of the partnership or organization or such ownership interest is held, by or for the benefit of that Person;

(iii) in the case of the Ontario Gaming and Lottery Corporation, a body corporate is controlled by a Person or Persons if:

(A) such person holds or beneficially owns a sufficient number of the voting rights attached to all outstanding Voting Securities of such body corporate to affect materially the control of such body corporate;

(B) any combination of persons, acting jointly or in concert by virtue of an agreement, arrangement, commitment or understanding, hold or beneficially own in total a sufficient number of the voting rights attached to all outstanding Voting Securities of such body corporate to affect materially the control of such body corporate;

(C) such Person holds or beneficially owns an ownership interest representing more than 20% of the assets of any partnership, trust or other unincorporated organization; or

(D) such Person has the direct or indirect power or authority to influence or direct the approval of a decision, the management, actions or policies of the body corporate or to prevent the approval of a decision, the management., actions or policies of the body corporate through any contractual right or other power or interest with or over the body corporate;

In addition, a Person or Persons acting jointly or in concert will be deemed to Control a body corporate if such Person or Persons holds or beneficially owns more than 20% of the Voting Securities of such body corporate.

(c) “Control Person” means any Person that directly or indirectly controls the Corporation, but excluding any Person whose securities are publicly traded and that is not under the control of any Person or combination of persons, acting jointly or in concert.

(d) “corporation” includes a body corporate, partnership and unincorporated organization; and

(e) “Gaming Authorities” means any Governmental Authority with regulatory, licensing or permitting authority or jurisdiction over any business or enterprise or any Gaming Facility (including the British Columbia Gaming Policy and Enforcement Branch, the Alberta Gaming and Liquor Commission, and the Alcohol and Gaming Commission of Ontario or any successor agencies responsible for regulation of gaming on behalf of the Provinces of Alberta, British Columbia or Ontario) owned, managed or operated by the Corporation.

(f) “Gaming Facility” means any gaming or pari-mutuel wagering establishment including any casino or racino, and other property or assets related, ancillary or complementary thereto, or used in connection therewith, including any hotels, resorts, race tracks for horseracing, horse racing teletheatres, off track wagering sites, bingo facilities, facilities for casino gaming, community gaming centres, card clubs, theatres, parking facilities, recreational vehicle parks, retail shops, restaurants, pubs, golf courses, marinas vessels, barges and ships and other similarly licensed facilities, related or ancillary businesses or recreation and entertainment facilities or any other class of facilities prescribed by any Governmental Authority.

(g) “Gaming Laws” means all applicable provisions of all: (i) constitutions, treaties, statutes or laws governing Gaming Facilities and rules, regulations, codes and ordinances of Gaming Authorities and all administrative or judicial orders or decrees or other laws pursuant to which any Gaming Authority possesses regulatory, licensing or permitting authority over gambling, gaming or Gaming Facility activities conducted by the Corporation within its jurisdiction; (ii) orders, decisions, determinations, judgments, awards, decrees, approvals, consents and waivers of any Gaming Authority; and (iii) operating or service agreements with any Crown agency, corporation or other body responsible for the conduct and management of gaming on behalf of any Governmental Authority relating to any Gaming Facility, including all amendments thereto.

(h) “Governmental Authority” means any nation or government, any state, province territory, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board, bureau or similar body, whether federal, state, provincial, territorial, local or foreign.

(i) “ownership interest” means an interest in a corporation under all circumstances or under some circumstances that have occurred and are continuing, and includes a security currently convertible into such an interest and currently exercisable options and rights to acquire such an interest or such a convertible security.

(j) “Person” includes an individual, corporation, body corporate, firm, partnership, society or other incorporated body, limited liability company, governmental authority, association, union, syndicate, joint venture, trust, trustee, executor, administrator or other legal representative, as the context requires.

(k) “Significant Interest” means

(i) in the case of the British Columbia Lottery Corporation, ownership interests (including but not limited to (i) outstanding voting shares and (ii) one or more securities issued by the Corporation if the amount paid up under the security or securities is equal to or greater than 5% of the aggregate paid up capital of the Corporation) in the Corporation which, in the aggregate, are five percent (5%) or more, or such other amount as may be established by the British Columbia Lottery Corporation or the British Columbia Gaming Policy and Enforcement Branch from time to time, of the total ownership interests in the Corporation; and

(ii) in the case of the Ontario Lottery and Gaming Corporation, shares, units, interests or other securities carrying voting rights under all circumstances, or under some circumstances that have occurred and are continuing, or that may be triggered by the holder thereof, including securities convertible into such shares, units, interests or securities and exercisable options and rights to acquire such shares, units, interests or securities, or to acquire such convertible securities (“Voting Securities”) of the

Corporation or of any Control Person to which are attached, in the aggregate, more than ten percent (10%), or such other amount as may be established by the Ontario Lottery and Gaming Corporation from time to time, of the votes that may ordinarily be cast to elect directors or appoint or dismiss the managing partners or partners or the trustee or trustees of the Corporation or such Control Person, as the case may be.

(l) “Subject Shareholders” means a Person, a group of Persons acting in concert or a group of Persons who, in the reasonable opinion of the Corporation, are acting in concert.

4. No Person or Subject Shareholder will hold, beneficially own or control, either directly or indirectly, through any associate or affiliate, through anyone with whom such person is acting jointly or in concert, or by way of any right or entitlement whatsoever in agreement or at law, a Significant Interest, unless the Person or Subject Shareholder first obtains (i) the written consent of the British Columbia Gaming Policy and Enforcement Branch, and then obtains the written consent of the British Columbia Lottery Corporation, and/or, as applicable (ii) the written consent Ontario Lottery and Gaming Corporation; and

5. A Person or Subject Shareholder who holds, beneficially owns or controls, either directly or indirectly, a Significant Interest will not:

(a) dispose, in any manner whatsoever, of any portion of such Significant Interest; or

(b) acquire, in any manner whatsoever, a greater Significant Interest,

if such disposition or acquisition would result in a change of control of the Corporation, unless the Person or Subject Shareholder has first obtained (i) the written consent of the British Columbia Gaming Policy and Enforcement Branch, and then obtains the written consent of the British Columbia Lottery Corporation, and/or, as applicable (ii) the written consent Ontario Lottery and Gaming Corporation, to such disposition or acquisition.

Any consent required under paragraphs 4 and 5 may be subject to conditions expressly specified, designated or approved in writing by the British Columbia Lottery Corporation, British Columbia Gaming Policy and Enforcement Branch or Ontario Lottery and Gaming Corporation, and no Person or Subject Shareholder will hold, beneficially own or control, either directly or indirectly, a Significant Interest except in compliance with such conditions and any such disposition or acquisition will only be effective upon compliance with such conditions.

For the purposes hereof, each Person who is a member of a group of Persons all of whom are associates of each other will each be deemed to beneficially own all ownership interests of the Corporation which are collectively held, beneficially owned or controlled, either directly or indirectly, by the members of such group.

6. No Person or Subject Shareholder shall acquire or dispose of, directly or indirectly, through any associate or affiliate, through anyone with whom such person is acting jointly or in concert, or by way of any right or entitlement whatsoever in agreement or at law, in one or more transactions, 5% or more, or such other amount as may be established by the Gaming Authorities from time to time, of the ownership interests of voting securities (including but not limited to (i) outstanding voting shares and (ii) one or more securities issued by the Corporation if the amount paid up under the security or securities is equal to or greater than 5% of the aggregate paid up capital of the Corporation) of the Corporation without providing advance written notice to Corporation and receiving the advance approval of the Corporation and the Gaming Authorities.

7. If the Corporation becomes aware that a Subject Shareholder has failed, or may fail, to comply with the provisions in paragraphs 4, 5 or 6, or if the ownership of shares of the Corporation by a Subject Shareholder is inconsistent with Gaming Laws, the Corporation shall be entitled to take any of the following actions:

(a) promptly notify the British Columbia Lottery Corporation or Ontario Lottery and Gaming Corporation, as applicable;

(b) not issue or register the transfer of any ownership interest in the Corporation;

(c) not distribute any funds that may be payable or become payable to the ownership interest until such contravention is remedied;

(d) suspend all voting and participation rights attached to such ownership interest in the Corporation (to the extent permitted by applicable law);

(e) place a stop transfer on any shares or securities of the Corporation legally or beneficially owned or controlled by the Subject Shareholder;

(d) apply to the Supreme Court of British Columbia, or such other court of competent jurisdiction, seeking an injunction to prevent a breach or continuing breach of such provisions or Gaming Laws or for an order directing that the number of shares giving rise to the breach of such provisions or Gaming Laws be sold or otherwise disposed of in a manner that the Court may deem appropriate;

(e) make application to the British Columbia Securities Commission, its successors or assigns, or such other Governmental Authority having jurisdiction over the affairs of the Corporation, to effect a cease trading order or such similar restriction against the Subject Shareholder until such time as the Subject Shareholder complies with such provisions or Gaming Laws; and

(f) apply to the Supreme Court of British Columbia, or such other court of competent jurisdiction, for such other relief as may be required to give effect to the share restrictions contained in paragraphs 4, 5 and 6.

8. The provisions of paragraphs 4, 5 and 6 shall not apply to the ownership, acquisition or disposition of the shares of the Corporation as a result of:

(a) any transfer of shares of the Corporation occurring by operation of law including, inter alia, the transfer of voting shares of the Corporation to a surviving joint tenant, trustee in bankruptcy or committee of a shareholder;

(b) an acquisition by one or more underwriters or portfolio managers who hold shares of the Corporation for the purposes of distribution to the public or for the benefit of a third party provided that such third party is in compliance with paragraphs 4, 5 and 6; and

(c) shares of the Corporation held by a person who provides centralized facilities for the clearing of trades in securities of the Corporation and is acting solely as an intermediary of the payment of funds or the delivery of securities.

9. If the Corporation becomes aware that a Subject Shareholder has contravened, or may contravene, any of the requirements of paragraphs 4, 5 or 6, the Corporation shall give the Subject Shareholder notice in writing (the “Notice”) setting out:

(a) the number of shares of the Corporation, if known by the Corporation, that are owned or controlled, either directly or indirectly, by the Subject Shareholder giving rise to the contravention, or reasonably anticipated contravention, of the requirements of paragraphs 4, 5 or 6;

(b) that the Subject Shareholder is, or may become, in breach of the requirements of paragraphs 4, 5 or 6;

(c) if the Subject Shareholder is in breach of the requirements of paragraphs 4, 5 or 6, that the Subject Shareholder forthwith rectify the breach; and

(d) that, upon failure of compliance with the requirements of paragraphs 4, 5 or 6 by the Subject Shareholder, the Corporation may take action as contemplated by paragraphs 7, 10 and 11 without further notice to the Subject Shareholder.

10. Upon receipt of Notice from the Corporation, the Subject Shareholder shall, within 30 days of the date of the Notice, dispose of or otherwise transfer that number of shares of the Corporation giving rise to the contravention of the requirements of paragraphs 4, 5 or 6, or deposit in escrow with the Corporation, that number of shares of the Corporation giving rise to the contravention of the requirements of paragraphs 4, 5 or 6, to be held by the Corporation until such time as the Subject Shareholder’s ownership of the shares of the Corporation is in compliance with such paragraphs.

11. If the Corporation is holding shares in escrow for a Subject Shareholder pursuant to paragraph 10 above and the British Columbia Lottery Corporation, the Ontario Lottery and Gaming Corporation or the applicable Gaming Authorities do not consent to the proposed acquisition or disposition of shares by the Subject Shareholder, the Corporation may upon written notice to the Subject Shareholder:

(a) sell the shares it holds in escrow through the facilities of the Toronto Stock Exchange or such other exchange, market or quotation system upon which the Corporation’s shares may be listed or quoted from time to time (the “Exchange”) and distribute the proceeds of such sales to the Subject Shareholder; or

(b) repurchase, for cancellation, the shares it holds in escrow at a price equal to the 10-day weighted average trading price of the Corporation’s shares on the Exchange and distribute the proceeds from such sale to the Subject Shareholder.

12. At the request of the Corporation, a Subject Shareholder owning, or proposing to acquire or hold shares of the Corporation, must deliver forthwith to the Corporation, a certificate of compliance in a form prescribed by the Corporation (a “Certificate of Compliance”) certifying compliance with paragraphs 4, 5 and 6 or certifying that no breach of such paragraphs has or may occur by the acquisition of shares of the Corporation by the Subject Shareholder.

13. If a Subject Shareholder fails to provide a Certificate of Compliance within the time period prescribed by the Corporation in the Notice, the Corporation may suspend the Subject Shareholder’s share rights as set out in paragraph 7(c) and 7(d).

14. Delivery of the Certificate of Compliance to the Corporation shall constitute satisfactory evidence of compliance with or breach of paragraphs 4, 5 or 6 and the directors, officers, employees and agents of the Corporation shall be entitled to rely on the Certificate of Compliance and shall be exempt from liability for any action taken or not taken in reliance upon such Certificate of Compliance.

The Corporation shall have no obligation to effect any transaction with respect to the issuance, transfer of shares or otherwise deal with shares of the Subject Shareholder until a Certificate of Compliance is received and the Corporation is reasonably satisfied that no breach of paragraphs 4, 5 and 6 exists or will occur.

EX-3.2

Exhibit 3.2

GATEWAY CASINOS & ENTERTAINMENT LIMITED

(the “Corporation”)

BY-LAW NO. 1

By-laws regulating the business and affairs

of the Corporation

1. Board of Directors and Board Committees

(a) Number of Directors - Subject to any minimum and maximum number of directors specified in the Articles, the number of directors to be elected at any meeting of shareholders shall be the number of directors then in office, or such other number as has been determined from time to time by resolution of the board of directors.

(b) Committees - The board of directors may appoint from among their numbers one or more committees of directors, however designated, and subject to the Canada Business Corporations Act and the regulations promulgated thereunder, all as amended from time to time (the “Act”), may delegate to such committee or committees any of the powers of the directors. The board of directors shall appoint a chairman of each such committee to serve at the pleasure of the board. Subject to the Act and By-laws, and unless otherwise determined by resolution of the board of directors, a majority of the members of a committee shall constitute a quorum for meetings of committees, and in all other respects, each such committee shall have the power to determine its own rules of procedure.

2. Meetings of Shareholders

(a) Place and Time - Meetings of shareholders of the Corporation shall be held at the registered office of the Corporation or at such other place within Canada on such date and at such time as may be determined from time to time by the board of directors. To the extent permitted by the Act, meetings of shareholders may be held entirely by means of a telephonic, electronic or other communication facility, including teleconferencing, video conferencing, computer link, webcasting and other similar means.

(b) Executive Chairman - The Executive Chairman of the Board, if any, or, in his absence or in case of his inability or refusal or failure to act, such other person (other than a person who is an executive officer or employee of the Corporation) as may have been designated by the Executive Chairman of the Board to exercise such function in his absence, shall preside at meetings of shareholders. In the absence of all such persons or, in case of their inability or refusal or failure to act, the persons present entitled to vote shall choose another director as chairman and if no director is present, or if all the directors present refuse to act, then the persons entitled to vote shall choose one of their number to be chairman of the meeting.

(c) Quorum - At all meetings of shareholders, except meetings at which only holders of one or more classes or one or more series of preferred shares are entitled to vote, it shall be necessary in order to constitute a quorum for two persons entitled to vote at the meeting to be present and for not less than 15 per cent of the outstanding shares of the Corporation which may be voted at the meeting to be represented in person or by proxy or by a duly authorized representative of a shareholder. At all meetings at which only holders of a particular class or series of preferred shares are entitled to vote, it shall be necessary in order to constitute a quorum for two persons entitled to vote at the meeting to be present. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the holders present or represented of a majority of the shares represented at the meeting may adjourn the meeting to a fixed time (at least 24 hours after the time fixed for the meeting) and place, but no other business may be transacted. Notwithstanding the foregoing, at such adjourned meeting the shareholder or shareholders entitled to vote then present or represented shall constitute a quorum.

(d) Proxies - A shareholder is entitled to vote in person or by proxy or, if a body corporate or an association, by any individual duly authorized by a resolution of the directors or governing body of the body corporate or association. To the extent permitted by the Act, the directors may provide for the depositing and tabulation of proxies by telephonic, electronic or other communication means.

(e) Procedure at Meetings - Procedures at meetings. The board may determine the procedures to be followed at any meeting of shareholders including, without limitation, the rules of order. Subject to the foregoing, the chairman of a meeting may determine the procedures of the meeting in all respects.

(f) Scrutineers - The chairman of a meeting of shareholders may, or if a ballot is to be taken shall, appoint one or more persons who need not be shareholders to act as scrutineers of the meeting or any adjournment or postponement thereof.

(g) Addresses of Shareholders - Every shareholder shall furnish to the Corporation an address to or at which all notices and documents intended for the shareholder shall be sent. If no address appears in the records of the Corporation, such notice or document may be sent to such address as may be considered to be the most likely to result in the notice or document reaching the shareholder. The accidental omission to give any notice or document to any shareholder shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise based thereon.

3. Meetings of Directors

(a) Place, Time and Notice - Subject to the provisions of any resolution of the board of directors, meetings of the board of directors will be held on such day and at such time and place as the Chief Executive Officer or Executive Chairmen of the Corporation or any two directors may determine. Notice of meetings of the board will be given to each director not less than 72 hours before the time when the meeting is to be held. Each newly elected board may without notice hold its first meeting for the purposes of

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organization and the appointment of officers immediately following the meeting of shareholders at which such board was elected. To the extent permitted by the Act, meetings of the board of directors may be held entirely by means of a telephonic, electronic or other communication facility, including teleconferencing, video conferencing, computer link, webcasting and other similar means.

(b) Chairman - Subject to the provisions of any resolution of the board of directors, the Chairman of the Board, if any, or, in his absence or in case of his inability or refusal or failure to act, such other director (other than a director who is an executive officer or employee of the Corporation), if any, designated from time to time by the Chairman of the Board to exercise such function in his absence, shall preside at meetings of the board of directors, and the chairman of a committee, if any, or, in case of his absence or inability or refusal or failure to act, that one member of the applicable committee (who is a director other than a director who is an executive officer or employee of the Corporation), if any, designated by the chairman of the committee to exercise such function in his absence, shall preside at meetings of the committee. If the Chairman of the Board or committee chairman, as applicable, and such designated director, if any, be absent or unable or refuse or fail to act, the directors present may choose a chairman from among their number. The chairman at any meeting of directors or a committee may vote as a director.

(c) Quorum - A majority of the directors in office shall constitute a quorum for a meeting of the board of directors.

(d) Voting - Questions arising at a meeting of the directors or any committee shall be decided by a majority of the votes cast. In case of an equality of votes, the chairman of the meeting shall not have a casting vote in addition to the vote to which he is entitled as a director.

4. Indemnification of Directors and Officers

(a) Indemnity - Subject to the limitations contained in the Act, the Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation, or a person who acts or acted at the Corporation’s request as a director or officer, or in a similar capacity, of another entity, and his heirs and representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgement, reasonably incurred by him in respect of any civil, criminal, administrative, investigative or other proceeding to which he is involved by reason of that association with the Corporation or such other entity, if

(i) he or she acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which he acted as a director or officer or in a similar capacity at the Corporation’s request; and

(ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

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(b) Insurance - The Corporation may purchase and maintain insurance for the benefit of any person referred to in clause 4(a) hereof against such liability as the board of directors may from time to time determine and as permitted by the Act.

5. Delegation

Without limit to the powers of the board of directors as provided in the Act, but subject to any limitations as provided in the Act, the board of directors may from time to time on behalf of the Corporation delegate to one or more persons whether or not directors or officers of the Corporation all or any of their powers to such extent and in such manner as the board of directors shall determine at the time of each such delegation.

6. Execution of Documents

Contracts, documents or instruments in writing requiring execution by the Corporation will be signed by hand by any one officer or director of the Corporation (whether under the corporate seal of the Corporation, if any, or otherwise) and all contracts, documents or instruments in writing so signed will be binding upon the Corporation without any further authorization or formality. The board is authorized from time to time by resolution

(a) to appoint any officer or any other person on behalf of the Corporation to sign by hand (whether under the corporate seal of the Corporation, if any, or otherwise) and deliver either contracts, documents or instruments in writing generally or to sign either by hand or by electronic transmission or mechanical signature or otherwise (whether under the corporate seal of the Corporation, if any, or otherwise) and deliver specific contracts, documents or instruments in writing, and

(b) to delegate to any two officers of the Corporation the powers to designate, direct or authorize from time to time in writing one or more officers or other persons on the Corporation’s behalf to sign either by hand or by electronic transmission or mechanical signature or otherwise (whether under the corporate seal of the Corporation, if any, or otherwise) and deliver contracts, documents or instruments in writing of such type and on such terms and conditions as such two officers see fit,

Contracts, documents or instruments in writing that are to be signed by hand may be signed electronically. The term “contracts, documents or instruments in writing” as used in this by-law includes without limitation deeds, mortgages, charges, conveyances, powers of attorney, transfers and assignments of property of all kinds (including specifically but without limitation transfers and assignments of shares, warrants, bonds, debentures or other securities), proxies for shares or other securities and all paper writings.

7. Notices

(a) Method of Giving Notices - Subject to the Act, any notice (which term includes any communication or other document) to be given (which term includes sent, delivered or served) pursuant to the Act the Articles, the by-laws or otherwise to a shareholder, director, officer or auditor may be given and, if so given, shall be sufficiently given if delivered personally to the person to whom it is to be given or if delivered to his recorded address or if mailed to him at his recorded address by prepaid ordinary mail

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(except in the event of an actual or threatened stoppage or slow-down in mail delivery, in which case an alternate method of giving notice shall be used) or if sent to him at his recorded address (which term shall include his recorded facsimile number or electronic mail address) by means of any prepaid transmitted or recorded communication, including by means of telecopy, facsimile or otherwise by electronic means. A notice so delivered shall be deemed to have been given and received when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box and shall be deemed to have been received at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the person to whom it is delivered or mailed did not receive the document within that time or at all. A notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or transmitted by or on behalf of the Corporation, and shall be deemed to have been received at the same time, unless there are reasonable grounds for believing that the person to whom it is sent did not receive the notice within that time or at all. Notwithstanding the foregoing, any notice so delivered (other than by prepaid ordinary mail), dispatched or transmitted to the recorded address after 5:00 p.m. local time at the place of delivery or on a Saturday, Sunday or banking holiday (a “non-business day”) at the place of delivery, shall be deemed to have been received at 8:00 a.m. local time on the first day thereafter that is not a non-business day. The corporate secretary may change or cause to be changed the recorded address of any shareholder, director, officer or auditor in accordance with any information believed by him to be reliable. Nothing in this section shall be construed as precluding the giving of notice by the Corporation in any other manner.

(b) Persons Entitled by Death or Operation of Law - Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share shall be bound by every notice in respect of such share which shall have been duly given to the shareholder from whom he derives his title to such share prior to his name and address being entered on the securities register (whether such notice was given before or after the happening of the event upon which he became so entitled) and prior to his furnishing to the Corporation the proof of authority or evidence of his entitlement prescribed by the Act.

8. Miscellaneous

(a) Invalidity of any provisions of this by-law. The invalidity or unenforceability of any provision of this by-law will not affect the validity or enforceability of the remaining provisions of this by-law.

(b) Omissions and errors. The accidental omission to give any notice to any shareholder, director, officer or auditor or the non-receipt of any notice by any shareholder, director, officer or auditor or any error in any notice not affecting its substance will not invalidate any action taken at any meeting to which the notice related or otherwise founded on the notice.

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9. Interpretation

In this by-law and all other by-laws of the Corporation words importing the singular number only include the plural and vice versa; words importing any gender include all genders; words importing persons include individuals, corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated organizations, joint ventures and governmental authorities; “board” means the board of directors of the Corporation; “Canada Business Corporations Act” means the Canada Business Corporations Act, R.S.C. 1985, Chapter C-44, c. B.16 as from time to time amended, re-enacted or replaced; “meeting of shareholders”; and terms that are not otherwise defined in this by-law have the meanings attributed to them in the Canada Business Corporations Act means an annual meeting of shareholders and/or a special meeting of shareholders.

10. Repeal of Previous By-laws

All previous by-laws of the Corporation are repealed as of the coming into force of this by-law. The repeal shall not affect the previous operation of any by-law so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to, the repealed by-laws before their repeal.

This By-law No. I was made by the directors of the Corporation                     , 2018 and confirmed by the shareholders of the Corporation on                     , 2018.

ADOPTED by the Board of Directors on the      day of                     2018.

GATEWAY CASINOS &
ENTERTAINMENT LIMITED
By:
	Name: Gabriel de Alba
	Title: Executive Chairman

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EX-10.4

EXECUTION VERSION

Exhibit 10.4

GATEWAY CASINOS & ENTERTAINMENT LIMITED

“VENDOR”

– and –

7588674 CANADA INC.

“VENDOR NOMINEE”

– and –

MESIROW REALTY SALE-LEASEBACK, INC.

“PURCHASER”

AGREEMENT OF PURCHASE AND SALE

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION		2
1.1	Definitions	2
ARTICLE 2 AGREEMENT OF PURCHASE AND SALE		12
2.1	Agreement of Purchase and Sale/Allocation of Purchase Price	12
2.2	Grand Villa Easement	13
2.3	Initial Deliveries by Vendor	13
2.4	Access to Property	13
2.5	Purchaser’s Conditions	15
2.6	Confidentiality	16
2.7	Subsequent Deliveries	16
2.8	Non-Refundable Sum	17
ARTICLE 3 PURCHASE PRICE		18
3.1	Deposit	18
3.2	Method of Payment of Purchase Price	19
3.3	No Adjustments	19
ARTICLE 4 CONDITIONS		20
4.1	Conditions for Vendor	20
4.2	Conditions for Purchaser	21
4.3	Non-Satisfaction of Conditions	22
4.4	Efforts to Satisfy Conditions	23
4.5	Competition Act	24
ARTICLE 5 CLOSING DOCUMENTS		25
5.1	Closing Arrangements	25
5.2	Vendor’s Closing Documents	25
5.3	Purchaser’s Closing Documents	29
5.4	Forms of Closing Documents	30
5.5	Registration and Other Costs	30
5.6	Transfer Closing Procedure	31
ARTICLE 6 REPRESENTATIONS, WARRANTIES AND COVENANTS		32
6.1	Vendor’s Representations	32
6.2	Purchaser’s Representations	36
6.3	Survival of Representations and Covenants	38
6.4	“As-Is” Purchase	40
6.5	Third Party Claims	41
6.6	Letters of Reliance	42
6.7	Estoppel Certificates and Subordination Agreements.	42
ARTICLE 7 OPERATION UNTIL CLOSING		43
7.1	Operation Before Closing	43
7.2	Damage or Expropriation Before Closing	43

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7.3	Leasing and Contracts	43
ARTICLE 8 GENERAL		44
8.1	Interpretation	44
8.2	Schedules	44
8.3	Gender and Number	45
8.4	Captions	45
8.5	Obligations as Covenants	45
8.6	Applicable Law	45
8.7	Currency	45
8.8	Invalidity	46
8.9	Amendment of Agreement	46
8.10	Time	46
8.11	Further Assurances	46
8.12	Entire Agreement	46
8.13	Waiver	47
8.14	Solicitors as Agents and Tender	47
8.15	Survival	47
8.16	Successors and Assigns	47
8.17	Assignment	47
8.18	Real Estate Commissions	48
8.19	Notice	48
8.20	Effect of Termination of Agreement	50
8.21	No Registration of Agreement	50
8.22	Counterparts	50
8.23	Site Profile Waiver	50
8.24	Fees, Costs and Expenses	50
8.25	Vendor’s Obligations Limited	50

                Schedule “A” Legal Descriptions

                Schedule “B” GST Declaration and indemnity

                Schedule “C” Waiver Notice

                Schedule “D” Permitted Encumbrances

                Schedule “E” Specific Excluded Property

                Schedule “F” Purchase Price Allocation and Initial Master Lease Rent Allocation

                Schedule “G” Data Room Index

                Schedule “H” Off Title Search Results

                Schedule “I” Master Lease Form

                Schedule “J” Existing Leases

                Schedule “K” Master Lease Beneficial Covenants Form

                Schedule “L” Landlord BCLC Agreement Form

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THIS AGREEMENT OF PURCHASE AND SALE made as of December 15, 2017,

BETWEEN:

GATEWAY CASINOS & ENTERTAINMENT LIMITED

(hereinafter referred to as the “Vendor”)

OF THE FIRST PART,

- and -

7588674 CANADA INC.

(hereinafter referred to as the “Vendor Nominee”)

OF THE SECOND PART,

- and -

MESIROW REALTY SALE-LEASEBACK, INC.

(hereinafter referred to as the “Purchaser”)

OF THE THIRD PART.

WHEREAS:

A. The Vendor is the beneficial owner of the Subject Assets;

B. The Vendor Nominee is the registered owner of the Cascades Strata Property, the Grand Villa Property and the Starlight Property;

C. The Cascades Freehold Nominee is the registered owner of the Cascades Freehold Property;

D. Each of the Cascades Strata Property, the Cascades Freehold Property, the Grand Villa Property and the Starlight Property are subject to a lease between the Vendor Nominee (and, with respect to the Cascades Strata Property and the Cascades Freehold Property, the Cascades Freehold Nominee), as landlord, and the applicable Master Lease Tenant, as tenant (the “Nominee Ground Leases”), a notice of which has been registered in the applicable LTO; and

E. The Vendor and Vendor Nominee have agreed to sell, transfer, assign, set over and convey the Subject Assets to the Purchaser and the Purchaser has agreed to purchase, acquire and assume the Subject Assets from the Vendor and Vendor Nominee on the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and the sum of Ten Dollars ($10.00) paid by each of the Vendor, the Vendor Nominee and the Purchaser to each other and for good and other valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions

The terms defined in this Section 1.1 shall have, for all purposes of this Agreement, the following meanings, unless the context expressly or by necessary implication otherwise requires:

“Agreement” means this agreement of purchase and sale and the schedules hereto, as amended from time to time in writing.

“Anti-Corruption Laws” has the meaning ascribed thereto in Subsection 6.2(e)(ii).

“Applicable Laws” means all federal, provincial, municipal and local statutes, laws, by-laws, regulations, ordinances and orders, directives and decisions of Governmental Authorities having jurisdiction (in each case having the force of law), including Gaming Laws.

“ARC Request” has the meaning ascribed thereto in Subsection 4.5(b).

“Article”, “Section”, “Subsection” and “Paragraph” mean and refer to the specified article, section, subsection and paragraph of this Agreement.

“Balance” has the meaning ascribed thereto in Subsection 3.2(b).

“BCLC” means British Columbia Lottery Corporation, and its successors and assigns.

“BCLS” or “British Columbia Land Surveyor”, is a professional land surveyor licensed to practice within the Province of British Columbia and is governed by the Association of British Columbia Land Surveyors.

“Buildings” means, collectively, all buildings, building systems, structures and fixed improvements located on, in or under the applicable Lands and all fixed equipment, improvements and fixtures owned by the Vendor and contained in or on such buildings, structures and fixed improvements, but excluding Excluded Tenant Property and Excluded Master Tenant Property.

“Business” means, collectively, the business(es) carried on by the Vendor and its affiliates and by its Tenants at the Property, including without limitation, their operations and businesses in respect of a Gaming Facility, hospitality, conference centers, as a landlord under Leases, and all related and ancillary businesses and operations.

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“Business Day” means any day other than a Saturday, Sunday or a statutory holiday in Toronto, Ontario or Vancouver, British Columbia.

“Cascades Freehold Nominee” means 1144801 B.C. LTD., the registered title holder of the Cascades Lands Freehold Lot.

“Cascades Freehold Property” means the Cascades Lands Freehold Lot and the Buildings located thereon.

“Cascades Lands Freehold Lot” means the lands and premises known municipally as 20389 Fraser Highway, Langley, British Columbia and as more particularly described in Part C-3 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Cascades Lands Strata Lots” means the lands and premises known municipally as #1-20393 and #2-20393 Fraser Highway, Langley, British Columbia each as more particularly described in Parts C-1 and C-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Cascades Lands Strata Lots Landlord’s Assignment” means the assignment by the Purchaser, as landlord under the Cascades Master Lease and owner of the Cascades Lands Strata Lots, to the Master Lease Tenant under the Cascades Master Lease of all of the Purchaser’s powers and duties under the Strata Property Act (British Columbia), applicable regulations, bylaws and rules in connection with the Cascades Lands Strata Lots, excluding the Purchaser’s responsibility under section 131 of the Strata Property Act (British Columbia) for fines or the costs of remedying a contravention of the bylaws or rules, but incorporating any limitations or other specifications provided for under Article 16 of the Cascades Master Lease as to be settled in accordance with Article 4.

“Cascades Lands Strata Lots Notice of Landlord’s Assignment” means the written notice to the applicable strata corporation of the Cascades Lands Strata Lots Landlord’s Assignment.

“Cascades Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Cascades Strata Property and the Cascades Freehold Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, Sublease Acknowledgment and Article 16 thereof as provided for in Article 4.

“Cascades Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Cascades Master Lease in the form attached hereto as Schedule “K”.

“Cascades Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Cascades Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Cascades Strata Property” means the Cascades Lands Strata Lots and all Buildings thereon.

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“Chattels” means the equipment, machinery, inventory, supplies and other chattels or moveables (including computer equipment) which are owned by the Vendor or leased by the Vendor, whether in connection with the Subject Assets or the Business.

“Claiming Party” has the meaning ascribed thereto in Subsection 6.5(a).

“Claims” means any claims, suits, proceedings, liabilities, obligations, losses, damages, penalties, judgments, costs, expenses, fines, disbursements, legal fees, interest, demands and actions of any nature or any kind whatsoever.

“Closing” means the closing of the Transaction contemplated by this Agreement, including without limitation the payment of the Purchase Price and the delivery of the Closing Documents.

“Closing Date” means, subject to the provisions of this Agreement, January 31, 2018, provided that the Purchaser shall have a one-time election to extend the Closing Date to February 14, 2018 by delivering written notice of such election to the Vendor prior to January 31, 2018.

“Closing Documents” means the agreements, instruments and other deliveries to be delivered to the Purchaser or the Purchaser’s Solicitors pursuant to Section 5.2 and the agreements, instruments and other deliveries to be delivered to the Vendor or the Vendor’s Solicitors pursuant to Section 5.3.

“Comfort Letter” has the meaning ascribed thereto in Subsection 4.2(k).

“Commissioner” means the Commissioner of Competition appointed under the Competition Act (Canada).

“Competition Act Approval” means:

(a) the issuance to the Purchaser of an advance ruling certificate by the Commissioner of Competition under Subsection 102(1) of the Competition Act (Canada); or

(b) both of (i) the waiting period, including any extension thereof, under Section 123 of the Competition Act (Canada) shall have expired or been terminated or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act (Canada) shall have been waived in accordance with paragraph 113(c) of the Competition Act (Canada), and (ii) the Purchaser shall have received a No-Action Letter and such letter shall not have been rescinded.

“Confidential Information Memorandum” means the confidential information memorandum prepared by the Vendor’s Real Estate Broker and provided by or on behalf of the Vendor to the Purchaser relating to the Subject Assets.

“Confidentiality Agreement” means the agreement between the Vendor and the Purchaser dated August 23, 2017, relating to confidentiality and other related matters, as amended or supplemented in writing.

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“Contracts” means, collectively:

(a) any and all contracts and agreements (other than Encumbrances which will be discharged by the Vendor on or before Closing and Leases), including all policies of insurance, property management contracts, asset management agreements and any contracts and agreements relating to the Property to which the Vendor or the previous owners are a party or by which the Vendor or the Property is bound in respect of the Business or the maintenance, operation, leasing, cleaning, security, fire protection or servicing of the Property.

(b) the Warranties relating to the Excluded Assets; and

(c) all contracts and agreements relating to any Chattels leased by the Vendor and located on the Property;

in each case as amended, supplemented, renewed or otherwise varied.

“Corporate Certificate re: Purchaser” means a corporate certificate by the Purchaser, repeating on Closing the representations and warranties of the Purchaser set out herein, in the form to be agreed upon by the Vendor and the Purchaser each acting reasonably, provided that if a representation or warranty is herein stated to be made as of a specified date or time, the certificate shall be subject to the same limitation.

“Corporate Certificate re: Vendor” means a corporate certificate by the Vendor, repeating on Closing the representations and warranties of the Vendor set out herein, in the form to be agreed upon by the Vendor and the Purchaser each acting reasonably, provided that if a representation or warranty is herein stated to be made as of a specified date or time, the certificate shall be subject to the same limitation.

“Data Room” means the electronic data room(s) set up by the Vendor or the Vendor’s Real Estate Broker.

“Deposit” has the meaning ascribed thereto in Subsection 3.1(b).

“Designee” has the meaning ascribed thereto in Section 8.17.

“Disclosed to the Purchaser” means information which has been or is made available for the Purchaser’s or the Purchaser’s Solicitors’ review as follows: (a) the information contained in, or supplied in connection with, the Confidential Information Memorandum, (b) all information in the Data Room from time to time and any documentation contained on any CD-Rom, DVD, flash drive or other computer disk(s) delivered to Purchaser as provided herein, (c) all information as is provided to the Purchaser or the Purchaser’s Solicitors electronically, (d) all information reviewed by the Purchaser or the Purchaser’s Solicitors at the offices of the Vendor or at a Property, and (e) all information which is sent to the Purchaser or the Purchaser’s Solicitors as provided herein, in each case, not later than 5:00 p.m. central time on the day which is two (2) Business Days prior to the Purchaser’s Condition Date.

“Due Diligence” has the meaning ascribed thereto in Subsection 2.5(a).

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“Easement” has the meaning ascribed thereto in Section 2.2.

“Encumbrances” means, in the case of any of the Subject Assets, all registered or unregistered mortgages, pledges, charges, liens, debentures, trust deeds, assignments by way of security, security interests, conditional sales contracts or other title retention agreements or similar interests or instruments charging, or creating a security interest in, such Subject Assets or any part thereof or interest therein, and any agreements, leases, options, easements, rights of way, restrictions, executions or other encumbrances (including notices or other registrations in respect of any of the foregoing) affecting title to the Subject Assets or any part thereof or interest therein.

“Environmental Laws” means all Applicable Laws, including any obligations or requirements arising under common law, in each case, relating to the protection of the environment, human health and safety or the manufacture, processing, distribution, use, treatment, storage, presence, disposal, packaging, labeling, recycling, transport, handling, containment, clean-up or other remediation of or corrective action in respect of any Hazardous Substance.

“Excluded Assets” means the Excluded Master Tenant Property and the Excluded Tenant Property.

“Excluded Master Tenant Property” means:

(a) the Business;

(b) all Chattels;

(c) all Leases;

(d) insurance policies related to the Subject Assets and to the Excluded Assets and all proceeds thereof;

(e) all bank accounts and marketable securities with respect to the Business;

(f) all Contracts;

(g) all Intellectual Property;

(h) the property particularly listed in Schedule “E” hereto; and

(i) all leasehold improvements, trade fixtures and equipment, systems and services owned or leased by the Master Lease Tenant and removable by the Master Lease Tenant pursuant to the terms of any of the Grand Villa Master Lease, the Starlight Master Lease or the Cascades Master Lease.

“Excluded Tenant Property” means all improvements, fixtures and equipment, systems and services owned or leased by any Tenant and which is removable by such Tenant pursuant to the terms of its Lease.

“Execution Date” means the date of execution of this Agreement by all parties hereto.

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“Existing Leases” means all Leases in existence as of the Execution Date, as set forth on Schedule “J”.

“First Deposit” has the meaning ascribed thereto in Subsection 3.1(a).

“Freehold Mortgagee” has the meaning ascribed thereto in the form of Master Lease attached hereto as Schedule “I”.

“Gaming Authority” means any Governmental Authority (including crown corporations), with regulatory, licensing or permitting authority or jurisdiction over any Gaming Facility (including the BCLC and GPEB).

“Gaming Facility” means any gaming or pari-mutuel wagering establishment, including any casino, and other property or assets related, ancillary or complementary thereto located at the Property.

“Gaming Law” means all applicable provisions of all: (a) constitutions, treaties, statutes or laws governing Gaming Facilities and rules, regulations, codes and ordinances of Gaming Authorities and all administrative or judicial orders or decrees or other laws pursuant to which any Gaming Authority possesses regulatory, licensing or permitting authority over gambling, gaming or Gaming Facility activities conducted at the Property, including without limitation, the GCA; and (b) orders, decisions, determinations, judgments, awards, decrees, approvals, consents and waivers of any Gaming Authority.

“Gaming Lessor” means a gaming service provider that, as a lessor, provides to other gaming services providers premises to be used as facilities for gaming, as set out in Section 29(1)(q) of the Gaming Control Regulation.

“GCA” means the Gaming Control Act, SBC 2002 Chapter 14.

“GCR” means the Gaming Control Regulation, B.C. Reg. 208/2002, as amended from time to time, made pursuant to the GCA.

“Governmental Authority” means any government, regulatory authority, government department, agency, commission, board, tribunal or court having jurisdiction on behalf of any nation, province or state or other subdivision thereof or any municipality, district or other subdivision thereof.

“GPEB” means Gaming Policy and Enforcement Branch, a division of British Columbia Ministry of Attorney General and its successors and assigns.

“Grand Villa Lands” means the lands and premises known municipally as 4331 Dominion Street, 4320/4350 Dominion Street, Burnaby, British Columbia, each as more particularly described in Parts A-1 and A-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Grand Villa Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Grand Villa Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, and Sublease Acknowledgment as provided for in Article 4.

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“Grand Villa Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Grand Villa Master Lease, in the form attached hereto as Schedule “K”.

“Grand Villa Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Grand Villa Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Grand Villa Property” means the Grand Villa Lands and all Buildings thereon.

“GST” means goods and services tax payable pursuant to the Excise Tax Act (Canada).

“GST Declaration and Indemnity” means the GST declaration and indemnity attached as Schedule “B” hereto.

“Hazardous Substance” means, as defined by Environmental Laws, any pollutant, contaminant, chemical, waste (including, liquid industrial waste, other industrial waste, toxic waste and hazardous waste) and deleterious substance (“deleterious substance” having the meaning ascribed thereto in the Fisheries Act (Canada)) and any substance, condition or chemical, biological or physical agent of any nature or kind which is prohibited, controlled, monitored or regulated pursuant to Environmental Laws.

“Initial Master Lease Rent” means the aggregate amount of basic rent that shall be payable in the first year of the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, being $35,000,000.

“Intellectual Property” means any goodwill, trade-marks, trade names, business or building names, internet domain names, logos and designs, commercial symbols, and other intellectual property of any kind owned by the Vendor and/or related to the Property.

“Landlord” means Purchaser, or its nominee or Designee, in its capacity as landlord under the Cascades Master Lease, the Grand Villa Master Lease and/or the Starlight Master Lease, as applicable.

“Landlord BCLC Agreement” means a written agreement, by and among Landlord, the applicable Master Lease Tenant, Vendor and BCLC, substantially in the form attached hereto as Schedule “L”, with respect to each Master Lease.

“Landlord Lender Agreement” means, as may be applicable, an agreement between the Landlord, the Master Lease Tenant and the mortgagee of the Master Lease Tenant’s leasehold interest in the form attached to the applicable Master Lease.

“Lands” means collectively, the Grand Villa Lands, the Starlight Lands, the Cascades Lands Freehold Lot and the Cascades Lands Strata Lots.

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“Leases” means all agreements to lease or sublease, leases, subleases, renewals of leases or subleases and all other rights, licenses and agreements granted by or on behalf of the Vendor or its predecessors in interest as owner of the Property, which entitle any Person to possess or occupy any portion of the Property, as applicable, together with all security, guarantees and indemnities of the tenants’, subtenants’, licensees’, or occupants’ obligations thereunder, in each case as amended, renewed, supplemented or otherwise varied, and including without limitation any parking agreements and storage space leases with respect to space on the Property; and “Lease” means any one of the Leases, but specifically excludes the Nominee Ground Leases and each of the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease.

“Letter of Intent” means the offer letter dated September 25, 2017, issued by the Purchaser and accepted by the Vendor on September 26, 2017, providing for the Transaction and contemplating the execution and delivery of this Agreement.

“LTO” means the Land Title Office, situate in British Columbia.

“Master Lease” means each of the Cascades Master Lease, the Grand Villa Master Lease and the Starlight Master Lease.

“Master Lease Beneficial Covenant” means each of the Cascades Master Lease Beneficial Covenant, the Grand Villa Master Lease Beneficial Covenant and the Starlight Master Lease Beneficial Covenant.

“Master Lease Tenant” means 1144803 B.C. LTD. in respect of the Cascades Strata Property and the Cascades Freehold Property, 1144808 B.C. LTD. in respect of the Grand Villa Property and 1144809 B.C. LTD. in respect of the Starlight Property, each of which is a wholly-owned (directly or indirectly) subsidiary of the Vendor.

“Material Value Reduction” has the meaning ascribed thereto in Subsection 6.3(c)(iv).

“No-Action Letter” means a letter from the Commissioner indicating that he does not, as of the date of the letter, intend to make an application under Section 92 of the Competition Act (Canada) in respect of the Transaction.

“Nominee Ground Leases” has the meaning ascribed thereto in Recital D.

“Nominee Shares” means all of the issued and outstanding shares in the capital of the Cascades Freehold Nominee.

“Norfolk Lot” means the lands and premises legally described as Parcel Identifier 000 847 054, Lot 51, Except Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 62993.

“Notice” has the meaning ascribed thereto in Section 8.19.

“Option Agreement” means an agreement between the Purchaser and, with respect to the Cascades Freehold Property and the Cascades Strata Property, the Cascades Freehold Nominee, on the one hand, and the Vendor or the applicable Master Lease Tenant, on the other hand,

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pursuant to which the Purchaser (and, if applicable, the Cascades Freehold Nominee) grants the Vendor or the applicable Master Lease Tenant one (1) option to lease the Cascades Strata Property, the Cascades Freehold Property, the Starlight Property and the Grand Villa Property, for two (2) consecutive terms of ten (10) years each and one (1) consecutive term of ten (10) years less one (1) day, in form and substance reasonably satisfactory to the parties (the “Option Agreements”).

“Permitted Encumbrances” means those Encumbrances and other items which are listed in Schedule “D” hereto (and for clarity, does not include any Master Leases).

“Person” means an individual, partnership, corporation, trust, unincorporated organization, government, or any department or agency thereof, and the successors and assigns thereof or the heirs, executors, administrators or other legal representatives of an individual.

“Proceeding” means any civil action or proceeding, whether insured or uninsured, (including any claim, demand, order, directive, suit, inquiry, hearing, discovery, investigation or other proceeding of whatever nature), whether threatened, commenced, pending, continuing or completed, and any appeal thereof.

“Property” means, collectively, the Grand Villa Property, the Starlight Property, the Cascades Strata Property and the Cascades Freehold Property.

“Property Information” has the meaning ascribed thereto in Section 2.2.

“Purchase Price” means Five Hundred Three Million Five Hundred and Ninety-Five Thousand Dollars ($503,595,000) in lawful money of Canada subject to any applicable GST in accordance with Section 5.5.

“Purchaser’s Condition Date” means January 24, 2018.

“Purchaser’s Conditions” means those conditions set forth in Section 4.2.

“Purchaser’s Expenses” has the meaning ascribed thereto in Subsection 6.3(c)(iii).

“Purchaser’s Solicitors” means Goldberg Kohn Ltd. and Boughton Law or such other firm or firms of solicitors as are appointed by the Purchaser from time to time and Notice of which is provided to the Vendor or the Vendor’s Solicitors.

“Rent” means and includes all rent and all other amounts payable by a Tenant pursuant to its Lease.

“Responding Party” has the meaning ascribed thereto in Subsection 6.5(a).

“Responsible Party” has the meaning ascribed thereto in Subsection 6.3(b).

“Second Deposit” has the meaning ascribed thereto in Subsection 3.1(b).

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“Starlight Lands” means the lands and premises known municipally as 350 Gifford Street, New Westminster, British Columbia and 3811 Boundary Road, Richmond, British Columbia each as more particularly described in Parts B-1 and B-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Starlight Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Starlight Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, and Sublease Acknowledgment as provided for in Article 4.

“Starlight Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Starlight Master Lease, substantially in the form attached hereto as Schedule “K”.

“Starlight Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Starlight Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Starlight Property” means the Starlight Lands and all Buildings thereon.

“Subject Assets” means all of the Vendor’s right, title, interest and estate in and to:

(a) the Lands;

(b) the Buildings;

(c) the landlord’s interest under the Nominee Ground Leases; and

(d) the Nominee Shares,

in each case, subject to Permitted Encumbrances (including, for greater certainty, the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease), but excluding the Excluded Assets.

“Subsequent Property Information” has the meaning ascribed thereto in Section 2.6.

“Survey Certificate” means a survey certificate or certificates prepared by a BCLS depicting the locations of improvements, structures and Buildings on the Lands, registered charges, dimension of the improvements, structures and Buildings, encroachments on the Lands, and other property information typical of survey certificates.

“Survival Period” has the meaning ascribed thereto in Subsection 6.3(a).

“Surviving Covenants” means those covenants of the parties which, in accordance with the express provisions of this Agreement, shall survive the Closing.

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“Tenants” means Persons having a right to possess or occupy any portion of the Property, now or hereafter, pursuant to a Lease.

“Third Party Claim” has the meaning ascribed thereto in Subsection 6.5(a).

“Title Insurer” means First American Title Insurance Company, FCT Insurance Company Ltd., or such other title insurance companies as are reasonably acceptable to the Purchaser.

“Title Policies” has the meaning ascribed thereto in Section 4.2(g).

“Transaction” means the purchase and sale of the Subject Assets provided for in this Agreement.

“Transfer Documents” has the meaning ascribed thereto in Subsection 5.2(a).

“Unsatisfied Condition” has the meaning ascribed thereto in Subsection 4.3(a).

“Vendor Nominee” means 7588674 Canada Inc.

“Vendor’s Conditions” means those conditions set forth in Section 4.1.

“Vendor’s Real Estate Broker” means Colliers Macaulay Nicolls Inc. and Colliers Capital Markets Canada.

“Vendor’s Solicitors” means Bennett Jones LLP.

“Waiver Notice” has the meaning ascribed thereto in Subsection 2.5(b).

“Warranties” means the warranties and guarantees, if any, in connection with the Excluded Assets or warranties and guarantees, if any, in connection with the Subject Assets, as the context applies.

ARTICLE 2

AGREEMENT OF PURCHASE AND SALE

2.1 Agreement of Purchase and Sale/Allocation of Purchase Price

(a) The Vendor hereby agrees to sell, transfer, assign, set over and convey the Subject Assets and all Warranties relating to the Subject Assets to the Purchaser and the Purchaser hereby agrees to purchase, acquire and assume the Subject Assets from the Vendor for the Purchase Price, on and subject to the terms and conditions of this Agreement.

(b) The Purchase Price shall be allocated as between the Starlight Property, the Cascades Strata Property, the beneficial interest in the Cascades Freehold Property and the Grand Villa Property as more particularly set out in Schedule “F” hereto, and for the purposes of the Starlight Master Lease, the Cascades Master Lease and the Grand Villa Master Lease, the Initial Master Lease Rent shall be allocated as more particularly set out in Schedule “F” hereto.

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Any further allocation of the Purchase Price, among the components of the Subject Assets, will be, subject to the following, on a basis agreed between the Vendor and the Purchaser by the Purchaser’s Condition Date and the Vendor and the Purchaser shall adopt such allocations for the purposes of all tax returns and filings respectively made by them or on their behalf. The Vendor and the Purchaser, each acting reasonably, shall use reasonable efforts to reach agreement on such further allocations of the Purchase Price, but failing such agreement, each of the Vendor and the Purchaser shall be entitled to make their own allocation.

2.2 Grand Villa Easement

To the extent that the Norfolk Lot is required for the Grand Villa Property to be in compliance with all Applicable Laws, the Vendor shall on Closing grant for the benefit of the Grand Villa Property such easements or restrictive covenants as may be required to effect compliance with Applicable Laws, in form and substance reasonably satisfactory to the parties (the “Easement”). The parties shall use good faith and diligent efforts to agree on the form of the Easement prior to the Purchaser’s Condition Date.

2.3 Initial Deliveries by Vendor

The Vendor shall make available to the Purchaser, either electronically, by computer disk or in hard copy form, in one or more Data Rooms or by delivery in accordance with Section 8.19, not later than three (3) Business Days following the Execution Date, the documents listed in Schedule “G” hereto, to the extent in the possession or control of the Vendor (collectively, the “Property Information”).

The Vendor shall continue to make the Property Information and Subsequent Property Information available until Closing or the termination of this Agreement. It is agreed the Property Information does not include all information registered on title to the Lands. It is the Purchaser’s obligation to obtain and review anything registered on title to the Lands.

2.4 Access to Property

(a) Subject to the Purchaser complying with each of its obligations herein and to Gaming Authorities and subject to any limitations imposed by the Vendor’s reasonable security requirements, and observing the rights of the Tenants under the Leases, from and after the execution of this Agreement until the Closing or earlier termination of this Agreement, the Purchaser and its agents, advisors, consultants, employees and lenders shall have access to the Property during the Vendor’s normal business hours upon reasonable notice to the Vendor (which notice shall not be less than two (2) Business Days’ prior written notice) at the Purchaser’s sole risk and expense, for the purpose of inspecting the Property including, without limitation, performing physical and structural inspections, soil tests and environmental audits provided that such inspections, tests and audits are conducted in accordance with Applicable Law and any limitations or requirements imposed by Gaming Authorities or the Vendor’s reasonable security requirements, and shall not unreasonably interfere with the normal operation of

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the Property and do not unreasonably interfere with any of the Tenants. The Purchaser and its agents, advisors, consultants, employees and lenders shall not have any communications with Tenants or any on-site employees of the Vendor or of Tenants in the course of such inspections. The Vendor shall have the right to accompany the Purchaser and its agents, advisors, consultants, employees and lenders on any inspections and shall have the right to approve invasive or intrusive inspections, tests and audits, if any are proposed by the Purchaser, prior to such inspections, tests and audits being undertaken, such approval not to be unreasonably withheld or delayed. No such inspections, tests or audits shall occur unless the Purchaser has given the Vendor at least two (2) Business Days’ prior written notice and complies with the foregoing requirements.

(b) The Purchaser shall repair any damage caused by inspections, tests and audits performed by the Purchaser or its agents, advisors, consultants, employees or lenders and fully indemnify the Vendor from all costs of repairing any damage or any loss caused by such inspections, tests or audits and all Claims relating to any such inspections, tests and audits and from all Claims incurred by the Vendor as a result thereof including, without limitation, any construction liens (or certificates of pending litigation) registered against the Property as a result thereof. For greater certainty, the Purchaser hereby agrees that the Deposit shall stand as security for such indemnity and shall be held by the Vendor’s Solicitors for a period of ten (10) Business Days after termination of this Agreement (if applicable), but not the Closing, during which time the Vendor may submit Notice of any Claims or potential Claims to the Purchaser and the Vendor’s Solicitors and if the Purchaser agrees in writing within a further five (5) Business Days with the Claim then the Vendor’s Solicitors shall forthwith pay the amount of the agreed upon Claim to the Vendor from the Deposit and remit the balance (if any) to the Purchaser, or if the Purchaser does not agree in writing with the Claim or does not respond in writing within such five (5) Business Day period, then the Vendor’s Solicitors shall pay the Deposit into court and thereupon shall be relieved of all responsibilities and liabilities with respect thereto. Provided the transaction herein is not completed, this indemnity shall survive termination of this Agreement regardless of the cause of such termination. Notwithstanding anything to the contrary, if the Transaction is completed, the Deposit shall be credited against the Purchase Price due on the Closing pursuant to and in accordance with Section 3.2.

(c) From and after the execution of this Agreement, the Vendor shall permit the Purchaser, at the Purchaser’s sole expense, to have reasonable access to and use reasonable commercial efforts to cause the Vendor’s third party architects, engineers, property, construction or leasing managers, consultants and contractors to be available to meet with the Purchaser and its agents, advisors, consultants, employees and lenders for the purpose of conducting information interviews relating to the management, operation, maintenance, condition, state of repair, construction or leasing of the Property, provided that the Vendor and its representatives shall be entitled to be present at and participate in such discussions. Save only as set out in Section 6.6, all updates of reports (and any related reliance letters) shall be obtained by the Purchaser or the Purchaser’s Solicitors at the expense of the Purchaser.

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(d) The Vendor hereby expressly authorizes the Purchaser and its agents, consultants and advisors to correspond with the appropriate Governmental Authority for the purpose of obtaining information which such Governmental Authorities have on record regarding the Property, including but not limited to information regarding the Property’s compliance with laws, bylaws, regulations and assessments; provided that, the Purchaser shall not correspond with any Gaming Authority with respect to the Vendor (other than for the sole purpose of satisfying the conditions in Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d) or correspond with the Canada Revenue Agency regarding the income tax payment status of the Vendor or its affiliates; the Vendor shall promptly, within three (3) Business Days of the Purchaser’s request, execute and deliver any authorizations reasonably required by the Purchaser in the Purchaser’s form to authorize the appropriate Governmental Authority to release such information to the Purchaser, save for the release of information specifically excluded in this Agreement. Notwithstanding the foregoing, the Purchaser acknowledges and agrees that the Vendor will deliver to the Purchaser in the Data Room those responses from Governmental Authorities received by the Vendor in 2017, and listed in Schedule “H” hereto and any updates thereto received by Vendor or Vendor’s Solicitors.

2.5 Purchaser’s Conditions

(a) On or before 5:00 p.m. on the Purchaser’s Condition Date the Purchaser may conduct (subject to compliance with other relevant provisions of this Agreement) any investigations, inspections, reviews, tests and audits relating to the Subject Assets (including, without limitation, title to the Subject Assets and compliance with Applicable Laws) (collectively referred to herein as the “Due Diligence”) which the Purchaser deems necessary or desirable in its sole discretion.

(b) Notwithstanding any other provisions of this Agreement, the obligation of the Purchaser to complete the Transaction pursuant to this Agreement is subject to the condition that the Purchaser is satisfied with the Due Diligence in its sole, absolute and unfettered discretion on or before 5:00 p.m. on the Purchaser’s Condition Date. The Purchaser shall be deemed not to be satisfied with the results of its Due Diligence unless it delivers to the Vendor on or before 5:00 p.m. on the Purchaser’s Condition Date a written notice in the form attached hereto (with the relevant details inserted therein) as Schedule “C” (the “Waiver Notice”) stating that it irrevocably waives the condition contained in this Subsection 2.5(b). In giving the Waiver Notice, the Purchaser waives any right to make requisitions as to title to, or the condition of, the Subject Assets and agrees to purchase the Subject Assets on an “as is, where is” basis pursuant to Section 6.4. If the Purchaser fails to give the Vendor the Waiver Notice prior to 5:00 p.m. on the Purchaser’s Condition Date, then this Agreement shall automatically terminate at such time and, upon such termination, the Purchaser and the Vendor shall be

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released from all obligations under this Agreement (except for those obligations which are expressly stated to survive the termination of this Agreement) and the First Deposit and all interest earned thereon shall be returned to the Purchaser, subject to Section 2.4(b). This provision shall survive the termination of this Agreement.

(c) For greater certainty, the Purchaser acknowledges and agrees that, in entering into this Agreement, the Purchaser has relied or will rely entirely upon its own inspections and investigations with respect to all aspects of the Subject Assets and the Transaction and, except for the representations and warranties expressly set out herein, the Purchaser is not relying on any information, written or oral, furnished by the Vendor or any other Persons on behalf of or at the direction of the Vendor.

2.6 Confidentiality

(a) The Purchaser agrees that until Closing (and in the event this Agreement is terminated for any reason other than its completion, also from and after such termination), the Purchaser shall comply with its obligations under the Confidentiality Agreement. For greater certainty, notwithstanding any provisions of the Confidentiality Agreement which provided for termination thereof upon the execution of this Agreement, each of the Vendor and the Purchaser agree that the provisions of the Confidentiality Agreement shall remain in full force and effect and survive the execution of this Agreement.

(b) The Purchaser shall not issue any press release or other public announcement or release information with respect to this Agreement to the press or the public unless the same has been approved both as to timing of release and content by the Vendor, which approval shall not be unreasonably withheld or unduly delayed. If such disclosure is required in order to comply with any Applicable Laws or the rules, orders or regulations of any stock exchange, the Vendor and Purchaser shall coordinate their disclosures so as to comply with Applicable Laws. The provisions of this Section 2.6 are supplementary to the provisions of the Confidentiality Agreement and do not in any way derogate from the obligations of the Purchaser pursuant to the Confidentiality Agreement except to the extent required for the Purchaser to comply with Applicable Laws. In the case of any conflict between the provisions of this Section 2.6 and the provisions of the Confidentiality Agreement, the former shall prevail.

2.7 Subsequent Deliveries

In the event that the Vendor (i) receives additional documents or information in the nature of the Property Information or receives documents that would amend or supplement the Property Information which, in each case, existed prior to the Purchaser’s Condition Date, or (ii) becomes aware of an inadvertent failure by the Vendor to provide any Property Information in accordance with Section 2.2, the Vendor shall promptly (but in no event more than two (2) Business Days after receipt or knowledge thereof) deliver

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the same to the Purchaser as provided in Section 2.2 (“Subsequent Property Information”) from time to time until and including up to the Purchaser’s Condition Date. In the event that any Subsequent Property Information is delivered to Purchaser after 5:00 p.m. central time on the day that is two (2) Business Days prior to Purchaser’s Condition Date, Purchaser’s Condition Date shall be extended by two (2) Business Days. In the event that any Subsequent Property Information is delivered prior to the Purchaser’s Condition Date, then the Purchaser’s sole remedy shall be to terminate this Agreement on or prior to the Purchaser’s Condition Date. If, following the Purchaser’s Condition Date, the Vendor delivers to the Purchaser any Subsequent Property Information, and such Subsequent Property Information discloses to the Purchaser information that the Purchaser was not previously aware of (“New Information”), and such New Information results in a Material Value Reduction (such New Information being “Material Adverse New Information”), then the Purchaser shall have the right to terminate this Agreement no later than three (3) full Business Days after the delivery of any such Material Adverse New Information to the Purchaser by Notice to the Vendor, in which event, if the Purchaser gives the Vendor Notice that the Purchaser exercises its right to terminate, this Agreement shall terminate, the Purchaser and the Vendor shall be released from all obligations under this Agreement (except those obligations which are stated to survive the termination of this Agreement), the Deposit and the interest earned thereon shall be returned to the Purchaser, subject to Section 2.4(b), and the Vendor shall reimburse the Purchaser for Purchaser’s Expenses, which obligations of the Vendor shall survive the termination of this Agreement. If, following the Purchaser’s Condition Date, the Vendor delivers New Information to the Purchaser which New Information does not result in a Material Value Reduction, the Purchaser shall not have the right to terminate this Agreement due to such New Information, but shall have the right (if any) to make a Claim pursuant to Section 6.3 of this Agreement. If any Subsequent Property Information is delivered by posting to the Data Site, the Vendor shall deliver notice thereof to the Purchaser and the Purchaser’s Solicitors on the date such Subsequent Property Information is posted, which notice may be sent by e-mail or overnight courier.

2.8 Non-Refundable Sum

In consideration of the sum of ten dollars ($10.00) now paid by each of the parties hereto to the other (the receipt and sufficiency of which is hereby acknowledged by both the Vendor and the Purchaser) the Vendor and the Purchaser acknowledge and agree that, although the obligations of the other party contemplated by this Agreement are subject to the satisfaction or waiver of the Purchaser’s Conditions or the Vendor’s Conditions, as the case may be:

(a) such conditions are not a condition to there being a binding agreement constituted by this Agreement; and

(b) this Agreement is not void, voidable, revocable, or otherwise capable of being terminated by any of the parties hereto until the time limited for the fulfillment of such conditions has expired.

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ARTICLE 3

PURCHASE PRICE

3.1 Deposit

(a) Prior to 11:00 a.m. on the third (3rd) Business Day following the Execution Date, the Purchaser shall deliver the amount of $5,000,000 (the “First Deposit”) by wire transfer to the Vendor’s Solicitors or the Title Insurer, at Purchaser’s option, to be invested by the Vendor’s Solicitors, or the Title Insurer, as applicable, in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada).

(b) Prior to 11:00 a.m. on the third (3rd) Business Day following receipt of the Waiver Notice, the Purchaser shall deliver the amount of $10,000,000 (the “Second Deposit”) by wire transfer to the Vendor’s Solicitors or the Title Insurer, as applicable, to be invested by the Vendor’s Solicitors or the Title Insurer, as applicable, in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada). The First Deposit and the Second Deposit if paid are collectively referred to as the “Deposit”.

(c) Except as otherwise provided herein, the Deposit, together with all interest earned thereon, is non-refundable and shall be forfeited to the Vendor if the Transaction fails to close due to a default by the Purchaser. Vendor acknowledges and agrees that its sole and exclusive remedy in the event of a default by the Purchaser hereunder shall be to terminate this Agreement and receive the Deposit, together with all interest accrued thereon, said disbursement to the Vendor representing the payment of liquidated damages representing a genuine pre-estimate of the loss resulting from such default and upon such termination of this Agreement all of the parties’ respective rights and obligations hereunder (except those obligations which are expressly stated to survive the termination of this Agreement) shall terminate. Purchaser and Vendor acknowledge and agree that the actual damages suffered by the Vendor resulting from such a breach would be difficult or impossible to measure and that the Deposit represents the parties’ good faith estimate of such damages. In further consideration thereof, the Vendor waives any right to specifically enforce the actual purchase of the Subject Assets by the Purchaser under this Agreement.

If this Agreement is terminated other than as the result of a default by Purchaser or failure by the Purchaser to give the Vendor the Waiver Notice prior to 5:00 p.m. on the Purchaser’s Condition Date in accordance with Section 2.4, the Deposit, together with all interest earned thereon, shall, subject to Subsection 2.4(b), be thereupon returned to the Purchaser, without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity.

(d) If the Transaction is completed, the Deposit shall be credited against the Purchase Price due on Closing and the interest accrued thereon shall be paid by the Vendor’s Solicitors or the Title Insurer, as applicable, directly to the Purchaser within a reasonable period of time following the Closing.

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(e) In holding and dealing with the Deposit and interest pursuant to this Agreement, the Vendor’s Solicitors are not bound in any way by any agreement other than this Agreement, and the Vendor’s Solicitors shall not be considered to assume any duty, liability or responsibility other than to hold the Deposit and interest in accordance with the provisions of this Agreement as stakeholder and not as agent for any party and to pay the Deposit and interest to the Person becoming entitled thereto in accordance with the terms of this Agreement. In the event of a dispute between the parties as to entitlement to the Deposit and interest, the Vendor’s Solicitors may, in their discretion, pay the Deposit and interest in dispute into court, whereupon the Vendor’s Solicitors shall have no further obligations relating to the Deposit and interest earned thereon. The Vendor’s Solicitors shall not, under any circumstances, be required to verify or determine the validity of any notice or other document whatsoever delivered to the Vendor’s Solicitors and the Vendor’s Solicitors are hereby relieved of any liability or responsibility for any loss or damage which may arise as the result of the acceptance by the Vendor’s Solicitors of any such notice or other document in good faith. The parties hereto acknowledge that the Vendor’s Solicitors may rely upon the provisions of this Section 3.1(e) and that such provisions shall only be effective in the event that the Deposit is held by the Vendor’s Solicitors.

(f) In the event that the Purchaser elects to have the Title Insurer hold the Deposit, prior to delivery thereof, the Purchaser, the Vendor and the Title Insurer shall enter into an escrow agreement consistent with the terms of this Section 3.1 and otherwise reasonably acceptable to the parties thereto.

(g) The provisions of this Section 3.1 shall survive the termination of this Agreement.

3.2 Method of Payment of Purchase Price

On Closing the Purchase Price shall be satisfied as follows:

(a) by application of the Deposit held by the Vendor’s Solicitors; and

(b) by payment to the Vendor or as the Vendor shall direct in writing, of an amount (the “Balance”) equal to the Purchase Price adjusted in accordance with Section 5.5 less the Deposit; the Balance shall be paid on Closing by the Purchaser by wire transfer to the trust account of the Purchaser’s Solicitors.

3.3 No Adjustments

(a) For the avoidance of doubt, the Vendor and the Purchaser acknowledge and agree that this Transaction constitutes a sale by the Vendor to the Purchaser of the Subject Assets, and a lease-back by the Vendor from the Purchaser of the Subject Assets on and subject to the terms set out in each of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease. In connection

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therewith: with the exception of the specific expenses referred to in Section 5.5, (i) all Contracts in existence on Closing are not being assigned to the Purchaser, and remain the property of the Vendor on Closing; (ii) as no Leases existing as of Closing are being assigned to the Purchaser, there will be no adjustments for Rents and deposits of Tenants under Leases on Closing, (iii) there shall be no adjustment of rent or any other amounts under the Nominee Ground Leases and (iv) all operational expenses, including property taxes, that would otherwise be the matter of a customary adjustment on the sale of land and buildings in British Columbia, are not to be adjusted, as they continue to be the responsibility of the Vendor, in its capacity as tenant under and in accordance with the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, as applicable. From and after Closing, the Purchaser’s entitlement to revenues to the Property is governed by the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, as applicable.

(b) The provisions of this Section 3.3 shall survive the Closing.

ARTICLE 4

CONDITIONS

4.1 Conditions for Vendor

The obligation of the Vendor to complete the Transaction shall be subject to fulfillment of each of the following conditions on or before the dates set out below:

(a) by the Closing Date, the Purchaser or its Designee shall be registered as a Gaming Lessor in accordance with the Gaming Laws in British Columbia;

(b) by the Closing Date, each of the Freehold Mortgagees, security agreements and related agreements shall, if requested by GPEB, be registered or approved in accordance with the Gaming Laws of British Columbia;

(c) by the Closing date, the Purchaser obtaining Competition Act Approval;

(d) on the Closing Date all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Purchaser shall have been complied with or performed in all material respects; and

(e) on the Closing Date, all of the representations and warranties of the Purchaser set out in Section 6.2 shall be true and accurate in all material respects as if made as of the Closing Date provided that, for greater certainty, it is confirmed that if a representation and warranty is stated in Section 6.2 to be made only with reference to a specified date or time, it shall not be required to be true and accurate on the Closing Date except with reference to such date and time; and

(f) by that day which is ten (10) days after the Execution Date, the Vendor and the Purchaser shall have settled, each acting in good faith and using reasonable commercial efforts, the terms of the Landlord Lender Agreement, the

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Subordination/Non-Disturbance Agreement, the form of Sublease Acknowledgment, as each such term is defined in the Master Lease, and with respect to the Cascades Master Lease only, the provision of Article 16 regarding the Cascades Lands Strata Lots, and to replace the forms attached thereto (or included therein) as of the Execution Date.

The conditions set forth in this Section 4.1 are for the benefit of the Vendor and may be waived in whole or in part by the Vendor (subject to Section 4.3(a)) by Notice to the Purchaser by the date and time set forth above for the satisfaction of each such condition.

4.2 Conditions for Purchaser

The obligations of the Purchaser to complete the Transaction shall be subject to fulfillment of each of the following conditions on or before the dates set out below:

(a) by the Purchaser’s Condition Date, delivery by the Purchaser to the Vendor of the Waiver Notice pursuant to Section 2.4(b);

(b) by the Closing date, the Purchaser obtaining Competition Act Approval;

(c) by the Closing Date, the Purchaser or its Designee shall be registered as a Gaming Lessor in accordance with the Gaming Laws in British Columbia;

(d) by the Closing Date, each of the Freehold Mortgagees, security agreements and related documents shall, if requested by GPEB or BCLC, be approved in accordance with the Gaming Laws of British Columbia;

(e) on the Closing Date, all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Vendor shall have been complied with or performed in all material respects;

(f) on the Closing Date, all of the representations and warranties of the Vendor set out in Section 6.1 shall be true and accurate in all material respects, subject to the restriction set forth in Section 6.3 of this Agreement on the right of the Purchaser to terminate this Agreement where the breach of such representations and warranties does not result in a Material Value Reduction;

(g) on or prior to the Closing Date, the Purchaser shall receive one or more title policies in the aggregate amount of the Purchase Price, in the forms approved by the Purchaser by the Purchaser’s Condition Date (the “Title Policies”);

(h) on or prior to the Closing Date, all parties thereto shall have executed and delivered a BCLC Agreement for each of the Cascades Strata Property, the Grand Villa Property and the Starlight Property;

(i) the Subject Assets shall be in the same or better condition as they are on the Execution Date, subject to ordinary wear and tear and, subject to Section 7.2 hereof, damage and expropriation, including without limitation the Subject Assets’ compliance with Applicable Laws;

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(j) on or prior to the Closing Date, Vendor shall have entered into an operating services agreement (or multi-casino operating services agreement) with the BCLC for each of the Cascades Strata Property, the Grand Villa Property and the Starlight Property, which agreements shall have an initial term expiring no earlier than the expiration date of the applicable Master Lease;

(k) on or prior to the Closing Date, each of the franchisor under the franchise agreement for the hotel located at the Cascades Strata Property and the property manager for the hotel located at the Grand Villa Property shall, where such consent is required, have consented to the Transaction and shall have entered into a “comfort letter” or similar agreement, in form and substance reasonably acceptable to the Purchaser, pursuant to which such franchisor or property manager, as applicable, acknowledges and agrees that upon a termination of the applicable Master Lease, the Purchaser or its designee may succeed to the interest of the Vendor under the franchise agreement or hotel management agreement, as applicable (each, a “Comfort Letter”). The Purchaser and the Vendor shall use good faith and diligent efforts to cause the forms of each Comfort Letter to be negotiated and approved by the Purchaser, the Vendor and the franchisor or hotel property manager, as applicable, prior to the Purchaser’s Condition Date; and

(l) by that day which is ten (10) days after the Execution Date, the Vendor and the Purchaser shall have settled, each acting in good faith and using reasonable commercial efforts, the terms of the Landlord Lender Agreement, the Subordination/Non-Disturbance Agreement, the form of Sublease Acknowledgment, as each such term is defined in the Master Lease, and with respect to the Cascades Master Lease only, the provision of Article 16 regarding the Cascades Lands Strata Lots, and to replace the forms attached thereto (or included therein) as of the Execution Date.

The conditions set forth in this Section 4.2 are for the benefit of the Purchaser and may be waived in whole or in part by the Purchaser (subject to Section 4.3(a)) by Notice to the Vendor by the date and time set forth above for the satisfaction of each such condition.

4.3 Non-Satisfaction of Conditions

(a) In the event any conditions set forth in Sections 4.1 and 4.2 are not satisfied or waived as therein provided on or before the applicable date or time referred to in Section 4.1 or 4.2, as the case may be (such condition being referred to as the “Unsatisfied Condition”), the Closing Date shall be automatically extended for a period of sixty (60) days to allow for the satisfaction of any Unsatisfied Condition. If the Closing Date is extended and the condition subsequently satisfied or waived, then the Closing Date shall be automatically accelerated to the fifth (5th) Business Day following such a waiver or satisfaction. If any such condition remains unsatisfied after such sixty (60) day period, this Agreement

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shall, upon Notice by the party having the benefit of the Unsatisfied Condition to the other party, be terminated and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement) unless the sole reason for the Unsatisfied Condition not being satisfied is the breach by a party hereto of an obligation under this Agreement, in which case, subject to the other relevant provisions of this Agreement, a Claim may be made against the Vendor, and the Deposit, together with all interest earned thereon shall be returned to Purchaser without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity, in the case of breach by the Vendor; or the Deposit shall be forfeited, in the case of breach by the Purchaser.

(b) If, on the Closing Date, all of the conditions in Section 4.1 have been satisfied or waived and the Purchaser is not in default under any provision of this Agreement and the Vendor is in default under any provision of this Agreement then the Purchaser, at its option, may elect either (i) if there has been a Material Value Reduction, to terminate this Agreement by Notice to the Vendor and, subject to Section 6.3 and, if applicable, Section 6.5, bring an action for damages against the Vendor, or (ii) to proceed to Closing (or require specific performance) of this Agreement and, subject to Section 6.3 and, if applicable, Section 6.5, bring an action for damages against the Vendor with respect to the Vendor’s default. In the event of a termination of this Agreement under this Section 4.3(b), the Deposit, together with all interest earned thereon shall be returned to Purchaser without prejudice to the Purchaser’s right to bring an action for damages caused by any a Material Value Reduction under this Section 4.3(b).

(c) Notwithstanding the foregoing, the Purchaser shall not be entitled to claim from the Vendor indirect, consequential, punitive or special damages.

(d) The provisions of this Section 4.3 shall survive the termination of this Agreement.

4.4 Efforts to Satisfy Conditions

(a) Without derogating from any party’s rights or obligations under this Agreement and subject to Section 4.5, it is agreed that:

(i) the Vendor shall act in good faith and use reasonable commercial efforts to satisfy, or cause to be satisfied, all of the conditions set forth in Sections 4.1 and 4.2 (as applicable) and shall promptly and diligently respond to requests for information, either from the Purchaser or from any applicable Gaming Authority or Governmental Authority; and

(ii) the Purchaser shall act in good faith and use reasonable commercial efforts to satisfy, or cause to be satisfied, all of the conditions set forth in Sections 4.1 and 4.2 (as applicable) and shall promptly and diligently respond to requests for information, either from the Vendor or from any applicable Gaming Authority or Governmental Authority.

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(b) Each party shall fully cooperate with the other party and provide the other party with information in its possession or control, and not otherwise available to the other party, necessary to seek the approvals or waivers referred to in Section 4.1 and 4.2. Each of the Purchaser and the Vendor shall act in good faith in determining whether or not a condition in its favour has been satisfied.

4.5 Competition Act

(a) Notwithstanding any other provision of this Agreement, the obligation of each of the Vendor and the Purchaser to complete the Transaction on Closing shall be subject to the condition that the Purchaser shall have, obtained the Competition Act Approval on or before one (1) Business Day prior to the Closing Date. The condition contained in this Section 4.5 cannot be waived by either party to this Agreement.

(b) Within seven (7) Business Days after the Execution Date or as soon thereafter as commercially reasonably possible, the Purchaser shall, with the cooperation of the Vendor, file with the Commissioner a detailed competition submission (an “ARC Request”) requesting that the Commissioner issue an advance ruling certificate pursuant to Section 102 of the Competition Act (Canada) or a No-Action Letter.

(c) Notwithstanding any other provision of this Agreement, the Purchaser will use reasonable commercial efforts to obtain Competition Act Approval and each of the Purchaser and the Vendor will use their reasonable commercial efforts to satisfy all requests for additional information received pursuant to any filings and submissions and any orders or requests made by the Commissioner as promptly as practical.

(d) The Purchaser and the Vendor will keep each other fully informed as to all communications with the Commissioner regarding the Transaction, including providing each other with drafts of any filings, requests or correspondence submitted to the Commissioner and will provide the Vendor final copies thereof, as well as copies of any requests or correspondence received from the Commissioner. The Purchaser shall provide the Vendor or the Vendor’s Solicitors with reasonable opportunity (not to exceed two (2) Business Days) to comment on any filings, submissions or correspondence with the Commissioner and to attend all meetings and participate in all telephonic and electronic communications with the Commissioner regarding this Transaction. The Purchaser and the Vendor shall co-operate with each other with respect to all communications with the Commissioner regarding the Transaction and provide each other with information in their possession that is reasonably necessary in respect of dealings with the Commissioner. Notwithstanding the provisions of this Section 4.5, the Purchaser and the Vendor are not required to share competitively sensitive or confidential information with each other, provided that such information is provided to

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counsel for the other party on an outside-counsel-only basis, which disclosure may redact confidential information. Notwithstanding the foregoing, the Vendor need not disclose the value of other offers for the Subject Assets, even to outside counsel.

(e) In the event the condition set forth in Section 4.5(a) is not satisfied as therein provided on or before the applicable date or time referred to in Section 4.5(a), this Agreement shall automatically be terminated and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement) unless the sole reason for such condition not being satisfied is the breach by a party hereto of an obligation under this Section 4.5, in which case, subject to the other relevant provisions of this Agreement, a Claim may be made against the Vendor and the Deposit, together with all interest earned thereon, shall be returned to Purchaser, without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity, in the case of breach by the Vendor; or the Deposit shall be forfeited, in the case of breach by the Purchaser.

(f) In this Section 4.5, for greater certainty the term Purchaser also includes any Designee.

(g) The provisions of this Section 4.5 shall survive the termination of this Agreement.

ARTICLE 5

CLOSING DOCUMENTS

5.1 Closing Arrangements

The Closing shall commence at 10:00 a.m. on the Closing Date at the office of the Purchaser’s Solicitors or at such other time or place as the parties shall mutually agree upon in writing and shall continue until the Closing is completed or this Agreement is validly terminated, in each case, in accordance with the terms hereof.

5.2 Vendor’s Closing Documents

At least two (2) Business Days prior to the Closing Date, subject to the provisions of this Agreement, the Vendor shall deliver, or cause to be delivered, to the Purchaser’s Solicitors the following, duly executed by the Vendor, the Vendor Nominee or the Master Lease Tenant, in each case where it is to be a party thereto:

(a) registrable Form A freehold transfers (the “Transfer Documents”) of all of the Lands but for the Cascades Lands Freehold Lot in favour of the Purchaser, Designee or nominee as directed by the Purchaser, subject only to Permitted Encumbrances;

(b) transfer of beneficial interest agreement of the Subject Assets in favour of the Purchaser or Designee

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(c) the Grand Villa Master Lease;

(d) the Grand Villa Master Lease Beneficial Covenant;

(e) the Grand Villa Nominee Agreement;

(f) the Starlight Master Lease;

(g) the Starlight Master Lease Beneficial Covenant;

(h) the Starlight Nominee Agreement;

(i) the Cascades Master Lease;

(j) the Cascades Master Lease Beneficial Covenant;

(k) the Cascades Nominee Agreement;

(l) the Landlord BCLC Agreement(s);

(m) an assignment and assumption of Permitted Encumbrances, in form and substance reasonably acceptable to the Vendor and the Purchaser, with respect to all applicable contractual Permitted Encumbrances, for which the applicable Permitted Encumbrances shall be agreed upon by the Vendor and the Purchaser prior to the Purchaser’s Condition Date;

(n) any specific assignment and/or assumption and/or non-disturbance or landlord acknowledgement agreements or replacement agreements which may be required under any of the Permitted Encumbrances or any hotel management or hotel license agreement governing a Property or by any Gaming Authority in respect of the Transaction;

(o) an assignment of the Vendor’s interest in all Warranties, licenses and permits (to the extent that such licenses and permits are assignable) to the extent that they relate to the Subject Assets and not to the operation of the Business;

(p) a statement of adjustments;

(q) a mutual undertaking to readjust;

(r) the Corporate Certificate re: Vendor;

(s) a direction as to the payee or payees of the Balance;

(t) a certificate of an officer of the Vendor confirming that the Vendor is not a “non-resident” of Canada within the meaning of the Income Tax Act (Canada);

(u) any documents or deliveries contemplated to be delivered by the Master Lease Tenant to the Purchaser, as landlord, pursuant to any of the Grand Villa Master

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Lease, the Cascades Master Lease, and the Starlight Master Lease, including without limitation, evidence of insurance as required thereby, estoppel certificates and a subordination, non-disturbance and attornment agreement to the Purchaser’s mortgagee as contemplated thereby, or other documents specifically contemplated thereby that may be required in connection with the Purchaser’s financing, provided that, in each case, the Purchaser provides written Notice to the Vendor specifically requiring same, no later than ten (10) Business Days prior to Closing;

(v) estoppel certificates for the Nominee Ground Leases, executed by the landlord and the tenant thereunder, confirming that such Nominee Ground Leases are in full force and effect and that there are no defaults by either party thereunder;

(w) estoppel certificates for all the Leases (each, an “Existing Lease Estoppel Certificate”), in the Purchaser’s form or such form as may be prescribed by the Leases. To the extent that the Vendor is unable to obtain and deliver to the Purchaser on or before the Closing Date Existing Lease Estoppel Certificates from those tenants not referred to in the preceding sentence despite using all reasonable commercial efforts to obtain the same, the Vendor will execute and deliver to the Purchaser and the Purchaser’s lender or lenders on the Closing Date a certificate of the Vendor for all such tenants (the “Replacement Estoppel Certificate”) certifying the information contemplated in the Purchaser’s form of Existing Lease Estoppel Certificate. The Replacement Estoppel Certificate will be deemed for all purposes to be a representation and warranty by the Vendor, subject to the limitations in Article 6, of the truth and accuracy of the matters set out in the Replacement Estoppel Certificate;

(x) registrable discharges of all Encumbrances registered against the Lands in the LTO which are not Permitted Encumbrances. However, if discharges of such Encumbrances are not available on the Closing Date, the Vendor shall be entitled to register a discharge of same within sixty (60) days after the Closing Date so long as the Encumbrance is in favour of a Canadian Schedule I chartered bank pursuant to the Bank Act (Canada), other British Columbia credit union, BNY Trust Company of Canada or Computershare Company of Canada (the “Existing Chargees”) and commercially reasonable undertakings regarding the discharge of such Encumbrances post-closing are complied with, including the provision to the Purchaser prior to the Closing Date of a payout statement for discharge purposes in respect of the Encumbrances to be paid out and an undertaking of the Vendor’s Solicitors satisfactory to the Purchaser’s Solicitors to pay the balance due under the Encumbrances out of the Balance once received by the Vendor’s Solicitors and provided that the Title Insurer has agreed to “insure over” and remove such Encumbrance as an exception on Purchaser’s Title Policies. For clarity, on or before the Closing Date, the Vendor shall deliver to the Purchaser registrable discharges for any financial Encumbrances and financing statements registered under personal property security legislation affecting the Subject Assets in favour of any entity that is not a Canadian Schedule I chartered bank pursuant to the Bank Act (Canada), other British Columbia credit union, BNY Trust Company of Canada or Computershare Company of Canada;

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(y) where applicable, registrable discharges in respect of all financing statements registered under personal property security legislation affecting the Subject Assets which are in respect of Encumbrances other than Permitted Encumbrances (subject to any provisions as to the release and registration of such discharges otherwise set out herein) or, alternatively, provided that such financing statements registered under personal property security legislation affecting the Subject Assets are in favor of a Canadian Schedule I bank pursuant to the Bank Act (Canada) or other British Columbia credit union, a certificate or “no interest” letter from such bank or credit union as the secured party in respect of such financing statement (which shall survive Closing) certifying that none of the financing statement(s) registered under personal property security legislation against the Vendor, the Cascades Freehold Nominee or the Vendor Nominee, affect the Subject Assets, such certificate or letter to be satisfactory to the Purchaser, acting reasonably;

(z) the Cascades Lands Strata Lots Landlord’s Assignment;

(aa) the Cascades Lands Strata Lots Notice of Landlord’s Assignment;

(bb) the Comfort Letters, executed by Vendor and the applicable property manager or franchisor;

(cc) legal opinions as to the due authorization, execution and delivery of the Master Leases and the Master Lease Beneficial Covenants and as to matters of Gaming Law in a form settled by the Purchaser’s Condition Date (which opinions shall be addressed to the Purchaser and the Purchaser’s lenders), as may be requested by the Purchaser or the Purchaser’s lenders, acting reasonably, or as requested by the Title Insurer in order to issue the Title Policies;

(dd) certified copies of resolutions of the directors or shareholders, as applicable, of the Cascades Freehold Nominee authorizing the transfer of the Nominee Shares to the Purchaser;

(ee) an assignment of the Nominee Shares to Purchaser, which assignment shall include an indemnity from the Vendor to the Purchaser and the Cascades Freehold Nominee against all losses, claims, actions, damages, liabilities and expenses arising from the existence or occurrence of any facts or circumstances whatsoever relating to the Nominee Shares or the Cascades Freehold Nominee that existed or occurred prior to the Closing Date, including without limitation, any known or unknown liabilities of the Cascades Freehold Nominee existing on or before the Closing Date;

(ff) registration of the Nominee Shares in the name of the Purchaser and issuance of a new share certificate to the Purchaser in respect of the Nominee Shares;

(gg) resignations executed by all persons holding positions as directors or officers of the Cascades Freehold Nominee and indemnities from the Purchaser in favour of such directors and officers;

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(hh) all minute books and other corporate records of the Nominees in the possession of the Cascades Freehold Nominee or the Vendor;

(ii) an assignment and assumption of the Nominee Ground Leases;

(jj) the Option Agreements;

(kk) the Easement;

(ll) such other documents and certificates, including without limitation an officer’s certificate as to the continued accuracy of the surveys provided in the Property Information, as may be reasonably requested by the Title Insurer in order to issue the Title Policies; and

(mm) any other closing documents, certificates and assurances as may be requisite in the reasonable opinion of the Purchaser’s solicitors for more perfectly and absolutely assigning, transferring, conveying and assuring to and vesting in the Purchaser, title to the Subject Assets free and clear of any lien, charge, encumbrance or legal notation other than the Permitted Encumbrances as contemplated herein.

5.3 Purchaser’s Closing Documents

Except where expressly provided otherwise, at least two (2) Business Days before the Closing Date, subject to the terms and conditions of this Agreement, the Purchaser shall deliver or cause to be delivered to the Vendor’s Solicitors (except where expressly provided otherwise) the following, duly executed by the Purchaser where it is a party thereto:

(a) the adjusted Balance (to be delivered on the Closing Date to the Title Insurer or Vendor’s Solicitors, at Purchaser’s option);

(b) those documents and agreements described in Section 5.2 to which the Purchaser is a party;

(c) a purchaser’s statement of adjustments;

(d) the Landlord BCLC Agreement(s);

(e) any documents or deliveries contemplated to be delivered by the Purchaser as landlord to the Master Lease Tenant as tenant pursuant to any of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, including without limitation any documents specifically contemplated thereby that may be required in connection with the Master Lease Tenant’s financing of its leasehold interest, including a Landlord Lender Agreement, provided that, in each case, the Vendor provides written Notice to the Purchaser specifically requiring same, no later than ten (10) Business Days prior to Closing;

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(f) any assumptions or notices specifically required of the Purchaser by the terms of the Permitted Encumbrances;

(g) the Corporate Certificate re: Purchaser;

(h) the GST Declaration and Indemnity;

(i) the Comfort Letters executed by the applicable Landlord;

(j) an assignment and assumption of Permitted Encumbrances, in form and substance reasonably acceptable to the Vendor and the Purchaser, with respect to all applicable contractual Permitted Encumbrances, for which the applicable Permitted Encumbrances shall be agreed upon by the Vendor and the Purchaser prior to the Purchaser’s Condition Date;

(k) a notice and direction to the applicable Governmental Authority directing that payment of all property tax vacancy credits or rebates for the period prior to or after Closing to be continued to be made to the Vendor (or the Master Lease Tenant as applicable);

(l) an assignment and assumption of the Nominee Ground Leases;

(m) the Option Agreements;

(n) the Easement; and

(o) all other documents which the Vendor reasonably requests to give effect to the Transaction and to result in the proper assumption of the Subject Assets by the Purchaser; and such other closing documents as may be requested by the Vendor, acting reasonably, whether or not similar to the foregoing.

5.4 Forms of Closing Documents

Except where expressly provided otherwise in this Agreement, or where it is provided that an agreement is to be satisfactory to a party in its sole and absolute discretion, the form and substance of all agreements to be delivered by the Purchaser and the Vendor on Closing shall be acceptable to both parties, each acting reasonably, provided that none of such documents shall contain covenants, representations or warranties which are in addition to or more onerous upon either the Vendor or the Purchaser than those expressly set forth in this Agreement.

5.5 Registration and Other Costs

(a) The Vendor and the Purchaser shall be responsible for the costs of the Vendor’s Solicitors and the Purchaser’s Solicitors, respectively, in respect of the Transaction.

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(b) Except as otherwise provided in this Section 5.5, the Purchaser and the Vendor shall each be responsible for and pay one-half (¹⁄₂) of all taxes, fees and other costs payable in connection with the conveyance or transfer of the Subject Assets, including without limitation, costs of registering the Transfer Documents by the Purchaser, all provincial and municipal land transfer taxes payable upon registration of the Transfer Documents (but excluding all provincial and municipal land transfer taxes payable upon registration of the Master Lease (or notices thereof) for which the Vendor shall be solely responsible), costs of the Title Policies, fees for obtaining the Competition Act Approval and fees for obtaining GPEB and BCLC approval.

The Vendor and Purchaser shall make all adjustments in their respective statements of adjustments in accordance with this Section 5.5(b). The parties shall make readjustments after Closing as necessary. Each party will pay to the other promptly such net amounts as are shown to be owed by it to the other on the readjustment statements.

(c) The Purchaser shall be responsible for the cost of any title insurance for its lenders. The Vendor shall be responsible for the costs of preparing and registering any discharges of Encumbrances with respect to the Subject Assets which are not Permitted Encumbrances.

(d) The Purchaser shall indemnify and save harmless the Vendor and its shareholders, directors, officers, employees and agents from all Claims incurred, suffered or sustained as a result of a failure by the Purchaser to file any returns, certificates, filings, elections, notices or other documents required to be filed by the Purchaser with any federal, provincial or other taxing authorities in connection with the conveyance or transfer of the Subject Assets.

(e) The Purchaser and the Vendor agree that if GST is exigible on this Transaction then it is the Vendor’s obligation to collect GST, and the Purchaser’s obligation to pay GST on Closing. The Purchaser confirms that it will be registered with CRA or any successor thereto in compliance with subdivision d of Division V of Part IX of the Excise Tax Act (Canada) relating to GST on the Closing Date. The Purchase Price does not include GST and the Purchaser confirms that it will be responsible for the GST payable with respect to the Transaction and will account directly to Canada Revenue Agency (“CRA”) with respect thereto in accordance with Schedule “B”. The Purchaser covenants and agrees that on Closing it shall either: (i) confirm its GST registration number to the Vendor on the Closing Date by providing a signed GST Declaration and Indemnity pursuant to Section 5.3 or (ii) pay, in addition to the Purchase Price, GST on the Purchase Price.

(f) The provisions of this Section 5.5 shall survive the Closing.

5.6 Transfer Closing Procedure

The Closing will be conducted in accordance with the following provisions:

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(a) all Closing Documents will be delivered in escrow to the offices of Boughton Law Corporation in accordance with this Agreement;

(b) the parties obtain confirmation from the Title Insurer that it is irrevocably committed to issue the Title Policies;

(c) the Purchaser will pay to the Vendor’s Solicitors or the Title Insurer, at Purchaser’s option, in trust the Balance, and thereupon the Closing Documents and closing funds shall be released from escrow; and

(d) Forthwith following receipt by the Vendor’s Solicitors or the Title Insurer, as applicable, of the payment pursuant to Section 5.6(b) and by the Purchaser’s Solicitors and the Vendor’s Solicitors the documents and items referred to in Section 5.2, the Purchaser will cause the Purchaser’s Solicitors to file the Transfer Documents in the appropriate LTO on the Closing Date concurrently with any security documents applicable to any mortgage financing arranged by the Purchaser in connection with the purchase of the Subject Assets.

After receipt by the Purchaser’s Solicitor of satisfactory post-filing registration searches of the Lands in the LTO, the Vendor’s Solicitors shall register the Master Leases.

In the event that any of the Transfer Documents, the security documents, or any other documents being registered in connection with the Transaction are rejected by the LTO for filing, the parties hereto shall cooperate as may be reasonably necessary to cause the proper registration of such documents. The provisions of this grammatical paragraph shall survive the Closing.

ARTICLE 6

REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1 Vendor’s Representations

The Vendor and the Vendor Nominee, hereby represents and warrants to and in favour of the Purchaser that as of the date of this Agreement and (except as otherwise provided in this Section 6.1) as of the Closing Date:

(a) the Vendor is the beneficial owner of the Subject Assets and has good and marketable title to the Subject Assets free and clear of all liens, claims, charges and encumbrances other than Permitted Encumbrances;

(b) the Vendor Nominee is the registered owner of legal title to the all of the Cascades Lands Strata Lots, the Grand Villa Lands and the Starlight Lands as nominee, agent and bare trustee for and on behalf of the Vendor; Cascades Freehold Nominee is the registered owner of the legal title to the Cascades Freehold Property;

(c) each of the Vendor Nominee and the Cascades Freehold Nominee is duly incorporated and validly subsisting under the laws of the province of British

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Columbia, neither the Vendor Nominee nor the Cascades Freehold Nominee is a reporting or public company and each of the Vendor Nominee and the Cascades Freehold Nominee is in good standing with all appropriate governmental offices of British Columbia;

(d) neither the Vendor Nominee nor the Cascades Freehold Nominee owns any assets of any kind, has no beneficial interest in the Subject Assets and has carried on no business or activity of any kind other than holding legal title to the Lands or the Cascades Lands Freehold Lots, as applicable, in trust for the Vendor and dealing with the Lands or the Cascades Lands Freehold Lots, as applicable, on behalf of and as directed by the Vendor;

(e) neither the Vendor Nominee nor the Cascades Freehold Nominee has any liabilities or indebtedness whatsoever, contingent or otherwise;

(f) neither the Vendor Nominee nor the Cascades Freehold Nominee has any employees;

(g) the Vendor is a corporation duly incorporated and subsisting under the laws of its place of incorporation, and has the necessary corporate authority, power and capacity to own its interest in the Subject Assets and to enter into this Agreement and all agreements, transfers, assignments and other documents to be delivered by it pursuant hereto and to complete the Transaction and perform its obligations under the documents to be entered into by it pursuant hereto in respect of the Transaction on the terms and conditions herein contained, all of which have been duly and validly authorized by all requisite proceedings and that this Agreement constitutes a legal, valid, and binding obligation of the Vendor in accordance with its terms;

(h) the obligations of the Vendor and Vendor Nominee under this Agreement and of Vendor and each Master Lease Tenant under each of the agreements, transfers, assignments and other documents entered into by it pursuant hereto (including without limitation, the Closing Documents), and the Transaction contemplated herein, have been duly and validly authorized by all requisite corporate proceedings and constitute (or will constitute on Closing, in the case of Closing Documents) legal, valid and binding obligations, enforceable against it in accordance with their terms;

(i) neither the entering into nor delivery of this Agreement nor the completion by the Vendor Nominee, the Cascades Freehold Nominee and Vendor of the Transaction will conflict with or constitute a default under any Applicable Laws; and no approval or consent is required of (i) any Governmental Authority or (ii) a party to any Permitted Encumbrance, in connection with the execution and delivery of this Agreement by the Vendor and the consummation of the Transaction, save and except for the Competition Act Approval, and as set out in each of Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d), and as may be set out in the Permitted Encumbrances;

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(j) the execution, delivery and performance of this Agreement by the Vendor does not result in the violation of any of the provisions of its constating documents or by-laws;

(k) except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, none of the Vendor, the Vendor Nominee or the Cascades Freehold Nominee has received written notice of any, and to the best of Vendor’s knowledge there are no, pending or threatened expropriation or rezoning proceedings relating to the Property;

(l) except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, none of the Vendor, the Vendor Nominee or the Cascades Freehold Nominee has received written notice which remains outstanding from any Governmental Authority or other Person with respect to any actual or threatened complaint, claim, citation, order (including any pollution control order, stop order, pollution abatement order, pollution prevention order or remediation order), directive, request for information, statement of claim or notice of investigation concerning any alleged violation of, liability or potential liability under any Applicable Laws relating to environmental matters with respect to the Property (each, a “Hazardous Material Claim”) and Vendor has no knowledge of any actual or threatened Hazardous Material Claim;

(m) to the best knowledge of the Vendor, except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, there is no Proceeding relating to the Vendor, the Vendor Nominee or the Cascades Freehold Nominee or affecting the Subject Assets or the Cascades Freehold Property, which could reasonably be expected to materially adversely affect the Subject Assets or the Cascades Freehold Nominee, and there is not, outstanding against the Vendor or the Cascades Freehold Nominee any judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator which could reasonably be expected to materially adversely affect the Subject Assets or the Cascades Freehold Nominee;

(n) the Vendor is not a non-resident of Canada for the purposes of the Income Tax Act (Canada);

(o) the Vendor is duly registered under Subdivision D of Division V of the Excise Tax Act (Canada) and the registration number assigned to the Vendor by CRA is 81098 3262 RT0001;

(p) as of the Execution Date, there are no collective bargaining agreements or proceedings under the British Columbia Labour Relations Code which are or will affect the Property on Closing other than as shall be Disclosed to the Purchaser prior to 5:00 p.m. central time on the third (3rd) Business Day prior to the Purchaser’s Condition Date;

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(q) except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, the Vendor has not received any notice from any Governmental Authority (other than a Gaming Authority) of zoning, building, fire, water, use or other Applicable Law violations (other than Gaming Laws violations) issued in respect of the Property which remain uncorrected;

(r) except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, the Vendor has not received (i) any notice from any Gaming Authority of any Gaming Laws violations issued in respect of the Property which remain uncorrected, or (ii) any notice of investigations from any Gaming Authority in respect of any gaming operations and/or the Property and which, in either case, if uncorrected could reasonably be expected to materially adversely affect the Property or the Business;

(s) there will be no tenancies affecting the Subject Assets at the time of Closing other than the Existing Leases and other Leases delivered to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date;

(t) The Property Information, including all Leases, and the Subsequent Property Information Disclosed to Purchaser are complete copies of such materials. To the knowledge of the Vendor, the Property Information and Subsequent Property Information includes all site plans, surveys, plans and specifications, Phase I and Phase II environmental reports, property condition reports, the most recent title commitments, all unregistered documents that would affect title to the Subject Assets or bind Purchaser, after Closing, in each case, affecting the Subject Assets and in Vendor’s possession or control;

(u) except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, at the time of Closing, the Vendor and the Cascades Freehold Nominee shall have prepared and filed all tax returns and other documents required to be filed by it and such returns and documents are complete and correct; the Vendor and the Cascades Freehold Nominee shall have paid all taxes which are due and payable by it on or before the Closing Date; and the Vendor shall have made adequate provision for taxes payable for each current period for which tax returns are not yet required to be filed and withheld from each amount paid or credited to any person the amount of taxes required to be withheld therefrom and has remitted such taxes to the proper tax or other receiving authorities within the time required under applicable legislation;

(v) to the best knowledge of the Vendor, except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, at the time of Closing, the Vendor shall not have any indebtedness to any person, firm, corporation or governmental authority which

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might now or hereafter by operation of law or otherwise constitute a lien, charge or encumbrance on the Subject Assets, or any part thereof, or which could affect the right of the Purchaser to own, occupy and obtain revenue from the Subject Assets, or any part thereof; and

(w) to the best knowledge of the Vendor, except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, there is no claim or litigation pending, threatened with respect to the Vendor, the Vendor Nominee, or the occupancy or use of the Subject Assets by the Vendor which could affect the right of the Purchaser to own, occupy, and obtain revenue from the Subject Assets or the ability of the Vendor or Vendor Nominee to perform its obligations under this Agreement.

For the foregoing purposes of this Section 6.1, “to the best knowledge of the Vendor” or similar words mean to the Vendor’s actual knowledge after inquiry of the head of operations for the Property and any third-party property managers for the Property. This Section 6.1 shall survive the Closing, subject to Section 6.3 and, if applicable, Section 6.5.

If before the Closing either party acquires knowledge of any condition which would make any of the representations and warranties set forth in Section 6.1 not true, such party shall promptly notify the other party of such condition. If the Vendor is not able to cure any such condition prior to the Closing Date, and if such condition results in a Material Value Reduction, the Purchaser may terminate this Agreement by delivering written notice to the Vendor within ten (10) days after the date that the Vendor notifies the Purchaser that the Vendor is unable to cure such condition. If such condition was the result of the Vendor’s misrepresentation in any material respect or default hereunder (any such condition arising by the Vendor’s misrepresentation in any material respect or default hereunder, being a “Material Condition”), in addition to the termination right set forth in the preceding sentence, the Vendor shall reimburse the Purchaser for the Purchaser’s Expenses, which obligation of the Vendor shall survive the termination of this Agreement. Upon such termination, the Deposit, together with all interest earned thereon, shall be refunded to the Purchaser and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement). If the Purchaser fails to terminate this Agreement within such ten (10) day period, the Purchaser shall be deemed to waive its right of termination with respect to any such condition. In the event of such a waiver or in the event that the Purchaser does not have the right to terminate this Agreement as a result of such condition, the Purchaser shall retain its right to make a Claim under Section 6.3 with respect to such condition.

6.2 Purchaser’s Representations

The Purchaser hereby represents and warrants to and in favour of the Vendor that as of the date of this Agreement and as of the Closing Date:

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(a) the Purchaser is a corporation duly incorporated and subsisting under the laws of its place of incorporation (and is or will be extra-provincially registered in British Columbia if necessary), and has the necessary corporate authority, power and capacity to own the Subject Assets and to enter into this Agreement and all agreements, transfers, assignments and other documents to be delivered by it pursuant hereto and to complete the Transaction and perform its obligations under the documents to be entered into by it pursuant hereto in respect of the Transaction on the terms and conditions herein contained;

(b) this Agreement and the obligations of the Purchaser hereunder and each of the agreements, transfers, assignments and other documents entered into by the Purchaser pursuant hereto (including, without limitation, the Closing Documents) and the Transaction contemplated herein will have been duly and validly authorized by all requisite corporate proceedings of the Purchaser and constitute (or will constitute on Closing, in the case of the Closing Documents) legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with its and their terms;

(c) neither the entering into nor delivery of this Agreement nor the completion by the Purchaser of the Transaction will conflict with or constitute a default under any Applicable Laws; and no approval or consent of any Governmental Authority is required in connection with the execution and delivery of this Agreement by the Purchaser and the consummation of the Transaction, save and except for the Competition Act Approval and as set out in each of Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d);

(d) the execution, delivery and performance of this Agreement by the Purchaser does not result in the violation of any of the provisions of the constating documents or by-laws of the Purchaser;

(e) in respect of the following matters:

(i) the Purchaser has not offered, promised, given or agreed to give and shall not during the term of this Agreement offer, promise, give or agree to give to any Person any bribe on behalf of the Vendor or otherwise with the object of obtaining a business advantage for the Vendor or otherwise;

(ii) the Purchaser has not engaged in any activity or practice which would constitute an offence under the Foreign Corrupt Practices Act of the United States and the applicable anti-bribery and/or anti-corruption laws of Canada (“The Anti-Corruption Laws”);

(iii) the Purchaser has in place, its own policies and procedures to ensure compliance with the Anti-Corruption Laws;

(iv) the Purchaser has in place, effective accounting procedures and internal controls necessary to record all expenditures in connection with this Agreement, which enable the Vendor and the Purchaser to readily identify the Purchaser’s financial and related records in connection with this Agreement;

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(v) from time to time during the term of this Agreement including without limitation, on Closing, at the reasonable request of the Vendor, the Purchaser shall confirm in writing that it has complied with its representations under this Sections 6.2(e)(ii) through 6.2(e)(iv), inclusive and shall provide any information reasonably requested by the Vendor in support of such compliance; and

(vi) the Purchaser shall notify the Vendor as soon as practicable of any breach of any of the representations contained in this Sections 6.2(e)(ii) through 6.2(e)(iv), inclusive of which it becomes aware.

(f) As of the Closing Date, the Purchaser shall not have engaged any asset or property manager in respect of the Subject Assets.

This Section 6.2 shall survive the Closing, subject to Section 6.3 and, if applicable, Section 6.5.

6.3 Survival of Representations and Covenants

(a) The representations, warranties, and certifications contained in this Agreement shall not merge on Closing and, shall survive until the expiry of one (1) year following the Closing Date (the “Survival Period”). The party which has received a representation, warranty or certification in this Agreement shall give Notice to the other party of each breach of the representation, warranty, or certification, together with details thereof, within a reasonable time after becoming aware of the breach and in any event not later than the last day of the Survival Period. Notwithstanding any other provision of this Agreement, no Claim may be asserted or pursued against any party hereto, or any action, suit or other proceeding commenced or pursued, for or in respect of any breach of any representation, warranty or certification made by such party in this Agreement unless Notice of such Claim is received by such party describing in detail the facts and circumstances with respect to the subject matter of such Claim on or prior to the last day of the Survival Period, irrespective of whether the subject matter of such Claim shall have occurred before or after such date; and upon the expiry of the Survival Period all such representations, warranties, and certifications shall cease to have any effect except to the extent a written Claim has been previously given in respect thereof in accordance with this Subsection 6.3(a) and Subsection 6.3(b). Neither the Vendor nor the Purchaser shall be entitled to make any Claim in respect of a breach of a representation, warranty or indemnity from the other party that it had actual knowledge was false or untrue as of the Closing Date.

(b) Notwithstanding the foregoing provisions of this Section or any other provisions of this Agreement or any Closing Documents, the liability of any party to this

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Agreement (herein referred to as the “Responsible Party”) after Closing in respect of any representation, warranty, or certification made by such Responsible Party in or pursuant to this Agreement or in any Closing Document made by such Responsible Party shall be subject to and limited by the following:

(i) the time limits contained in Subsection 6.3(a) as applicable;

(ii) no Claim shall be brought against the Vendor by the Purchaser until the aggregate of all the amounts claimed pursuant to such Claim or Claims that have then been made by the Initiating Party against the Vendor exceed Five Hundred Thousand dollars ($500,000) provided that if the aggregate of all such Claims exceeds Five Hundred Thousand dollars ($500,000), the Purchaser shall be entitled to recover the full amount of the Claim or Claims including the initial Five Hundred Thousand dollars ($500,000) and only if such Claim or Claims are successful;

(iii) if any breach of any such representation, warranty or certification or Surviving Covenant can be remedied within a reasonable period of time (not to exceed one hundred eighty (180) days after Notice thereof is given) the Responsible Party shall be given a reasonable opportunity to remedy any such breach, provided such breach is capable of being remedied and granting such opportunity does not, in the opinion of the Initiating Party, acting reasonably, adversely affect the Initiating Party; and

(iv) the provisions of Subsection 6.3(a) and Section 6.5 if applicable.

(c) It is agreed that, notwithstanding any other provision of this Agreement:

(i) the Purchaser shall not have the right to terminate this Agreement as a result of the breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement, unless it results in a Material Value Reduction;

(ii) if there is any breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement that does not result in a Material Value Reduction, then the Purchaser shall not have any right to terminate this Agreement as a result of such breach, but the Purchaser shall have the right to bring an action for damages, if any, which may otherwise be asserted subject to the provisions of this Section 6.3 and, if applicable, Section 6.5;

(iii) if there is any breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement as a result of a Material Condition that results in a Material Value Reduction, then the Purchaser shall have the right to terminate this Agreement as a result of such breach as set out in Section 6.1, and in such event the Deposit and all interest earned thereon shall be returned to the Purchaser, and the Vendor shall reimburse the Purchaser for its reasonable and customary third-party out

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of pocket costs and expenses incurred in connection with its negotiation of this Agreement, due diligence and obtaining financing for the transactions contemplated in this Agreement, including without limitation, all commitment fees, lenders’ rate lock expenses and legal fees incurred to its acquisition lenders following the Purchaser’s Condition Date (collectively, “Purchaser’s Expenses”) up to the amount of the Deposit; and

(iv) for greater certainty, it is confirmed that reference to a breach of any representation and warranty means such representation and warranty is not true and accurate. “Material Value Reduction” means that, in the Purchaser’s reasonable determination, the fair market value of the Subject Assets is at least two percent (2%) of the Purchase Price less than what the value of the Subject Assets would be if such representation and warranty were true and accurate.

(d) This Section shall survive the Closing or the termination of this Agreement.

6.4 “As-Is” Purchase

The Purchaser acknowledges and agrees that:

(a) except for the representations, warranties and covenants of the Vendor expressly set out in Section 6.1 or in the Closing Documents, in entering into this Agreement and closing the Transaction, the Purchaser has relied and will continue to rely entirely and solely upon its own inspections and investigations with respect to the Subject Assets;

(b) except as otherwise expressly provided for in this Agreement or in the Closing Documents (including, for clarity, the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease), the Subject Assets are being purchased and assumed by the Purchaser on an “as is, where is” basis as of the date of this Agreement and without any express or implied agreement or representation and warranty of any kind whatsoever or any liability or obligation of the Vendor as to the physical or financial condition, suitability for development, fitness for a particular purpose, merchantability, title, physical characteristics, profitability, use or zoning, environmental condition, existence of latent defects, quality, or any other aspect or characteristic thereof;

(c) except as otherwise expressly provided for in this Agreement, the Vendor makes no agreements or representations and warranties concerning any statements made or other information delivered or made available to the Purchaser (whether by the Vendor, the Vendor’s Real Estate Broker, the Vendor’s Solicitors, or any other agents, representatives or advisors of the Vendor or any of each such Person’s respective affiliates, or any other Person) with respect to the Subject Assets, whether as part of the information Disclosed to the Purchaser or otherwise;

(d) except as otherwise expressly provided for in this Agreement, the Property Information is provided to the Purchaser without representation or warranty and the Purchaser shall rely entirely and solely upon its own investigations and inspections; and

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(e) except as otherwise expressly provided for in this Agreement or in the Closing Documents (including, for clarity, the Master Leases and the Master Lease Beneficial Covenants), the Vendor shall have no obligations or responsibility to the Purchaser after Closing with respect to any matter relating to the Subject Assets or the condition thereof.

The provisions of this Section 6.4 shall survive Closing or the termination of this Agreement.

6.5 Third Party Claims

(a) In the case of any Claim (a “Third Party Claim”) made by any third party (which shall not include affiliates or related parties to the Purchaser or the Vendor) after the Closing against either the Vendor or the Purchaser (such party hereto against whom such Third Party Claim is made being referred to herein as the “Claiming Party”) with respect to which the Claiming Party seeks to make a Claim against the other party to this Agreement (the “Responding Party”) as a result of the breach by the Responding Party of any representation, warranty or certification made by such Responding Party in or pursuant to this Agreement or any Closing Document or the breach by such Responding Party of any Surviving Covenant made by such Responding Party, or pursuant to any indemnity made by such Responding Party in this Agreement which survives Closing, the Claiming Party shall give Notice to the Responding Party of any such Third Party Claim forthwith after receiving notice thereof. If the Claiming Party fails to give such Notice to the Responding Party, such failure shall not preclude the Claiming Party from making such claim against the Responding Party, but its right to indemnification may be reduced to the extent that such delay prejudiced the defence of the Third Party Claim or increased the amount of liability or the cost of the defence.

(b) The Responding Party shall have the right, by Notice to the Claiming Party given not later than thirty (30) days after receipt of the Notice referred to in Subsection 6.5(a), to assume the control of the defence, compromise or settlement of the Third Party Claim, so long as there is no conflict between the position of the Claiming Party and the Responding Party.

(c) Upon the assumption of control of any Third Party Claim by the Responding Party as contemplated by Subsection 6.5(b), the Responding Party shall diligently proceed with the defence, compromise or settlement of the Third Party Claim at its sole expense, including, if necessary, employment of counsel reasonably satisfactory to the Claiming Party and, in connection therewith, the Claiming Party shall co-operate fully (but at the expense of the Responding Party) to make available to the Responding Party all pertinent information and witnesses under the Claiming Party’s control, make such assignment and take such other steps as

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in the opinion of counsel for the Responding Party, acting reasonably, are reasonably necessary to enable the Responding Party to conduct such defence. The Claiming Party shall have the right to participate in the negotiation, settlement or defence of any Third Party Claim at its own expense and no Third Party Claim shall be settled, compromised or otherwise disposed of without the prior written consent of the Claiming Party, such consent not to be unreasonably withheld or delayed. The parties acknowledge and agree that it shall not be unreasonable for the Claiming Party to withhold approval of a settlement or compromise of a Third Party Claim if such settlement or compromise imposes any obligations or liabilities on the Claiming Party or the Subject Assets unless such liabilities and obligations are assumed by the Responding Party. If the Responding Party elects to assume control of the Third Party Claim as contemplated by Subsection 6.5(b), the Claiming Party shall not pay, or permit to be paid, any part of the Third Party Claim unless the Responding Party consents in writing to such payment, such consent not to be unreasonably withheld or delayed, or unless the Responding Party, subject to the last sentence of Subsection 6.5(d), withdraws from the defence of such Third Party Claim or unless a final judgment from which no appeal may be taken by or on behalf of the Responding Party is entered against the Claiming Party in respect of such Third Party Claim.

(d) If the Responding Party fails to give Notice to the Claiming Party as contemplated by Subsection 6.5(b) or fails to defend or, if after commencing or undertaking such defence, fails to prosecute or withdraws from such defence, the Claiming Party shall have the right to undertake the defence or settlement thereof. If the Claiming Party assumes the defence of any Third Party Claim and proposes to settle it prior to a final judgment thereon or to forego any appeal with respect thereto, then the Claiming Party shall give the Responding Party prompt Notice thereof, and the Responding Party shall have the right to participate in the settlement or assume or reassume the defence of such Third Party Claim.

(e) This Section 6.5 shall survive the Closing.

6.6 Letters of Reliance

The Vendor agrees to provide the Purchaser and the Purchaser’s lenders, at the Purchaser’s request, with letters of reliance from Keystone Environmental Ltd. with respect to its Environmental Site Investigations for each Property, which letters of reliance shall be on the consultant’s standard form.

6.7 Estoppel Certificates and Subordination Agreements.

The Vendor shall use good faith and commercially reasonable efforts to obtain estoppel certificates and/or subordination agreements for any Existing Leases or Leases entered into after the Execution Date requested by the Purchaser in form and substance reasonably acceptable to the Purchaser.

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ARTICLE 7

OPERATION UNTIL CLOSING

7.1 Operation Before Closing

From the date hereof until Closing, the Vendor shall insure, repair, and maintain the Property in accordance with the management practices of a reasonably prudent owner of lands and buildings of a similar quality, type and size as the Property in British Columbia.

7.2 Damage or Expropriation Before Closing

The interest of the Vendor in and to the Property shall be at the risk of the Vendor until Closing. If loss, damage or expropriation of the Property occurs prior to Closing, Vendor shall promptly notify the Purchaser of such loss, damage or expropriation. If the cost to repair such damage, or the value of the property taken, in the case of an expropriation, exceeds Five Million Dollars ($5,000,000) or cannot be repaired within one hundred and eighty (180) days, then the Vendor or the Purchaser shall have a period of five (5) Business Days following such occurrence (or notice thereof) to terminate this Agreement by giving Notice to the other party. In the event of such termination, the Deposit shall be returned to the Purchaser, together with interest accrued thereon, and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement). If neither the Purchaser nor the Vendor terminates this Agreement as aforesaid, then notwithstanding the extent of such damage or destruction, (a) the Transaction shall be completed and the Master Lease Tenant shall pay all rent required to be paid under each of the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease, as and when due in accordance with the terms thereof, without abatement, as if such damage or destruction had not occurred, (b) the Master Lease Tenant shall repair and/or rebuild such damage following Closing as required by the terms of the Grand Villa Master Lease, the Cascades Master Lease or the Starlight Master Lease, as applicable and (c) all proceeds of insurance and awards for expropriation shall be held and disbursed as provided in the applicable Master Lease and the Vendor shall execute such documents as are reasonable necessary to assign such proceeds or awards over to the Purchaser as and to the extent provided in the applicable Master Lease.

If the damage, or destruction or expropriation occurs at such time that there is insufficient time for the Vendor or Purchaser to make its election to terminate hereunder, the Closing Date shall be postponed to a date which is five (5) Business Days after the earlier of the date such election is made or the period for making such election has expired. This Section 7.2 shall survive the Closing.

7.3 Leasing and Contracts

From and after the Execution Date, the Vendor shall not enter into any Lease unless such lease has the landlord protections included in the Sublease Acknowledgment. From and after the Purchaser’s Condition Date, the Vendor shall not enter into any Lease or

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Contract or any amendment of any Lease or Contract that would bind the Purchaser after Closing or bind the Purchaser or the Subject Assets following a termination of the applicable Master Lease. The Vendor shall provide the Purchaser with copies of all Leases promptly following the execution thereof. This Section 7.3 shall survive the Closing.

ARTICLE 8

GENERAL

8.1 Interpretation

Unless the context otherwise requires (i) “or” is not exclusive; (ii) “this Agreement”, “hereof”, “herein”, “hereto” and similar expressions mean this Agreement together with all schedules to this Agreement and all amendments and supplements that may be made to this Agreement from time to time in writing; (iii) references to Articles, sections, subsections and schedules are references to Articles, sections, subsections and schedules of this Agreement; and (iv) wherever any provision of any schedule to this Agreement conflicts with the body of this Agreement, the body of this Agreement shall prevail.

Whenever a statement or provision in this Agreement is followed by words denoting inclusion or example (such as “including”) and then a list of, or reference to, specific matters or items, such list or reference shall not be read so as to limit or restrict the generality of such statement or provision, even though words such as “without limitation” or “without limiting the generality of the foregoing” or “but not limited to” do not precede such list or reference. If any provision of this Agreement is illegal or unenforceable, such provision shall be considered severable (and automatically severed) from the remaining provisions of this Agreement, which shall remain in force. There shall be no inference, presumption or conclusion drawn whatsoever by virtue of: (a) any one or more of the Vendor, the Vendor’s Solicitors, the Vendor’s Real Estate Broker, the Purchaser or the Purchaser’s Solicitors having drafted this Agreement or any portion thereof; or, (b) this Agreement being drawn using the standard or preferred form of the Vendor, the Vendor’s Solicitors or the Vendor’s Real Estate Broker; or, (c) the deletion of language or wording from this Agreement prior to execution by the Vendor or the Purchaser; or, (d) the selection or use of the words “not applicable” or “intentionally left blank” in any provision of this Agreement and, in this regard, the use of such words is for the convenience of the parties hereto only to preserve the numbering system of this Agreement; or (e) the particular words chosen and used to label or identify the defined terms of this Agreement; or (f) the selection or use of any bold, italicized, underlined or coloured print in this Agreement.

8.2 Schedules

The following schedules attached to and incorporated into this Agreement by reference shall form part of this Agreement:

Schedule “A”	Legal Descriptions
Schedule “B”	GST Declaration and Indemnity

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Schedule “C”	Waiver Notice
Schedule “D”	Permitted Encumbrances
Schedule “E”	Specific Excluded Property
Schedule “F”	Purchase Price Allocation and Initial Master Lease Rent Allocation
Schedule “G”	Data Room Index
Schedule “H”	Off Title Search Results
Schedule “I”	Master Lease Form
Schedule “J”	Existing Leases
Schedule “K”	Master Lease Beneficial Covenant Form
Schedule “L”	Form of Landlord BCLC Agreement

8.3 Gender and Number

Words importing the singular include the plural and vice versa. Words importing gender include all genders.

8.4 Captions

The caption, headings and table of contents contained herein are for reference only and in no way affect this Agreement or its interpretation.

8.5 Obligations as Covenants

Each agreement and obligation of any of the parties hereto in this Agreement, even though not expressed as a covenant, is considered for all purposes to be a covenant.

8.6 Applicable Law

This Agreement shall be construed and enforced in accordance with the laws of the Province of British Columbia and the laws of Canada applicable thereto therein, without giving effect to choice of law principles established or enacted in accordance with such laws, and shall be treated in all respects as a British Columbia contract for all purposes. The parties hereto hereby irrevocably attorn to the courts of the Province of British Columbia and irrevocably select the appropriate courthouse in Vancouver, British Columbia (given the nature of the legal proceeding and the jurisdiction of the particular court) to be the venue for all legal proceedings in respect of this Agreement, the Closing and any matter related thereto.

8.7 Currency

All references to currency in this Agreement shall be deemed to be references to Canadian dollars. Unless otherwise expressed, any amount set out in or contemplated by this Agreement excludes any GST or retail sales taxes which are required to be remitted or paid with respect to such amount.

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8.8 Invalidity

If any immaterial covenant, obligation, agreement or part thereof or the application thereof to any Person or circumstance, to any extent, shall be invalid or unenforceable, the remainder of this Agreement or the application of such covenant, obligation or agreement or part thereof to any Person, party or circumstance other than those to which it is held invalid or unenforceable shall not be affected thereby. Each covenant, obligation and agreement in this Agreement shall be separately valid and enforceable to the fullest extent permitted by law.

8.9 Amendment of Agreement

No supplement, modification, waiver or termination (other than an automatic termination pursuant to the terms of this Agreement) of this Agreement shall be binding unless executed in writing by the parties hereto in the same manner as the execution of this Agreement.

8.10 Time

Time shall be of the essence of this Agreement. If anything herein is to be done on a day which is not a Business Day, the same shall be done on the next succeeding Business Day. Unless otherwise provided hereto, all references to time herein shall mean local time in Vancouver, British Columbia.

8.11 Further Assurances

Each of the parties hereto shall from time to time hereafter and upon any reasonable request of the other, execute and deliver, make or cause to be made all such further acts, deeds, assurances and things as may be required or necessary to more effectually implement and carry out the true intent and meaning of this Agreement, without receiving additional consideration therefor, and without imposing any additional liabilities or obligations on such party.

8.12 Entire Agreement

This Agreement and any agreements, instruments and other documents herein contemplated to be entered into between, by or including the parties hereto constitute the entire agreement between the parties hereto pertaining to the Transaction provided for herein and supersede the Letter of Intent and all prior agreements, understandings, negotiations and discussions, whether oral or written, with respect thereto, excluding the Confidentiality Agreement which shall continue in full force and effect, and there are no other warranties or representations and no other agreements between the parties hereto in connection with the Transaction provided for herein except as specifically set forth in this Agreement or the Schedules hereto.

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8.13 Waiver

No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision (whether or not similar) nor shall any waiver constitute a continuing waiver unless otherwise expressed or provided.

8.14 Solicitors as Agents and Tender

Any notice, Notice, approval, waiver, agreement, instrument, document or communication permitted, required or contemplated in this Agreement may be given or delivered and accepted or received by the Purchaser’s Solicitors on behalf of the Purchaser and by the Vendor’s Solicitors on behalf of the Vendor and any tender of Closing Documents and the Balance may be made upon the Vendor’s Solicitors and the Purchaser’s Solicitors, as the case may be.

8.15 Survival

Except as otherwise expressly provided in this Agreement, no representations, warranties, covenants or agreements of the Vendor and Purchaser in this Agreement shall survive the Closing.

8.16 Successors and Assigns

All of the covenants and agreements in this Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall enure to the benefit of and be enforceable by the parties hereto and their respective successors and their permitted assigns pursuant to the terms and conditions of this Agreement.

8.17 Assignment

The Purchaser shall not assign its rights and/or obligations hereunder without the prior written consent of the Vendor, which consent may be withheld by the Vendor in its sole and absolute discretion. Notwithstanding the foregoing, the Purchaser shall be entitled, without the prior written consent of the Vendor but by prior Notice given to the Vendor on or before the day which is five (5) Business Days after the Execution Date, to assign this Agreement to a Person that is an affiliate of the Purchaser (within the meaning of the Business Corporations Act (British Columbia)) (a “Designee”) and/or direct a nominee or nominees to take legal title to the Subject Assets as bare trustee for and on behalf of the Purchaser or Designee, provided that: (a) such assignment is to a Person in respect of which Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d) have been satisfied, and such assignment shall not release the original Purchaser from its obligations and liabilities under this Agreement, and (b) prior to such assignment taking effect, the Purchaser and the Designee shall enter into an agreement with the Vendor which is satisfactory to the Vendor, acting reasonably, pursuant to which the Purchaser and the Designee agree to be jointly and severally liable for the obligations and liabilities of the Purchaser under this Agreement. The Vendor shall not assign its rights and/or obligations under this Agreement without the prior written consent of the Purchaser.

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8.18 Real Estate Commissions

The Vendor shall pay the commission or fee payable to the Vendor’s Real Estate Broker, which the Vendor represents and warrants are the only real estate agents, brokers or sales people that the Vendor have used in connection with the Transaction. The Purchaser represents and warrants to the Vendor that the Purchaser has not used the services of any real estate agent or broker in connection with the purchase and sale of the Subject Assets contemplated hereby. Each of the Purchaser and the Vendor indemnifies the other party from any Claims by any real estate agent or broker claiming otherwise. This Section 8.18 shall survive the Closing or termination of this Agreement.

8.19 Notice

Any notice, demand, approval, consent, information, agreement, offer, payment, request or other communication (hereinafter referred to as a “Notice”) to be given under or in connection with this Agreement shall be in writing and shall be given by personal delivery, reputable overnight courier or e-mail addressed or sent as set out below or to such other address as may from time to time be the subject of a Notice:

(a)   Vendor
Attention:	Tolek M. Strukoff, Chief Legal Officer & Corporate Secretary and Brad Bardua, Chief Financial Officer
E-mail:	tstrukoff@gatewaycasinos.com bbardua@gatewaycasinos.com
with a copy to the Vendor’s Solicitors:
Bennett Jones LLP Suite 3400 One First Canadian Place Toronto, ON M5X 1A4
Attention:	S. Paul Mantini and Simon P. Crawford
Email:	mantinisp@bennettjones.com crawfords@bennettjones.com
(b)   Purchaser:
Mesirow Realty Sale-Leaseback, Inc. 353 North Clark Street Chicago, Illinois 60654
Attention:	Garry W. Cohen Douglas Barker

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E-mail:	gcohen@mesirowfinancial.com
	dbarker@mesirowfinancial.com
with a copy to the Purchaser’s Solicitors:
Goldberg Kohn Ltd. 55 East Monroe Street, Suite 3300 Chicago, Illinois 60603
Attention:	Jami L. Brodey
	Gary N. Ruben
E-mail:	jami.brodey@goldbergkohn.com
	gary.ruben@goldbergkohn.com
and to:
Boughton Law Corporation
Suite 700 – 595 Burrard Street
Vancouver, British Columbia V7X 1S8
Attention:	George Cadman
	Hugh Claxton
E-mail:	gcadman@boughtonlaw.com
	hclaxton@boughtonlaw.com

Any Notice, personally delivered, shall be deemed to have been validly and effectively given and received on the date of such delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered.

Any notice delivered by overnight courier shall be deemed to have been validly and effectively given and received on the date of such delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered.

Notices shall be permitted to be given by email and shall be deemed to have been validly and effectively given and received on the date of delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered, so long as a duplicate notice is delivered by personal delivery or overnight courier.

It is agreed that any Property Information may be delivered to the Purchaser by (i) adding it to the Data Room so long as notice is given by email to the Purchaser or the Purchaser’s Solicitors at each time additional information is posted to the Data Room or (ii) by transmitting it to the Purchaser or the Purchaser’s Solicitors by e-mail transmission at the e-mail addresses set out above.

-49-

8.20 Effect of Termination of Agreement

Notwithstanding the termination of this Agreement for any reason, the following provisions shall survive and shall remain in full force and effect: (a) the confidentiality provisions contained in the Confidentiality Agreement and Section 2.6 including, without limitation, the Purchaser’s obligations to return documents to the Vendor; (b) Subsection 2.4(b); (c) this Section 8.20 and (d) such other provisions (such as those in Section 3.1 relating to the forfeiture or return of the Deposit following termination) the survival of which following termination are necessary to give practical effect thereto and such other provisions as stated to survive herein. For greater certainty, it is confirmed that termination of this Agreement does not, for the purposes of this Section 8.20, include the Closing of this Agreement and that Section 8.15 governs the survival of provisions of this Agreement after the Closing.

8.21 No Registration of Agreement

The Purchaser shall not register this Agreement or any notice of this Agreement on title to the Lands.

8.22 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and which, taken together, shall constitute one and the same instrument. This Agreement may be delivered by emailed pdf and the parties adopt any signature received by emailed pdf as original signatures of the parties. In the case of email pdf transmission, the transmitting party shall forthwith deliver an originally executed copy of this Agreement to the other parties.

8.23 Site Profile Waiver

The Purchaser hereby waives any right it has to be provided with a site profile relating to the Subject Assets pursuant to the provisions of the Environmental Management Act (British Columbia) and the regulations promulgated thereunder.

8.24 Fees, Costs and Expenses

Notwithstanding any other provision in this Agreement, unless otherwise expressly provided herein, each of the Vendor and the Purchaser shall be solely responsible for its own accounting and other professional advisory fees, costs and expenses incurred in connection with this Agreement and the Transaction.

8.25 Vendor’s Obligations Limited

Prior to Closing, the liabilities, obligations and covenants of the Vendor under this Agreement shall be limited in aggregate to the amount equal to the actual amount of the Deposit.

(Signature Page Follows)

-50-

IN WITNESS WHEREOF the parties hereto have executed this Agreement by their properly authorized officers in that behalf as of the day and year first above written.

GATEWAY CASINOS & ENTERTAINMENT LIMITED

Per:
	Name: Anthony Santo
	Title: Chief Executive Officer

I have authority to bind the Corporation.

Per:
	Name: Brad Bardua
	Title: Chief Financial Officer

I have authority to bind the Corporation.

7588674 CANADA INC.

Per:
	Name: Anthony Santo
	Title: Director

I have authority to bind the Corporation.

Per:
	Name:
	Title:

I have authority to bind the Corporation.

MESIROW REALTY SALE-LEASEBACK, INC.

Per:
	Name: M. Douglas Barker
	Senior Managing Director

I/We have authority to bind the Corporation.

-51-

SCHEDULE “A”

LEGAL DESCRIPTIONS

Part A

A-1 Grand Villa Casino / Hotel - 4331 Dominion Street, Burnaby, BC

Parcel Identifier: 026-658-038

Lot 1 District Lot 70 Group 1 NWD Plan BCP21069

A-2 Grand Villa Casino Parking Structure – 4320/4350 Dominion Street, Burnaby, BC

Parcel Identifier: 003-517-918

Lot A, Except: Firstly; The East 569.25 feet, Secondly; Portions in Plan LMP32853, Thirdly; Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 9892

Part B

B-1 Star Light Casino - 350 Gifford Street, New Westminster, BC

Parcel Identifier: 026-069-903

Lot 1 District Lot 758 Group 1 NWD Plan BCP13760 Except Part Subdivided by Plan BCP35830

B-2 Vacant Lot Next To Starlight Casino – 3811 Boundary Road, Richmond, BC

Parcel Identifier: 001-109-022

Parcel 61 District Lot 757, 758 and 6883 Group 1 NWD Plan 64783, Except: Firstly; Part Highway on Plan 74380, Secondly; Part shown as 0.0802 hectares on Plan 74467, Thirdly; Part Highway on Plan LMP23314, Fourthly: Part shown as 0.4163 hectares on Plan 74467, Fifthly; Part in Plan BCP13760; Sixthly; Part Subdivided by Plan BCP43137

Part C

C-1 Cascades Casino - #1 – 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-552

Strata Lot 1 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-2 Cascades Casino Hotel #2 – 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-561

Strata Lot 2 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-3 Office Building next to Cascade Casino/Hotel – 20389 Fraser Highway, Langley, BC

Parcel Identifier: 024-760-579

Parcel A District Lot 309 Group 2 NWD Plan LMP45619

A - 2

SCHEDULE “B”

GST DECLARATION AND INDEMNITY

TO: Gateway Casinos & Entertainment Limited (the “Vendor”)

RE: Sale by the Vendor to the undersigned of the Vendor’s interest in the property known as 4331 Dominion Street and 4320/4350 Dominion Street and Burnaby BC, 350 Gifford Street, New Westminster, BC and 3811 Boundary Road, Richmond, BC and as 20393 and 20389 Fraser Highway, Langley, BC, British Columbia (the “Property”)

The undersigned (the “Purchaser”) hereby declares, certifies and agrees as follows:

(a) it is purchasing the Property as principal for its own account and same is not being purchased by the Purchaser as an agent, trustee or otherwise on behalf of or for another person;

(b) it is registered under Subdivision d of Division V of Part IX of the Excise Tax Act (Canada) (the “Act”) for the collection and remittance of goods and services tax (“GST”); its registration number is R●; and such registration is in good standing and has not been revoked;

(c) it shall be liable, shall self-assess and remit to the appropriate governmental authority all GST which is payable under the Act in connection with the transfer of the Property, all in accordance with the Act; and

(d) it shall indemnify and save harmless the Vendor from and against GST, penalties, costs and/or interest which may become payable by or assessed against the Vendor as a result of any failure by the Purchaser to comply with the provisions of this GST Declaration and Indemnity.

The undersigned acknowledges and agrees that the foregoing GST Declaration and Indemnity shall survive and not merge upon closing of the above-noted transaction. Capitalized terms unless otherwise defined herein have the same meanings as in the purchase agreement between the Vendor and the Purchaser with respect to the Property.

Dated as of ● day of ●, 2017.

[PURCHASER]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
I/We have authority to bind the Corporation.

SCHEDULE “C”

WAIVER NOTICE

TO: Gateway Casinos & Entertainment Limited

RE: 4331 Dominion Street and 4320/4350 Dominion Street, Burnaby BC, 350 Gifford Street, New Westminster, BC and 3811 Boundary Road, Richmond, BC and as 20393 and 20389 Fraser Highway, Langley, BC

We refer to the Agreement of Purchase and Sale made between Gateway Casinos & Entertainment Limited. and ● dated as of ●, 2017 (the “Purchase Agreement”). Pursuant to Section ● of the Purchase Agreement, we hereby irrevocably waive the condition in Subsection ● of the Purchase Agreement.

DATED as of the ● day of ●, 2017.

● [PURCHASER]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
I/We have authority to bind the Corporation.

SCHEDULE “D”

PERMITTED ENCUMBRANCES

A. GENERAL

1. Any subsisting reservations, limitations, provisos, conditions or exceptions, including royalties, contained in the original grant from the Crown of any land or interests therein, reservations of under surface rights to mines and minerals of any kind such as, rights to coal, petroleum and minerals of any kind and rights to enter, prospect and remove the same whether or not such subsisting reservations, limitations, provisos, conditions or exceptions are reserved to or vested in any Governmental Authority by any Applicable Laws.

2. The Nominee Ground Leases and registered notices thereof.

B. SPECIFIC ENCUMBRANCES

1. As to PID 026-658-038 (Grand Villa Casino / Hotel – 4331 Dominion Street, Burnaby)

Legal Notations

1. Hereto is annexed Easement BA68143 over part of Parcel B (Bylaw Plan BCP21071) shown on Plan BCP21072

2. Hereto is annexed Easement BA68144 over part of Parcel C (Bylaw Plan BCP21071) shown on Plan BCP21072

3. Hereto is annexed Easement BX395145 over part of Parcel A (Bylaw Plan BCP21071) shown on Plan BCP21072

Charges, Liens and Interests

1. Statutory Right of Way C46474 in favour of District of Burnaby, Plan 31634, Ancillary Rights over Part Formerly West ¹⁄₂ of Lot 10

2. Lease BN251714 in favour of Clearnet PCS Inc., Part on Plan LMP43340

3. Restrictive Covenant BN251715, as to part formerly West ¹⁄₂ of Lot 10, appurtenant to Lease BN251714

4. Statutory Right of Way BX395147 in favour of City of Burnaby, Part on Plan BCP21073

5. Statutory Right of Way BX395150 in favour of City of Burnaby, Part on Plan BCP21074

6. Covenant BX395153 in favour of City of Burnaby

7. Covenant BX395156 in favour of City of Burnaby

8. Covenant BX395158 in favour of City of Burnaby

9. Covenant BX395160 in favour of City of Burnaby

10. Covenant BX395162 in favour of City of Burnaby

11. Covenant BX395164 in favour of City of Burnaby

12. Covenant BB512427 in favour of City of Burnaby

13. Statutory Right of Way BB1067466 in favour of British Columbia Hydro and Power Authority

14. Covenant CA4986787 in favour of City of Burnaby

2. As to PID 003-517-918 (Grand Villa Casino / Parking Structure – 4320/4350 Dominion Street, Burnaby)

Legal Notations

1. Hereto is annexed Easement BA68143 over part of Parcel B (Bylaw Plan BCP21071) shown on Plan BCP21072

2. Hereto is annexed Easement BA68144 over part of Parcel C (Bylaw Plan BCP21071) shown on Plan BCP21072

3. Hereto is annexed Easement BX395145 over part of Parcel A (Bylaw Plan BCP21071) shown on Plan BCP21072

Charges, Liens and Interests

1. Covenant BN28240 in favour of City of Burnaby

2. Covenant BW507131in favour of City of Burnaby

3. Covenant BX395170 in favour of City of Burnaby

4. Covenant BB512427 in favour of City of Burnaby

3. As to PID 026-069-903 (Star Light Casino – 350 Gifford Street, New Westminster)

Legal Notations

1. Hereto is annexed Easement K35635 over Plan 45762 of Parcel “B” (25-207- 16362F) and Parcel “A” (25-207-16363F) of Block 34 and Parcel “B” (Reference

D - 2

Plan 1109) of Lot 35 All of District Lots 757 and 758 Group 1 Plan 2620. Partial Release BT432443 as to all except portions in Plan BCP1713. Partial Release BA115633 as to all that portion dedicated road on Plan BCP21095. Part derived from Lot 2 Plan 83367

2. Hereto is annexed Easement P7339 over Plan 45162 of Parcel “A” (Reference Plan 1454) of Block 35 District Lot 757 Group 1 Plan 2620. Partial Release BT432444 as to all except portions in Plan BCP1713. Part derived from Lot 2 Plan 83367

3. Hereto is annexed Restrictive Covenant K35637 over Parcel “B” (25-207-16362F) and Parcel “A” (25-207-16363F) of Block 34 and Parcel “B” (Reference Plan 1109) of Lot 35 all of District Lost 757 and 758 Group 1 Plan 2620. Part derived from Lot 2 Plan 83367

4. Hereto is annexed Restrictive Covenant P7341 over Parcel “A” (Reference Plan 1454) of District Lot 757 Group 1 Plan 2620. Part derived from Lot 2 Plan 83367

5. This title may be affected by a permit under Part 26 of the Local Government Act, See BX415334

6. This title may be affected by a permit under Part 26 of the Local Government Act, See CA3943189

7. This title may be affected by a permit under Part 26 of the Local Government Act, See CA4985149

8. Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

9. Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

10. Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 10.2.1981 under No. T17084 Plan No. 61216

Charges, Liens and Interests

1. Undersurface Rights 91801C, Part Formerly Parcel “K” (Explanatory Plan 22476) See 171517E

2. Statutory Right of Way 212086C in favour of City of New Westminster, Explanatory Plan 15264

3. Statutory Right of Way W8849 in favour of City of New Westminster, Plan 55922

D - 3

4. Statutory Right of Way AC272535 in favour of City of New Westminster , ancillary rights, Part derived from Lot 2 Plan 83367

5. Covenant AC272536 in favour of Her Majesty the Queen in Right of the Province of British Columbia and the City of New Westminster, Part derived from Lot 2 Plan 83367

6. Covenant BW314959 in favour of the Corporation of the City of New Westminster, Part derived from Parcel 61 Plan 64783

4. As to PID 001-109-022 (Star Light Casino / Vacant Lot 3811 Boundary Road, Richmond and Boundary Road, Westminster)

Legal Notations

1. This title may be affected by a Permit under Part 26 of the Local Government Act, See BB567783

2. Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

3. Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

4. Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 10.2.1981 under No. T17084 Plan No. 61216

Charges, Liens and Interests

1. Statutory Right of Way W8849 in favour of City of New Westminster, Plan 55922

2. Covenant BW314959 in favour of the Corporation of the City of New Westminster

3. Covenant BB121236 in favour of the Corporation of the City of New Westminster

4. Covenant BB121237 in favour of the Corporation of the City of New Westminster

5. As to PID 026-507-552 (Cascades Casino, #1-20393 Fraser Highway, Langley)

Legal Notations

1. This title may be affected by a Permit under Part 26 of the Local Government Act, See BB832468

2. Subject to Provisos, See BP83218, Land Act, Section 50, As to part formerly Parcel 1 (Bylaw Plan LMP24694)

D - 4

3. Subject to Provisos, See BP83219, Land Act, Section 50, As to part formerly Parcel 2 (Bylaw Plan LMP24694)

4. Subject to Provisos, See BP83220, Land Act, Section 50, As to part formerly Parcel 3 (Bylaw Plan LMP24694)

5. Subject to Provisos, See BP83221, Land Act, Section 50, As to part formerly Parcel 4 (Bylaw Plan LMP24694)

6. This title may be affected by a Permit under Part 26 of the Local Government Act, See BW181711

7. This title may be affected by a Permit under Part 26 of the Local Government Act, See BX191962

8. Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

9. Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

10. Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 31 03 1976 under No. M26464 Plan No. 49871

11. This title may be affected by a Permit under Part 29 of the Municipal Act, See DF BF21601

Charges, Liens and Interests

1. Statutory Right of Way BP83245 in favour of British Columbia Hydro and Power Authority, as to parts formerly

2. Covenant BW106580 in favour of the City of Langley

3. Statutory Right of Way BW363637 in favour of Terasen Gas Inc.

4. Statutory Right of Way BX381008 in favour of British Columbia Hydro and Power Authority

5. Statutory Right of Way BX381009 in favour of Telus Communications Inc.

6. Modification BA579621A, being a Modification of Covenant BW106580

6. As to PID 026-507-561 (Cascades Hotel, #2-20393 Fraser Highway, Langley)

Legal Notations

1. Subject to Provisos, See BP83218, Land Act, Section 50, As to part formerly Parcel 1 (Bylaw Plan LMP24694)

D - 5

2. Subject to Provisos, See BP83219, Land Act, Section 50, As to part formerly Parcel 2 (Bylaw Plan LMP24694)

3. Subject to Provisos, See BP83220, Land Act, Section 50, As to part formerly Parcel 3 (Bylaw Plan LMP24694)

4. Subject to Provisos, See BP83221, Land Act, Section 50, As to part formerly Parcel 4 (Bylaw Plan LMP24694)

5. This title may be affected by a Permit under Part 26 of the Local Government Act, See BW181711

6. This title may be affected by a Permit under Part 26 of the Local Government Act, See BX191962

7. Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

8. Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

9. Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 31 03 1976 under No. M26464 Plan No. 49871

10. This title may be affected by a Permit under Part 29 of the Municipal Act, See DF BF21601

Charges, Liens and Interests

1. Statutory Right of Way BP83245 in favour of British Columbia Hydro and Power Authority, as to parts formerly

2. Covenant BW106580 in favour of the City of Langley

3. Statutory Right of Way BW363637 in favour of Terasen Gas Inc.

4. Statutory Right of Way BX381008 in favour of British Columbia Hydro and Power Authority

5. Statutory Right of Way BX381009 in favour of Telus Communications Inc.

6. Modification BA579623A, being a Modification of Covenant BW106580

D - 6

7. As to PID 024-760-579 (Office Building next to Cascades Casino/Hotel 20389 Fraser Highway, Langley)

Legal Notations

1. Hereto is annexed Easement BP83217 over Part (Plan LMP45619) Lot 1 Plan LMP24094

2. Hereto is annexed Easement BP83243 over Part (Plan LMP45622) Lot 9 Plan LMP45621

3. Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 31.03.1976 under No. M26464 Plan No. 49871

Charges, Liens and Interests

1. None

D - 7

SCHEDULE “E”

SPECIFIC EXCLUDED PROPERTY

The following items located at the Property:

1. Specialty light fixtures

2. Office cubicles and fixtures

3. Telecommunications antennas, servers and related equipment owned by a third party including such items owned by Telus, Rogers, Wind Mobile, Shaw Cablesystems and Netcetera.

4. Garbage compactors leased from third parties (including Envirowaste Solutions)

5. Table games and systems, slot machines, servers and systems, signage and all other property owned by BCLC as set out in the relevant casino operating agreement from time to time

6. ATMs and similar cash dispensing machines, including, without limitation, ticket redemption machines, change machines and similar

7. Leased food services equipment, quick service food equipment, dishwashers, ice machines, glass washers, vending machines, beverage dispensing or other equipment that are owned by third parties or is subject to proprietary rights (including license or franchise rights) of third parties (such as Starbucks)

8. Computers, key cabinets, data and server racks and cabling infrastructure, data switching equipment, AV Equipment, AV production equipment, and servers, including without limitation, those that constitute a part of the security/surveillance systems

9. Exterior signage

SCHEDULE “F”

PURCHASE PRICE ALLOCATION AND

INITIAL MASTER LEASE RENT ALLOCATION

Allocation	Grand Villa Property		Starlight Property		Cascades Strata Property		Cascades Freehold Property (beneficial interest)
Initial Master Lease Rent	$	17,452,475	$	7,114,851	$	10,086,139		Included in rent for Cascades Property
Purchase Price	$	253,624,830	$	103,395,248	$	143,860,922	$	2,714,000

SCHEDULE “G”

DATA ROOM INDEX

See attached.

Printable Index Page 1 of 46

Index for Data Room as of 12/14/2017 10:02:07 AM

    Data Room

    19 - Sale leaseback - Mesirow

    19.1 - Marketing Materials

    19.1.1 - Gateway CIM- August 2017(med res).pdf

    19.1.2 - Gateway Portfolio_Investment Summary.pdf

    19.2 - Form of Lease

    19.2.1 - Form of Lease - Dataroom V1.docx

    19.3 - LOI

    19.3.1 - Executed LOI (Mesirow _And_ Gateway) 09.26.2017.pdf

    19.4 - APS

    19.4.1 - Data Room APS-April 24th Version.docx

    19.5 - Tripartite Agreement

    19.5.1 - Draft Landlord BCLC Agreement (Tripartite Agreement).docx

    19.6 - MCOSA

    19.6.1 - CAL - MCOSA Extension Term BCLC May 4, 2015.pdf

    19.6.2 - GHO-MCOSA-Assignment dated 14 Sep 10.pdf

    19.6.3 - GHO-BCLC-MCOSA Agr(U)-10 Jun 09_Redacted.pdf

    19.7 - OSA

    19.7.1 - 2017 11 21 OSA draft for final approval.docx

    19.8 - Gaming Industry Context

    19.8.1 - BC GPEB landlord-disclosure form.pdf

    19.9 - Gateway Corporate Information

    19.9.1 - Economic and Community Contribution Report_Mar2017FINALv1.pdf

    19.9.2 - Gateway Casinos and Entertainment Limited YE 2016 -Financial Statements.pdf

    19.9.3 - Gateway Casinos and Entertainment Ltd YE 2016-MDA.PDF

    19.10 - Property _And_ Financial Information

    19.10.1 - a) Surveys

    19.10.1.1 - Burnaby

    19.10.1.1.1 - Grand Villa Survey completed Jan 11 2011.pdf

    19.10.1.1.2 - Plan BCP21069 - Subdivision Plan creating Lot 1 (Grand Villa Casino site).PDF

    19.10.1.1.3 - Plan BCP21070 shows Remainder of Grand Villa Parking Structure Lands.PDF

    19.10.1.1.4 - Plan BCP21070 shows Remainder of Paved Parking Lands.PDF

Printable Index Page 2 of 46

    19.10.1.1.5 - Plan BCP21072 - Pedestrian Overpass Volumetric Easement Plan over Dominion Street.pdf

    19.10.1.1.6 - Plan LMP32853 - Road Dedication Plan out of Grand Villa Parking Structure lands.pdf

    19.10.1.1.7 - Plan NWP9892 - Creating Lot A (Grand Villa Parking Structure before further subdivisions).pdf

    19.10.1.2 - Langley

    19.10.1.2.1 - Cascades Langely Survey completed Jan 11 2011.pdf

    19.10.1.2.2 - LMP45619 - Subdivision Plan showing Lot A (office bldg).PDF

    19.10.1.2.3 - Strata Plan BCS1615 (Cascades Casino, Hotel).PDF

    19.10.1.3 - New Westminster

    19.10.1.3.1 - Bcp13760.pdf Registered Survey Plan.pdf

    19.10.1.3.2 - Bennett survey Lot _Hash_3.pdf

    19.10.1.3.3 - Plan BCP13760 - Scenery in this plan shows the location of 3811 Boundary Road (adjacent to Star Light lands) .PDF

    19.10.1.3.4 - Plan BCP13760 - Subdivision Plan creating Lot 1 (Star Light Casino lands).PDF

    19.10.1.3.5 - Plan BCP1713 - Easement Plan for K35635 to K35640 and P7339 to P7344.PDF

    19.10.1.3.6 - Plan BCP35830 - Exception Plan subdividing portion and showing remainder of Star Light Casino lands.PDF

    19.10.1.3.7 - Plan BCP43137 (showing Rem Lot 61 Plan 64783 3811 Boundary Rd).PDF

    19.10.1.3.8 - Plan NWP64783 showing original boundary of Lot 61 which created Lot 1 and Rem Lot 61.pdf

    19.10.1.3.9 - Site Survey.pdf

    19.10.1.3.10 - SurveyStarlight completed Jan 11 2011 (1).pdf

    19.10.2 - b) Floor Plans

    19.10.2.1 - Burnaby

    19.10.2.1.1 - 0406 A-3.1.4.pdf

    19.10.2.1.2 - 0406 A-3.1.5.pdf

    19.10.2.1.3 - 0406 A-3.1.6.pdf

    19.10.2.1.4 - 0406 A-3.1.7.pdf

    19.10.2.1.5 - 0406 A-3.1.8.pdf

    19.10.2.1.6 - 0406 A-3.1.9.pdf

    19.10.2.1.7 - 0406 A-3.2.2.pdf

    19.10.2.1.8 - 0406 A-3.2.3.pdf

    19.10.2.1.9 - 0406 A-3.2.4.pdf

    19.10.2.1.10 - 30571-44_Signed CE.PDF

    19.10.2.1.11 - A-3.1.1 N-S Elevations.pdf

    19.10.2.1.12 - A-3.1.2 E-W Elevations.pdf

Printable Index Page 3 of 46

    19.10.2.1.13 - Burnaby, Grand Villa - Floor Plans and Area Calculations.pdf

    19.10.2.2 - Langley

    19.10.2.2.1 - 0511_A0.1 SITE.pdf

    19.10.2.2.2 - 0511_A0.2 SITE.pdf

    19.10.2.2.3 - 0511_A0.3 SITE.pdf

    19.10.2.2.4 - 0511_A1.1 LEVEL 1.pdf

    19.10.2.2.5 - 0511_A1.2 LEVEL 2.pdf

    19.10.2.2.6 - 0511_A1.3 LEVEL 3.pdf

    19.10.2.2.7 - 0511_A1.4 LEVEL 4.pdf

    19.10.2.2.8 - 0511_A2.1 ELEVATION.pdf

    19.10.2.2.9 - 0511_A2.2 ELEVATION.pdf

    19.10.2.2.10 - 0511_A3.1 SECTIONS.pdf

    19.10.2.2.11 - 0511_A3.2 SECTIONS.pdf

    19.10.2.2.12 - 0511_A4.1 STAIR DETAIL.pdf

    19.10.2.2.13 - 0511_A4.2 CANOPY DETAIL.pdf

    19.10.2.2.14 - 0511_A4.3 CANOPY DETAIL.pdf

    19.10.2.2.15 - 0511_A4.4 CANOPY DETAIL.pdf

    19.10.2.2.16 - 0511_A5.1 Win WALL SCHL.pdf

    19.10.2.2.17 - Langley, Cascades - Area Calculations.pdf

    19.10.2.3 - New Westminster

    19.10.2.3.1 - 0511_A0.1 SITE.pdf

    19.10.2.3.2 - New West, Starlight - Floor Plans and Area Calculations.pdf

    19.10.3 - c) Architectural Plans

    19.10.3.1 - i. Burnaby Architectural

    19.10.3.1.1 - SK_00.pdf

    19.10.3.1.2 - SK_01.pdf

    19.10.3.1.3 - SK_02.pdf

    19.10.3.1.4 - sk_03.pdf

    19.10.3.1.5 - SK_04.pdf

    19.10.3.1.6 - SK_05.pdf

    19.10.3.1.7 - SK_06.pdf

    19.10.3.1.8 - SK_07.pdf

    19.10.3.1.9 - SK_08.pdf

    19.10.3.1.10 - SK_09.pdf

    19.10.3.1.11 - SK_10.pdf

Printable Index Page 4 of 46

    19.10.3.1.12 - SK_11.pdf

    19.10.3.1.13 - SK_12.pdf

    19.10.3.1.14 - SK_13.pdf

    19.10.3.1.15 - SK_14.pdf

    19.10.3.1.16 - SK_15.pdf

    19.10.3.1.17 - SK_16.pdf

    19.10.3.1.18 - SK_17.pdf

    19.10.3.1.19 - sk_18.pdf

    19.10.3.1.20 - SK_19.pdf

    19.10.3.1.21 - SK_20.pdf

    19.10.3.1.22 - SK_21.pdf

    19.10.3.1.23 - SK_22.pdf

    19.10.3.1.24 - SK_23.pdf

    19.10.3.1.25 - SK_24.pdf

    19.10.3.1.26 - SK_25.pdf

    19.10.3.1.27 - SK_26.pdf

    19.10.3.1.28 - SK_27.pdf

    19.10.3.1.29 - SK_28.pdf

    19.10.3.1.30 - SK_29.pdf

    19.10.4 - d) Parking Information

    19.10.4.1 - Parking Stalls Count - 3 Sites.xlsx

    19.10.5 - e) Offering Memorandum and Financial Statements

    19.10.5.1 - Gateway Casinos and Entertainment Ltd YE 2016-MDA.PDF

    19.10.5.2 - Gateway - Final Offering Memorandum.pdf

    19.10.5.3 - Gateway Casinos and Entertainment Limited Q3 2016 FINAL.pdf

    19.10.5.4 - Gateway Casinos and Entertainment Limited Q1 2016.pdf

    19.10.5.5 - Gateway Casinos and Entertainment Limited Q1 2017.pdf

    19.10.5.6 - Gateway Casinos and Entertainment Limited Q2 2016 FINAL.pdf

    19.10.5.7 - Gateway - Final Canadian Wrap.pdf

    19.10.5.8 - Gateway Casinos and Entertainment Limited Q2 2017_Final.pdf

    19.10.5.9 - Gateway Casinos and Entertainment Limited Q3 2017 Financial Statements_Final.pdf

    19.10.6 - f) Capital Expenditures

    19.10.6.1 - Langley Hotel-Convention Capex Plan.xlsx

    19.10.7 - g) Expenses and Operating Statements

    19.10.7.1 - 2017 04 28 Hotel stats table.pdf

Printable Index Page 5 of 46

    19.10.7.2 - Delta Burnaby Hotel Financials 2014-2016.pdf

    19.10.7.3 - Selected Financial Statements for Coast Hotel Cascades (2014-2016) - Revised.xlsx

    19.10.8 - h) Tax Bills

    19.10.8.1 - 2015 Property Tax Support.pdf

    19.10.8.2 - 2016 Property Tax Support.pdf

    19.10.8.3 - 2017 Property Tax Support.pdf

    19.11 - Title Documents

    19.11.1 - a) Burnaby

    19.11.1.1 - Encumbrances

    19.11.1.1.1 - BA68143, BA68144 and BX395145 (Pedestrian Overpass Easement between casino and parkade).PDF

    19.11.1.1.2 - BB512427 - City of Burnaby Covenant (expansion of casino on Lot A pending relocation to Lot 1) (2).PDF

    19.11.1.1.3 - BB1067466 - BC Hydro SRW.PDF

    19.11.1.1.4 - BC Hydro Standard Charge Terms ST20102 filed with BB1067466.PDF

    19.11.1.1.5 - BN28240 - City of Burnaby Covenant (off-site parking).PDF

    19.11.1.1.6 - BN251714 and BN251715 - Lease and RC in favour of Clearnet PCS Part on Plan LMP43340.PDF

    19.11.1.1.7 - BW507131 - City of Burnaby Covenant (expansion and liquor licence).PDF

    19.11.1.1.8 - BX395147 - City of Burnaby Covenant (storm sewers and drains).PDF

    19.11.1.1.9 - BX395150 - City of Burnaby Covenant (storm and sewer utilities).PDF

    19.11.1.1.10 - BX395153 - City of Burnaby Covenant (riparian area Sumner Creek).PDF

    19.11.1.1.11 - BX395156 - City of Burnaby Covenant (Sequoia Trees).PDF

    19.11.1.1.12 - BX395158 - City of Burnaby Covenant (storm water management system).PDF

    19.11.1.1.13 - BX395160 - City of Burnaby Covenant (Soil Settlement).PDF

    19.11.1.1.14 - BX395162 - City of Burnaby Covenant (Flooding).PDF

    19.11.1.1.15 - BX395164 - City of Burnaby Covenant (Prohibit Long Term Occupancy).PDF

    19.11.1.1.16 - BX395170 - City of Burnaby Covenant (Parking Lots).PDF

    19.11.1.1.17 - BY47112 - City of Burnaby SRW (storm sewer and drains).PDF

    19.11.1.1.18 - BY64794 - City of Burnaby Covenant (Single Single Covenant with adjacent Lot 50 not owned by Gateway).PDF

    19.11.1.1.19 - BY64796 - City of Burnaby SRW (public walkway).PDF

Printable Index Page 6 of 46

    19.11.1.1.20 - C46474 - City of Burnaby SRW (water mains and sewers).PDF

    19.11.1.1.21 - CA4986787 -City of Burnaby Covenant re Liquor Licence Amendment (2).PDF

    19.11.1.1.22 - Plan BCP21069 - Subdivision Plan creating Lot 1 (Grand Villa Casino site).PDF

    19.11.1.1.23 - Plan BCP21070 shows Remainder of Grand Villa Parking Structure Lands.PDF

    19.11.1.1.24 - Plan BCP21070 shows Remainder of Paved Parking Lands.PDF

    19.11.1.1.25 - Plan BCP21072 - Pedestrian Overpass Volumetric Easement Plan over Dominion Street.pdf

    19.11.1.1.26 - Plan LMP32853 - Road Dedication Plan out of Grand Villa Parking Structure lands.pdf

    19.11.1.1.27 - Plan NWP9892 - Creating Lot A (Grand Villa Parking Structure before further subdivisions).pdf

    19.11.1.2 - BC Assessment PID 000-847-054 (4405 Norfolk) (Dec 8-17).pdf

    19.11.1.3 - BC Assessment PID 003-517-918 (4320 Dominion) (Dec 8-17).pdf

    19.11.1.4 - BC Assessment PID 026-658-038 (4331 Dominion) (Dec 8-17).pdf

    19.11.1.5 - Site Registry PID 000-847-054 (4405 Norfolk) (Nov 26-17).PDF

    19.11.1.6 - Site Registry PID 003-517-918 (4320-4350 Dominion) (Nov 26-17).PDF

    19.11.1.7 - Site Registry PID 026-685-038 (4331 Dominion) (Nov 26-17).PDF

    19.11.1.8 - TaxCertificate PID 026-658-038 - 4331 Dominion (Dec 1-17).PDF

    19.11.1.9 - TaxCertificate PID 000-847-054 - 4405 Norfolk (Dec 1-17).PDF

    19.11.1.10 - TaxCertificate PID 003-517-918 - 4320 Dominion (Dec 1-17).PDF

    19.11.1.11 - TITLE-CA1734518-PID-003-517-918 (Grand Villa Parking Structure 4320 Dominion).PDF

    19.11.1.12 - TITLE-CA1734519-PID-000-847-054 (Grand Villa Parking Lot 4405 Norfolk).PDF

    19.11.1.13 - TITLE-CA4677698-PID-026-658-038 (Grand Villa Casino 4331 Dominion).PDF

    19.11.1.14 - Technical Safety BC Response - 4331 and 4320 Dominion (Grand Villa) .pdf

    19.11.2 - b) Langley

    19.11.2.1 - City of Langley Title

    19.11.2.1.1 - TITLE-BX78589-PID-026-507-579 (SL 3 owned by Langley).PDF

    19.11.2.2 - Encumbrances

    19.11.2.2.1 - BA579621A - City of Langley Modification of Dev Covenant.PDF

Printable Index Page 7 of 46

    19.11.2.2.2 - BA579623A - City of Langley Modification of Dev Covenant.pdf

    19.11.2.2.3 - BB832468 - Notice of DP 02-07 re Strata Lot 1 issued November 26, 2007.pdf

    19.11.2.2.4 - BP83217 - Annexed Access Easement over CP BCS1615 (as to area on Plan LMP45620).PDF

    19.11.2.2.5 - BP83218 to BP83222 - Legal Notation - S 50 Land Act Provisos Road Closure.PDF

    19.11.2.2.6 - BP83243 - Annexed Building Encroachment Easement over CP BCS1615 (as to area on Plan LMP45621).PDF

    19.11.2.2.7 - BP83245 - BC Hydro SRW - Part in Plan LMP45623.PDF

    19.11.2.2.8 - BW106580 - City of Langley Development Covenant.PDF

    19.11.2.2.9 - BW181711 - Notice of DP 07-03 issued April 23, 2004 .pdf

    19.11.2.2.10 - BW363637 - Terasen Gas (Fortis) SRW.PDF

    19.11.2.2.11 - BX191962 - Notice of DP 10-05 issued August 31, 2005 re Office Building Lands.pdf

    19.11.2.2.12 - BX381008 and BX381009 - BC Hydro and Telus SRWs.PDF

    19.11.2.2.13 - CA5077208 - Restrictive Covenant (gaming) over other lands for Gateway benefit (2).PDF

    19.11.2.2.14 - CA5469717 - Restrictive Covenant (Gaming Restrictions on other lands) (2).PDF

    19.11.2.2.15 - LMP45619 - Subdivision Plan showing Lot A (office bldg).PDF

    19.11.2.2.16 - ST020105 Charge Terms filed with Hydro SRW BX381008 and Telus SRW BX3810_Dot_._Dot_.pdf

    19.11.2.3 - BC Assessment PID 024-760-579 (20389 Fraser HWY) (Dec 8-17).pdf

    19.11.2.4 - BC Assessment PID 026-507-552 (1-20393 Fraser Hwy) (Dec 8-17).pdf

    19.11.2.5 - BC Assessment PID 026-507-561 (2-20393 Fraser Hwy) (Dec 8-17).pdf

    19.11.2.6 - Certificate of Strata Corporation.pdf

    19.11.2.7 - Common Property Search for Strata Plan BCS1615 (Nov 22 2017).PDF

    19.11.2.8 - Schedule of Standard Bylaws from SPA.pdf

    19.11.2.9 - Site Registry PID 024760579 (20389 Fraser Hwy) (Nov 26-17).PDF

    19.11.2.10 - Site Registry PID 026507552 (20391 Fraser Hwy) (Nov 26-17).PDF

    19.11.2.11 - Site Registry PID 026507561 (20391 Fraser Hwy) (Nov 26-17).PDF

    19.11.2.12 - Strata Filing BB596851 - Designation of LCP for SL 1 and 2.PDF

    19.11.2.13 - Strata Filing BB596852 - Change in Allocation of Costs pursuant to S 100(1) of SPA.PDF

Printable Index Page 8 of 46

    19.11.2.14 - Strata Filing BB596853 - Strata Bylaws amending and supplementing Standard Bylaws.PDF

    19.11.2.15 - Strata Filing BX589932 - Unit Entitlement.pdf

    19.11.2.16 - Strata Filing BX589933 - Voting Rights among 3 strata lots.PDF

    19.11.2.17 - Strata Plan BCS1615 (Cascades Casino, Hotel).PDF

    19.11.2.18 - Strata Plan BCS1615 General Index (Nov 22 2017).pdf

    19.11.2.19 - TaxCertificate PID 026-507-561 - 2-20393 Fraser Hwy (Dec 1-17).PDF

    19.11.2.20 - TaxCertificate - PID 026-507-552 - 1-20393 Fraser Hwy (Dec 1 -17).PDF

    19.11.2.21 - TaxCertificate PID 024-760-579 - 20389 Fraser Hwy (Dec 1-17).PDF

    19.11.2.22 - TITLE-CA1734520-PID-026-507-552 (Cascades SL 1 - 20393 Fraser).PDF

    19.11.2.23 - TITLE-CA1734521-PID-026-507-561 (Cascades SL 2 - 20393 Fraser).PDF

    19.11.2.24 - TITLE-CA5153322-PID-024-760-579 (Office next to Cascades 20389 Fraser).PDF

    19.11.2.25 - Technical Safety BC Response - 20389 Fraser Hwy Langley (Office beside C_Dot_._Dot_.pdf

    19.11.2.26 - Technical Safety BC Response - 20393 Frasery (Cascades Strata Building a_Dot_._Dot_.pdf

    19.11.2.27 - Owner Developers Notice of Different Bylaws.pdf

    19.11.2.28 - Amend to Strata Bylaws - November 14, 2007.pdf

    19.11.2.29 - Fraser Health Authority response for 20389 Fraser (office).pdf

    19.11.2.30 - Fraser Health Authority response for 20393 Fraser (casino_hotel strata lots).pdf

    19.11.3 - c) New Westminster

    19.11.3.1 - Encumbrances

    19.11.3.1.1 - 212086C - City of New West SRW (drainage purposes) part on Plan 15264.PDF

    19.11.3.1.2 - 91801C see 171517E - Undersurface Rights.PDF

    19.11.3.1.3 - AC272535 - City of New West SRW (Dyking _And_ Drainage purposes).PDF

    19.11.3.1.4 - AC272536 - City of New West and Province Covenant (Flooding).PDF

    19.11.3.1.5 - BB121236 - City of New West Covenant (Flooding).PDF

    19.11.3.1.6 - BB121237 - City of New West Covenant (subsidence and geotech report).PDF

    19.11.3.1.7 - BB189998 and BB189999 - Lease and RC appurtenant to Lease in favour of Schanks Queensborough Inc_Dot_.PDF

    19.11.3.1.8 - BB567783 - Notice of DVP 474 re 350 Gifford Street issued Oct 22, 2007.pdf

Printable Index Page 9 of 46

    19.11.3.1.9 - BW314959 - City of New West Covenant (No Build No Occupancy).PDF

    19.11.3.1.10 - BX415334 - Notice of DP 016 Q re 350 Gifford Street Destination Casino .pdf

    19.11.3.1.11 - CA3943189 - Notice of DP Q00066 re 350 Gifford issued August 19 2014.pdf

    19.11.3.1.12 - CA4985149 - Notice of DP Q00107 (minor) for Outdoor Shelter re 350 Gifford issued Feb 3, 2016.pdf

    19.11.3.1.13 - CA5077208 - Restrictive Covenant (gaming) over other lands for Gateway benefit.PDF

    19.11.3.1.14 - CA5469717 - Restrictive Covenant (Gaming Restrictions on other lands).PDF

    19.11.3.1.15 - K35635 to K35640 - Annexed Easement and RC for access and utiltiies (as to part former Lot 2).PDF

    19.11.3.1.16 - P7339 to P7344 - Annexed Easement and RC (access and utilities as to part former Lot 2).PDF

    19.11.3.1.17 - Plan BCP13760 - Scenery in this plan shows the location of 3811 Boundary Road (adjacent to Star Light lands) .PDF

    19.11.3.1.18 - Plan BCP13760 - Subdivision Plan creating Lot 1 (Star Light Casino lands).PDF

    19.11.3.1.19 - Plan BCP1713 - Easement Plan for K35635 to K35640 and P7339 to P7344.PDF

    19.11.3.1.20 - Plan BCP35830 - Exception Plan subdividing portion and showing remainder of Star Light Casino lands.PDF

    19.11.3.1.21 - Plan BCP43137 (showing Rem Lot 61 Plan 64783 3811 Boundary Rd).PDF

    19.11.3.1.22 - Plan NWP64783 showing original boundary of Lot 61 which created Lot 1 and Rem Lot 61.pdf

    19.11.3.1.23 - W8849 - City of New West SRW (dyke and drainage purposes).PDF

    19.11.3.2 - BC Assessment PID 001-109-022 (3811 Boundary vacant Richmond side).pdf

    19.11.3.3 - BC Assessment PID 001-109-022 (Boundary vacant New West side).pdf

    19.11.3.4 - BC Assessment PID 026-069-903 (350 Gifford) (Dec 8-17).pdf

    19.11.3.5 - Site Registry PID 0011109022 (Starlight 350 Gifford Vacant Lot) Nov 26-17.PDF

    19.11.3.6 - Site Registry PID 026069903 (Starlight 350 Gifford) Nov 26-17.PDF

    19.11.3.7 - TaxCertificate PID 001-109-022 - 3811 Boundary (Starlight vacant) (Dec 1-17).PDF

    19.11.3.8 - TaxCertificate PID 001-109-022 (Starlight Boundary New West vacant) Dec 1-17.PDF

    19.11.3.9 - TaxCertificate PID 026-069-903 (Starlight 350 Gifford) Dec 1-17.PDF

    19.11.3.10 - TITLE-CA1734515-PID-001-109-022 (Starlight Casino vacant lot 3811 Boundary).PDF

    19.11.3.11 - TITLE-CA1734516-PID-026-069-903 (Starlight Casino 350 Gifford St).PDF

Printable Index Page 10 of 46

    19.11.3.12 - Technical Safety BC Response - 350 Gifford (Starlight).pdf

    19.11.4 - d) Title Insurance

    19.11.4.1 - Loan CTI Cascades Casino.pdf

    19.11.4.2 - Loan CTI Grand Villa.pdf

    19.11.4.3 - Loan CTI Star Light Casino.pdf

    19.11.4.4 - Owner CTI - Grand Villa Casino Facilities - 170426002170 D1.pdf

    19.11.4.5 - Owner CTI - Cascades Casino Facilitites - 170426002177 D1.pdf

    19.11.4.6 - Owner CTI- Star Light Casino - 170426002175 D1.pdf

    19.11.5 - Brief Title Summary.pdf

    19.12 - Zoning _And_ Development Context

    19.12.1 - Planning Context _And_ Development Opportunities.pdf

    19.13 - Planning_Development Correspondence and By-Laws

    19.13.1 - Burnaby

    19.13.1.1 - 4320 Dominion St.2.pdf

    19.13.1.2 - 4331 Dominion St.2.pdf

    19.13.1.3 - 4405 Norfolk St.2.pdf

    19.13.1.4 - B2 District - Urban Office - Sch 4.pdf

    19.13.1.5 - Board of Variance for 4330 Dominion St 1968 Jan 04.pdf

    19.13.1.6 - C3 District - Gen Commercial - Sch 3.pdf

    19.13.1.7 - CD District - Sch 7.pdf

    19.13.1.8 - Occupancy Certifiate for 4330 Dominion St 1983 Jun 03.pdf

    19.13.1.9 - Occupancy Certificate for 4330 Dominon St 1963 Mar 18.pdf

    19.13.1.10 - P8 District - Parking District - Sch 5.pdf

    19.13.1.11 - Rezoning Reference 15-34 PH Report 20161212.pdf

    19.13.1.12 - Rezoning Report _Hash_13-27 4331 Dominion St.pdf

    19.13.1.13 - Section 6.23 SPEA.PDF

    19.13.2 - Langley

    19.13.2.1 - City of Langley Zoning Response for 20389 Fraser Hwy.pdf

    19.13.2.2 - City of Langley Zoning Response for Units 1 _And_ 2 20393 Fraser Hwy.pdf

    19.13.3 - New Westminster

    19.13.3.1 - City of New West Zoning _And_ Bylaw Response Letter - 350 Gifford Street.pdf

    19.13.3.2 - City of Richmond Zoning Response letter for 3811 Boundary vacant lot.pdf

    19.14 - Environmental

    19.14.1 - Grand Villa Phase 1 ESA Report.pdf

    19.14.2 - Cascades Phase 1 ESA Report_04.24.2017.pdf

Printable Index Page 11 of 46

    19.14.3 - Starlight Phase 1 ESA Report_04.24.2017.pdf

    19.14.4 - Gateway Note re Tree Island Matter.pdf

    19.14.5 - Notification of Likely or Actual Migration_Tree Island-October 2017.pdf

    19.14.6 - Tree Island Protocol 12 - Risk Classification Oct 2017.pdf

    19.14.7 - Gateway Note re Tree Island Matter.DOC

    19.15 - Renovation and Expansion Projects

    19.15.1 - Burnaby

    19.15.1.1 - Head Office

    19.15.1.1.1 - Contracts

    19.15.1.1.1.1 - 14082 05-07-2015 EWA-01.pdf

    19.15.1.1.1.2 - 14082 07-02-2014 GWC HO.PDF

    19.15.1.1.2 - Permit Information

    19.15.1.1.2.1 - Building Permit - BLD14-00971.pdf

    19.15.1.1.3 - Drawings

    19.15.1.1.3.1 - MCW4192.02 Gateway Offices Mechanical IFC.PDF

    19.15.1.1.3.2 - 14082 08.21.14 IFC.PDF

    19.15.1.1.3.3 - 14082 08.21.14 IFC-1.pdf

    19.15.1.1.3.4 - MCW4192.02 Gateway Offices Electrical IFC.PDF

    19.15.1.1.3.5 - 14082 PPA 08.06.14.pdf

    19.15.1.1.3.6 - 14082 PPA-00 Overall Site Plan.pdf

    19.15.1.1.3.7 - 14082 PPA-01.pdf

    19.15.1.1.3.8 - 14082 PPA-02.pdf

    19.15.1.1.3.9 - 14082 G000 Cover.pdf

    19.15.1.1.3.10 - 14082 08.06.14 IFRBP.PDF

    19.15.1.2 - Personas Restaurant

    19.15.1.2.1 - Contracts

    19.15.1.2.1.1 - 15044 06-11-2015 Gateway Personas Seating.pdf

    19.15.1.2.1.2 - 15044 06-11-2015 Gateway Personas Sequins.pdf

    19.15.1.2.2 - Drawings

    .19.15.1.2.2.1 - 15044 2015-07-16 IFC.PDF

    19.15.1.3 - The Buffet and Chow Restaurant

    19.15.1.3.1 - Contracts

    19.15.1.3.1.1 - OEP16158e1.pdf

    19.15.1.3.1.2 - 15045 2016-07-20 Mech Fees BC Comfort.pdf

    19.15.1.3.1.3 - 15045 2016-07-20 Mech Fees Flow.pdf

    19.15.1.3.1.4 - 15045 2016-12-07 Fee Increase Request.pdf

Printable Index Page 12 of 46

    19.15.1.3.1.5 - 15045-EWA-01-2017-05-02.pdf

    19.15.1.3.1.6 - 15045-EWA-01-approval.pdf

    19.15.1.3.1.7 - 15045 - Electrical Fees.pdf

    19.15.1.3.1.8 - 15045 - Mechanical Fees.pdf

    19.15.1.3.1.9 - 15045 2016-06-06 Electrical Fees.pdf

    19.15.1.3.1.10 - 15045 2016-06-08 Villa Buffet.pdf

    19.15.1.3.2 - Permit Information

    19.15.1.3.2.1 - 1251_001.pdf

    19.15.1.3.2.2 - DOC050817-05082017130228.pdf

    19.15.1.3.3 - Drawings

    19.15.1.3.3.1 - 15045 A104 Furniture & Millwork Floor Plan-A104.pdf

    19.15.1.3.3.2 - 15045 BP Documents.pdf

    19.15.1.3.3.3 - 15045 BP Receipts.pdf

    19.15.1.3.3.4 - 15045 ReIFBP Set 2016.10.31.pdf

    19.15.1.3.3.5 - 15045-2017-04-25-Arch.pdf

    19.15.1.3.3.6 - 15045-2017-05-05-IFC.PDF

    19.15.1.3.3.7 - GV BBY Chow Noodle Bar-K01 161031.pdf

    19.15.1.3.3.8 - GV BBY Chow Noodle Bar-K01 170421.pdf

    19.15.1.3.3.9 - GV BBY Chow Noodle Bar-K01 IFC 170505.pdf

    19.15.1.3.3.10 - GV BBY Chow Noodle Bar-K02 IFC 170505.pdf

    19.15.1.3.3.11 - MGB-31A Elec IFC.PDF

    19.15.1.3.3.12 - MGB-31A Elec ReBP.PDF

    19.15.1.3.3.13 - 16-134 Grandvilla Buffet Mech IFC (2017-05-05).pdf

    19.15.1.3.3.14 - 16-134 Mech DWG Re-issued For BP (2017-04-25).pdf

    19.15.1.3.3.15 - 15045 0C001 Cover-C001.pdf

    19.15.1.3.3.16 - 15045 2016.09.07 ARCH BP SET.PDF

    19.15.1.3.3.17 - 15045 2016.09.07 ELEC BP SET.PDF

    19.15.1.3.3.18 - 15045 2016.09.07 KITCHEN BP SET.PDF

    19.15.1.3.3.19 - 15045 2016.09.07 MECH BP SET.PDF

    19.15.1.3.3.20 - 15045-2017-05-05-IFC-ARCH.PDF

    19.15.1.4 - The Buffet Patio

    19.15.1.4.1 - Contracts

    19.15.1.4.1.1 - 15046 2017.04.26 Approved RJC Fee Proposal.pdf

    19.15.1.4.1.2 - 15046 2017-04-04 Fees - Structural.pdf

    19.15.1.4.1.3 - 15046-2017-04-05 Fees - Mechanical.pdf

Printable Index Page 13 of 46

    19.15.1.4.1.4 - 15046-2017-04-19 Fees - Electrical (Gateway’s Invoice).pdf

    19.15.1.4.1.5 - 15046-2017-04-19 Fees - Electrical.pdf

    19.15.1.4.1.6 - Gateway_Grand Villa Casino_Proposal.pdf

    19.15.1.4.1.7 - P15-183_GrandVillaCasino_MGBA.PDF

    19.15.1.4.1.8 - 15045 2017-02-10 Fee Increase Request.pdf

    19.15.1.4.1.9 - 15046 2016-12-14 Gateway Grand Villa Patio Expansion.pdf

    19.15.1.4.1.10 - 15046 2017.04.25 Approved Flow Fee Proposal.pdf

    19.15.1.4.1.11 - 15046 2017.04.26 Approved Opal Fee Proposal.pdf

    19.15.1.4.2 - Permit Information

    19.15.1.4.2.1 - 15046 GV Buffet Patio - IFBP Application Forms.pdf

    19.15.1.4.2.2 - 15046 GV Buffet Patio - IFBP Full Set (002).pdf

    19.15.1.4.2.3 - CoB - 2012 BC Building Code Analysis Summary.pdf

    19.15.1.4.2.4 - CoB - Agent Authorization.pdf

    19.15.1.4.2.5 - CoB - Schedule F - Owner(s) Undertaking.pdf

    19.15.1.4.2.6 - Revised Letter of Intent.pdf

    19.15.1.4.2.7 - Rezoning Application.pdf

    19.15.1.4.2.8 - Sign Bylaw 1972.pdf

    19.15.1.4.2.9 - 2017.03.20 15046 - PPA Application Receipt.pdf

    19.15.1.4.2.10 - 2017.03.20 15046 - PPA Application.pdf

    19.15.1.4.2.11 - 2017.06.29 15046 - Rezoning Approval.pdf

    19.15.1.4.2.12 - 15046 - BP Application Receipt.pdf

    19.15.1.4.3 - Drawings

    19.15.1.4.3.1 - 2017.06.30 15046 - IFP - Electrical.pdf

    19.15.1.4.3.2 - 2017.06.30 15046 - IFP - ID.PDF

    19.15.1.4.3.3 - 2017.06.30 15046 - IFP - Landscape.pdf

    19.15.1.4.3.4 - 2017.06.30 15046 - IFP - Mechanical.pdf

    19.15.1.4.3.5 - 2017.06.30 15046 - IFP - Structural.pdf

    19.15.1.4.3.6 - 15046 2015-10-02 PPA REVIEW.PDF

    19.15.1.4.3.7 - 15046 ATLAS PATIO 2015-06-26.pdf

    19.15.1.4.3.8 - 15046 Full PPA Set 2017.03.20.pdf

    19.15.1.4.3.9 - 15046 GV Buffet Patio - Arch Sched B.PDF

    19.15.1.4.3.10 - 15046 GV Buffet Patio - IFBP Application Forms.pdf

    19.15.1.4.3.11 - 15046 GV Buffet Patio - IFBP Consultants CoI.PDF

    19.15.1.4.3.12 - 15046 GV Buffet Patio - IFBP Full Set.pdf

Printable Index Page 14 of 46

    19.15.1.4.3.13 - 15046 GV Buffet Patio - IFBP Schedules Cont’d.pdf

    19.15.1.4.3.14 - 15046 GV Buffet Patio - IFBP Schedules.pdf

    19.15.1.4.3.15 - 15046 GV Buffet Patio - IFP.PDF

    19.15.1.4.3.16 - 15046 PPA-00 Cover PPA-00 2017.pdf

    19.15.1.4.3.17 - 15046-PPA Review Set.pdf

    19.15.1.4.3.18 - IMAGE.PDF

    19.15.1.4.3.19 - IMAGE2.pdf

    19.15.1.4.3.20 - IMAGE3.pdf

    19.15.1.4.3.21 - 2017.03.20 15046 - PPA Application Receipt.pdf

    19.15.1.4.3.22 - 2017.03.20 15046 - PPA Application.pdf

    19.15.1.4.3.23 - 2017.05.29 15046 IFBP - Electrical.pdf

    19.15.1.4.3.24 - 2017.05.29 15046 IFBP - Landcape.pdf

    19.15.1.4.3.25 - 2017.05.30 15046 IFBP - Architectural.pdf

    19.15.1.4.3.26 - 2017.05.30 15046 IFBP - Mechanical.pdf

    19.15.1.4.3.27 - 2017.05.31 15046 IFBP - Structural.pdf

    19.15.1.4.3.28 - 2017.06.30 15046 - IFP - Architectural.pdf

    19.15.1.5 - Alpina Bar

    19.15.1.5.1 - Contracts

    19.15.1.5.1.1 - Fee Proposal for Grand Villa Bar Renovations.pdf

    19.15.1.5.1.2 - Grand Villa Casino Alpina Bar Reno - Proposal.pdf

    19.15.1.5.1.3 - OEP15155.pdf

    19.15.1.5.1.4 - VAN.039195.0124-PROP-20150724-CM-Restaurant Renovation.pdf

    19.15.1.5.1.5 - 15047 06-11-2015 Gateway Alpina.pdf

    19.15.1.5.1.6 - 15047-2016-04-05 GWC Grand Villa Aplina Bar Renovation Tender Extras.pdf

    19.15.1.5.2 - Permit Information

    19.15.1.5.2.1 - Grand Villa Casino - Floor Plans with Operation Details - Liquor Service Application 05-28-15.pdf

    19.15.1.5.2.2 - List of Food Safe Certified Employees.docx

    19.15.1.5.2.3 - MAN_FSP_Manual_Grand_Villa_032814.pdf

    19.15.1.5.2.4 - Alpina Bar - 4331 Dominion.pdf

    19.15.1.5.2.5 - DOC092215-09222015153826.pdf

    19.15.1.5.3 - Drawings

    19.15.1.5.3.1 - 15047-2016-05-13-IFC-Arch.pdf

    19.15.1.5.3.2 - 15047-2016-05-13-IFC-Full.pdf

    19.15.1.5.3.3 - 15047-ARCH.PDF

Printable Index Page 15 of 46

    19.15.1.5.3.4 - 150806 GWC Grand Villa Alpina - Bar - Mechanical Tender Set.pdf

    19.15.1.5.3.5 - 150806 GWC Grand Villa Alpina - Mechanical IFC Set.pdf

    19.15.1.5.3.6 - MGB-17 Elec IFC.PDF

    19.15.1.5.3.7 - MGB-17 Elec ReIFP.PDF

    19.15.1.5.3.8 - VAN.039195.0124 - Issued for Construction - May 31 2016.pdf

    19.15.1.5.3.9 - VAN.039195.0124 - Re-Issued for Pricing - April 06 2016.pdf

    19.15.1.5.3.10 - 15047-2015-09-11 IFBP.PDF

    19.15.1.5.3.11 - 15047-2015-10-26 Specifications.pdf

    19.15.1.5.3.12 - 15047-2016-04-06-ReIFP.PDF

    19.15.1.6 - Atlas Restaurant

    19.15.1.6.1 - Contracts

    19.15.1.6.1.1 - 15134 2016-06-23 Villa Atlas.pdf

    19.15.1.6.1.2 - 15134-EWA-01-2017-05-12.pdf

    19.15.1.6.1.3 - 15134-EWA-02-2017-06-07.pdf

    19.15.1.6.1.4 - CCDC 2 - GV Atlas Executed FINAL.PDF

    19.15.1.6.1.5 - 15134 2016-05-04 Villa Atlas.pdf

    19.15.1.6.2 - Permit Information

    19.15.1.6.2.1 - 15134 Schedule F.PDF

    19.15.1.6.2.2 - 15134-BP.PDF

    19.15.1.6.2.3 - Tenant Improvement Permit (including Fast Tracking).pdf

    19.15.1.6.2.4 - Tenant Improvement Permits.pdf

    19.15.1.6.2.5 - 15134 Agent Authorization copy.pdf

    19.15.1.6.2.6 - 15134 Building Permit Application.pdf

    19.15.1.6.2.7 - 15134 2016.07.28-BP Documents.pdf

    19.15.1.6.2.8 - 15134 2016.07.28-BP Receipt.pdf

    19.15.1.6.3 - Drawings

    19.15.1.6.3.1 - 15134 RePPA 2016.10.27.pdf

    19.15.1.6.3.2 - 15134_2017-01-27 Appendix B - Commissary Spec Manual.pdf

    19.15.1.6.3.3 - 15134_Atlas Commissary IFC_2017.06.26.pdf

    19.15.1.6.3.4 - 15134-Arch_dwgs_for_Tender_Set.pdf

    19.15.1.6.3.5 - 15134-Arch-Re-BP-2017-06-02.pdf

    19.15.1.6.3.6 - 15134-Commissary-Arch-IFC.PDF

    19.15.1.6.3.7 - 15134-Commissary-Arch-Specs.pdf

Printable Index Page 16 of 46

    19.15.1.6.3.8 - 15134-Commissary-Elec-IFC.PDF

    19.15.1.6.3.9 - 15134-Commissary-Elec-ReIFC.PDF

    19.15.1.6.3.10 - 15134-Commissary-IFBP.PDF

    19.15.1.6.3.11 - 15134-Commissary-Kitchen-IFC.PDF

    19.15.1.6.3.12 - 15134-Kitchen-IFBP.PDF

    19.15.1.6.3.13 - 15134-Re-PPA-2017-06-06.pdf

    19.15.1.6.3.14 - 160701 Grand Villa Atlas Restaurant - Mechanical IFC’s.pdf

    19.15.1.6.3.15 - 160701 Grand Villa Ebo Restaurant M-1.1.pdf

    19.15.1.6.3.16 - 160701 Grand Villa Ebo Restaurant M-1.2.pdf

    19.15.1.6.3.17 - 160701 Grand Villa Ebo Restaurant M-2.4.pdf

    19.15.1.6.3.18 - 160701 Grand Villa Ebo Restaurant M-2.5.pdf

    19.15.1.6.3.19 - BBY GV Ebo Kitchen K01 - 170504.pdf

    19.15.1.6.3.20 - BBY GV Ebo Kitchen K02 - 170504.pdf

    19.15.1.6.3.21 - BBY GV Ebo Preliminary Hood PDF 170504.pdf

    19.15.1.6.3.22 - 2016.10.27- 15134 - Transmittal.pdf

    19.15.1.6.3.23 - 2016.11.03 PPA16-00215 Approval.pdf

    19.15.1.6.3.24 - 2017.06.01 MGB-31D Elec BP.PDF

    19.15.1.6.3.25 - 15134 2016.07.28 ARCH BP SET.PDF

    19.15.1.6.3.26 - 15134 2016.07.28 ARCH PPA SET.PDF

    19.15.1.6.3.27 - 15134 2016.07.28 ELEC BP SET.PDF

    19.15.1.6.3.28 - 15134 2016.07.28 KITCHEN BP SET.PDF

    19.15.1.6.3.29 - 15134 2016.07.28 MECH BP SET.PDF

    19.15.1.6.3.30 - 15134 2016.07.28-PPA Receipt.pdf

    19.15.1.6.3.31 - 15134 A103 PPA - Proposed Floor Plan-A103.pdf

    19.15.1.7 - VIP and Poker Room

    19.15.1.7.1 - Contracts

    19.15.1.7.1.1 - 16004-2017-03-20-Opal.pdf

    19.15.1.7.1.2 - 16004-2017-03-20-Zoom.pdf

    19.15.1.7.1.3 - 16004-EWA-01-2017-06-07.pdf

    19.15.1.7.1.4 - Approved- Zoom Eng - March 21 2017.pdf

    19.15.1.7.1.5 - VA17-10171 Gateway VIP Area, Grand Villa.pdf

    19.15.1.7.1.6 - 16004 2016-12-14 Gateway Grand Villa VIP.PDF

    19.15.1.7.1.7 - 16004 2017-02-10 PPA and Prelim ID Fee.pdf

    19.15.1.7.1.8 - 16004-2017-03-20-Fluid.pdf

    19.15.1.7.2 - Permit Information

    19.15.1.7.2.1 - 16004 GV VIP - Demo Permit Receipt.pdf

Printable Index Page 17 of 46

    19.15.1.7.2.2 - 16004 GV VIP - Demo Permit.pdf

    19.15.1.7.2.3 - 99100.pdf

    19.15.1.7.2.4 - Agent Authorization Form.pdf

    19.15.1.7.2.5 - Approval Guide - PPA.PDF

    19.15.1.7.2.6 - Planning Application Fees.pdf

    19.15.1.7.2.7 - RP_scan.pdf

    19.15.1.7.2.8 - scan.pdf

    19.15.1.7.2.9 - SKM_364e17081610160.pdf

    19.15.1.7.2.10 - 2017.08.31 16004 PPA reApplication Fee.pdf

    19.15.1.7.2.11 - 16004 - Demo Permit Application Receipt.pdf

    19.15.1.7.3 - Drawings

    19.15.1.7.3.1 - 16004_Issue for Building Permit_Architectural_2017.03.31.pdf

    19.15.1.7.3.2 - 16004-2017-03-31-IBP.PDF

    19.15.1.7.3.3 - 16004-A001 Parking Tables A001 (1).pdf

    19.15.1.7.3.4 - 16004-A001 Parking Tables-A001.pdf

    19.15.1.7.3.5 - 16004-A002 Lower Gaming Plan-A002.pdf

    19.15.1.7.3.6 - 16004-A003 Upper Gaming Plan-A003.pdf

    19.15.1.7.3.7 - 16004-A101 Overall Plan-A101.pdf

    19.15.1.7.3.8 - 16004-A102 Existing Plan-A102.pdf

    19.15.1.7.3.9 - 16004-A103 Proposed Plan-A103.pdf

    19.15.1.7.3.10 - 16004-Gateway VIP - ReIssue for BP 2018.08.11.pdf

    19.15.1.7.3.11 - 16004-GV VIP-PPA Set.pdf

    19.15.1.7.3.12 - Electrical.pdf

    19.15.1.7.3.13 - Mechanical.pdf

    19.15.1.7.3.14 - 2017.05.30 16004 GV VIP - Issued for Int Demo Permit.pdf

    19.15.1.7.3.15 - 16004 0C001 Cover-C001.pdf

    19.15.1.7.3.16 - 16004 0G001 Project Index-G001.pdf

    19.15.1.7.3.17 - 16004 0SP101 Site Plan-A101.pdf

    19.15.1.7.3.18 - 16004 2017.08.25 PPA Amendment.pdf

    19.15.1.7.3.19 - 16004 GV VIP - Demolition Permit Application.pdf

    19.15.1.7.3.20 - 16004 PPA Area Review.pdf

    19.15.1.7.3.21 - 16004_Issue for BP Amendment_Architectural_2017.08.24.pdf

    19.15.1.8 - Atlas Kitchen

    19.15.1.8.1 - Contracts

    19.15.1.8.1.1 - 17041-Elec-Revised Fee.pdf

Printable Index Page 18 of 46

    19.15.1.8.1.2 - 17041-EWA-01.pdf

    19.15.1.8.1.3 - 17041-EWA-01-approval.pdf

    19.15.1.8.1.4 - 17041-Mech-Revised Fee.pdf

    19.15.1.8.1.5 - MGBA PO 2718817 ADDL_EWA 1 2017 05 11.pdf

    19.15.1.8.1.6 - 17041 2017-04-04 Fees - Opal.pdf

    19.15.1.8.1.7 - 17041 2017-04-05 Fees - Fluid.pdf

    19.15.1.8.1.8 - 17041 2017-04-10 Villa Commissary Kitchen.pdf

    19.15.1.9 - As Built Drawings

    19.15.1.9.1 - 15046 Original Arch - Combined Set

    19.15.1.9.1.1 - 15046 Original Arch - Combined Set.pdf

    19.15.1.9.2 - 0406 A-4.2.2.pdf

    19.15.1.9.3 - 0406 A-2.1.1.pdf

    19.15.1.9.4 - 0406 A-2.1.2.pdf

    19.15.1.9.5 - 0406 A-2.1.3.pdf

    19.15.1.9.6 - 0406 A-2.1.4.pdf

    19.15.1.9.7 - 0406 A-2.1.5.pdf

    19.15.1.9.8 - 0406 A-2.1.6.pdf

    19.15.1.9.9 - 0406 A-2.2.1.pdf

    19.15.1.9.10 - 0406 A-2.2.2.pdf

    19.15.1.9.11 - 0406 A-2.2.3.pdf

    19.15.1.9.12 - 0406 A-2.2.4.pdf

    19.15.1.9.13 - 0406 A-4.1.1.pdf

    19.15.1.9.14 - 0406 A-4.2.1.pdf

    19.15.1.9.15 - 0406 A-5.1.0.pdf

    19.15.1.9.16 - 0406 A-5.1.1.pdf

    19.15.1.9.17 - 0406 A-5.1.2.pdf

    19.15.1.9.18 - 0406 A-5.1.3.pdf

    19.15.1.9.19 - 0406 A-5.1.4.pdf

    19.15.1.9.20 - 0406 A-5.1.5.pdf

    19.15.1.9.21 - 0406 A-5.1.6.pdf

    19.15.1.9.22 - 0406 A-6.1.1.pdf

    19.15.1.9.23 - 0406 A-6.1.2.pdf

    19.15.1.9.24 - 0406 A-6.1.3.pdf

    19.15.1.9.25 - 0406 A-6.1.4.pdf

    19.15.1.9.26 - 0406 A-6.1.5.pdf

    19.15.1.9.27 - 0406 A-6.1.6.pdf

Printable Index Page 19 of 46

    19.15.1.9.28 - 0406 A-7.1.1.pdf

    19.15.1.9.29 - 0406 A-7.2.1.pdf

    19.15.1.9.30 - 0406 A-7.3.1.pdf

    19.15.1.9.31 - 0406 A-7.4.1.pdf

    19.15.1.9.32 - 0406 A-8.1.1.pdf

    19.15.1.9.33 - 0406 A-8.1.2.pdf

    19.15.1.9.34 - 0406 A-8.1.3.pdf

    19.15.1.9.35 - 0406 A-8.1.4.pdf

    19.15.1.9.36 - 0406 A-8.1.5.pdf

    19.15.1.9.37 - 0406 A-8.1.6.pdf

    19.15.1.9.38 - 0406 A-8.2.5.pdf

    19.15.1.9.39 - 0406 A-8.1.7.pdf

    19.15.1.9.40 - 0406 A-8.2.1.pdf

    19.15.1.9.41 - 0406 A-8.2.2.pdf

    19.15.1.9.42 - 0406 A-8.2.3.pdf

    19.15.1.9.43 - 0406 A-8.2.4.pdf

    19.15.1.9.44 - 0406 A-8.2.6.pdf

    19.15.1.9.45 - 0406 A-8.2.7.pdf

    19.15.1.9.46 - 0406 A-8.3.1.pdf

    19.15.1.9.47 - 0406 A-8.3.2.pdf

    19.15.1.9.48 - 0406 A-8.3.3.pdf

    19.15.1.9.49 - 0406 A-8.3.4.pdf

    19.15.1.9.50 - 0406 A-8.3.5.pdf

    19.15.1.9.51 - 0406 A-8.3.6.pdf

    19.15.1.9.52 - 0406 A-8.3.7.pdf

    19.15.1.9.53 - 0406 A-8.3.8.pdf

    19.15.1.9.54 - 0406 A-8.4.1.pdf

    19.15.1.9.55 - 0406 A-8.4.1A.pdf

    19.15.1.9.56 - 0406 A-9.1.1.pdf

    19.15.1.9.57 - 0406 A-9.1.2.pdf

    19.15.1.9.58 - 0406 A-9.1.3.pdf

    19.15.1.9.59 - 0406 A-9.1.4.pdf

    19.15.1.9.60 - 0406 A-9.1.5.pdf

    19.15.1.9.61 - 0406 A-9.1.6.pdf

    19.15.1.9.62 - 0406 A-9.1.7.pdf

    19.15.1.9.63 - 0406 A-9.1.8.pdf

    19.15.1.9.64 - 0406 A-9.1.9.pdf

Printable Index Page 20 of 46

    19.15.1.9.65 - 0406 A-9.1.10.pdf

    19.15.1.9.66 - 0406 A-9.2.1.pdf

    19.15.1.9.67 - 0406 A-9.2.2.pdf

    19.15.1.9.68 - 0406 A-9.2.3.pdf

    19.15.1.9.69 - 0406 A-9.2.4.pdf

    19.15.1.9.70 - 0406 A-9.2.5.pdf

    19.15.1.9.71 - 0406 A-9.3.1.pdf

    19.15.1.9.72 - 0406 A-9.3.2.pdf

    19.15.1.9.73 - 32030 - E200 P1 LEVEL PLAN ELECTRICAL.pdf

    19.15.1.9.74 - 32030 - E201 Lighting Plan.pdf

    19.15.1.9.75 - 32030 - E202 Power & Low Tension Plan.pdf

    19.15.1.9.76 - 32030 - E203 Upper Floors Power & Low Tension.pdf

    19.15.1.9.77 - 32030 - E300 KITCHEN ELECTRICAL DETAIL PLAN 1.pdf

    19.15.1.9.78 - 32030 - E301 KITCHEN ELECTRICAL DETAIL PLAN 2.pdf

    19.15.1.9.79 - 32030 - E302 Foodservice Equipment Demolition Plan.pdf

    19.15.1.9.80 - 32030 - E400 Electrical Specification.pdf

    19.15.1.9.81 - 32030 - Grand Villa F & B Renovation - Combined Set.pdf

    19.15.1.9.82 - E100_ASB.pdf

    19.15.1.9.83 - E101_ASB.pdf

    19.15.1.9.84 - E102_ASB.pdf

    19.15.1.9.85 - E111_ASB.pdf

    19.15.1.9.86 - E112_ASB.pdf

    19.15.1.9.87 - E113_ASB.pdf

    19.15.1.9.88 - E116_ASB.pdf

    19.15.1.9.89 - E121_ASB.pdf

    19.15.1.9.90 - E131_ASB.pdf

    19.15.1.9.91 - E140_ASB.pdf

    19.15.1.9.92 - E141_ASB.pdf

    19.15.1.9.93 - E145_ASB.pdf

    19.15.1.9.94 - E211_ASB.pdf

    19.15.1.9.95 - E214_ASB.pdf

    19.15.1.9.96 - E215_ASB.pdf

    19.15.1.9.97 - E216_ASB.pdf

    19.15.1.9.98 - E223_ASB.pdf

Printable Index Page 21 of 46

    19.15.1.9.99 - E224_ASB.pdf

    19.15.1.9.100 - E225_ASB.pdf

    19.15.1.9.101 - E227_ASB.pdf

    19.15.1.9.102 - E228_ASB.pdf

    19.15.1.9.103 - E230_ASB.pdf

    19.15.1.9.104 - E231_ASB.pdf

    19.15.1.9.105 - E240_ASB.pdf

    19.15.1.9.106 - E312-ASB.pdf

    19.15.1.9.107 - E313_ASB.pdf

    19.15.1.9.108 - E314_ASB.pdf

    19.15.1.9.109 - E322_ASB.pdf

    19.15.1.9.110 - E323-ASB.pdf

    19.15.1.9.111 - T111_ASB.pdf

    19.15.1.9.112 - T112_ASB.pdf

    19.15.1.9.113 - T211_ASB.pdf

    19.15.1.9.114 - T214_ASB.pdf

    19.15.1.9.115 - T215_ASB.pdf

    19.15.1.9.116 - T221_ASB.pdf

    19.15.1.9.117 - T233_ASB.pdf

    19.15.1.9.118 - T234_ASB.pdf

    19.15.1.9.119 - T300_ASB.pdf

    19.15.1.9.120 - 042527000 M-04.1.pdf

    19.15.1.9.121 - 042527000 M-04.2.pdf

    19.15.1.9.122 - 042527000 M-04.3.pdf

    19.15.1.9.123 - 042527000 M-05.1.pdf

    19.15.1.9.124 - 042527000 M-01.pdf

    19.15.1.9.125 - 042527000 M-03.pdf

    19.15.1.9.126 - 042527000 M-05.2.pdf

    19.15.1.9.127 - 042527000 M-05.3.pdf

    19.15.1.9.128 - 042527000 M-05.4.pdf

    19.15.1.9.129 - 042527000 M-06.1.pdf

    19.15.1.9.130 - 042527000 M-06.2.pdf

    19.15.1.9.131 - 042527000 M-06.3.pdf

    19.15.1.9.132 - 042527000 M-06.4.pdf

    19.15.1.9.133 - 042527000 M-06.5.pdf

    19.15.1.9.134 - 042527000 M-06.6.pdf

    19.15.1.9.135 - 042527000 M-07.1.pdf

Printable Index Page 22 of 46

    19.15.1.9.136 - 042527000 M-07.2.pdf

    19.15.1.9.137 - 042527000 M-07.3.pdf

    19.15.1.9.138 - 042527000 M-07.4.pdf

    19.15.1.9.139 - 042527000 M-07.5.pdf

    19.15.1.9.140 - 042527000 M-07.6.pdf

    19.15.1.9.141 - 042527000 M-08.1.pdf

    19.15.1.9.142 - 042527000 M-08.2.pdf

    19.15.1.9.143 - 042527000 M-08.3.pdf

    19.15.1.9.144 - 042527000 M-08.4.pdf

    19.15.1.9.145 - 042527000 M-09.1.pdf

    19.15.1.9.146 - 042527000 M-09.2.pdf

    19.15.1.9.147 - 042527000 M-09.3.pdf

    19.15.1.9.148 - 042527000 M-09.4.pdf

    19.15.1.9.149 - 042527000 M-09.5.pdf

    19.15.1.9.150 - 042527000 M-09.6.pdf

    19.15.1.9.151 - 042527000 M-10.1.pdf

    19.15.1.9.152 - 042527000 M-10.2.pdf

    19.15.1.9.153 - 042527000 M-10.3.pdf

    19.15.1.9.154 - 042527000 M-10.4.pdf

    19.15.1.9.155 - 042527000 M-10.5.pdf

    19.15.1.9.156 - 042527000 M-11.1.pdf

    19.15.1.9.157 - 042527000 M-11.2.pdf

    19.15.1.9.158 - 042527000 M-11.3.pdf

    19.15.1.9.159 - 042527000 M-11.4.pdf

    19.15.1.9.160 - 042527000 M-11.5.pdf

    19.15.1.9.161 - 042527000 M-12.1.pdf

    19.15.1.9.162 - 042527000 M-12.2.pdf

    19.15.1.9.163 - 042527000 M-12.3.pdf

    19.15.1.9.164 - 39195 Combined Site.pdf

    19.15.1.9.165 - 39195-01 S1-01-36x52.pdf

    19.15.1.9.166 - 39195-01 S1-02-36x52.pdf

    19.15.1.9.167 - 39195-01 S1-03-36x52.pdf

    19.15.1.9.168 - 39195-01 S2-01-36x52.pdf

    19.15.1.9.169 - 39195-01 S2-02-36x52.pdf

    19.15.1.9.170 - 39195-01 S2-03-36x52.pdf

    19.15.1.9.171 - 39195-01 S2-04-36x52.pdf

Printable Index Page 23 of 46

    19.15.1.9.172 - 39195-01 S2-05-36x52.pdf

    19.15.1.9.173 - 39195-01 S2-06-36x52.pdf

    19.15.1.9.174 - 39195-01 S2-07-36x52.pdf

    19.15.1.9.175 - 39195-01 S2-08-36x52.pdf

    19.15.1.9.176 - 39195-01 S2-09-36x52.pdf

    19.15.1.9.177 - 39195-01 S2-10-36x52.pdf

    19.15.1.9.178 - 39195-01 S2-11-36x52.pdf

    19.15.1.9.179 - 39195-01 S2-12-36x52.pdf

    19.15.1.9.180 - 39195-01 S2-13-36x52.pdf

    19.15.1.9.181 - 39195-01 S2-14-36x52.pdf

    19.15.1.9.182 - 39195-01 S3-01-36x52.pdf

    19.15.1.9.183 - 39195-01 S3-02-S3.02.pdf

    19.15.1.9.184 - 39195-01 S4.01-S4.01.pdf

    19.15.1.9.185 - 39195-01 S4.02-S4.02.pdf

    19.15.1.9.186 - 39195-01 S4.03-S4.03.pdf

    19.15.1.9.187 - 39195-01 S4.04-S4.04.pdf

    19.15.1.9.188 - 39195-01 S4.05-S4.05.pdf

    19.15.1.9.189 - 39195-01 S4.06-SHEET.pdf

    19.15.1.9.190 - 39195-01 S4.07-SHEET.pdf

    19.15.1.9.191 - 39195-01-S4.08-36x52.pdf

    19.15.1.9.192 - 39195-01-S4.09-36x52.pdf

    19.15.1.9.193 - 39195-01-S4.10-36x52.pdf

    19.15.1.9.194 - 39195-01-S4.11-36x52.pdf

    19.15.1.9.195 - 39195-01-S4.12-36x52.pdf

    19.15.1.9.196 - ID.1.2.3-183 AccFlr.pdf

    19.15.1.9.197 - ID.1.1.1-163 RCP.pdf

    19.15.1.9.198 - ID.1.1.2-163 FlrFin.pdf

    19.15.1.9.199 - ID.1.1.3-163 AccFlr.pdf

    19.15.1.9.200 - ID.1.1-163 Plan.pdf

    19.15.1.9.201 - ID.1.2.1-183 RCP.pdf

    19.15.1.9.202 - ID.1.2.1-183 RCP-2.pdf

    19.15.1.9.203 - ID.1.2.2-183 FlrFin.pdf

    19.15.1.9.204 - ID.1.2-183 Plan.pdf

    19.15.1.9.205 - ID.1.2-183 Plan-2.pdf

    19.15.1.9.206 - ID.1.3-195 Plans.pdf

    19.15.1.9.207 - ID.2.1-Sections Overall.pdf

Printable Index Page 18 of 46

    19.15.1.9.208 - ID.3.1-163 WC E.pdf

    19.15.1.9.209 - ID.3.2-163 WC W.pdf

    19.15.1.9.210 - ID.3.3-183 WC E.pdf

    19.15.1.9.211 - ID.4.2-Atrium Sections02.pdf

    19.15.1.9.212 - ID.4.3-Atrium Sections03.pdf

    19.15.1.9.213 - ID.4.4-Atrium Fountain.pdf

    19.15.1.9.214 - ID.4.6-Central Bar Mlwrk.pdf

    19.15.1.9.215 - ID.4.7-Cetral Bar Mlwrk.pdf

    19.15.1.9.216 - ID.4.8-Central Bar Mlwrk.pdf

    19.15.1.9.217 - ID.5.1-Showbar-Sections.pdf

    19.15.1.9.218 - ID.5.5-Deli Mlwrk.pdf

    19.15.1.9.219 - ID.6.1-Poker Elev.pdf

    19.15.1.9.220 - ID.6.2-Poker Details.pdf

    19.15.1.9.221 - ID.8.2-183 SmkRm Details02.pdf

    19.15.1.9.222 - ID.8.3-183 Cashier.pdf

    19.15.1.9.223 - ID.8.4-Host Counter Mlwrk.pdf

    19.15.1.9.224 - ID.9.2-Cash Mlwrk01.pdf

    19.15.1.9.225 - ID.9.3-Cash Mlwrk02.pdf

    19.15.1.9.226 - ID.10.1-183 View Bar.pdf

    19.15.1.9.227 - ID.10.2-183 View Bar Mlwrk.pdf

    19.15.1.9.228 - ID.11.1-163 High Limit01.pdf

    19.15.1.9.229 - ID.11.2-163 High Limit02.pdf

    19.15.1.9.230 - ID.12.1-149 Grn Room.pdf

    19.15.1.9.231 - ID.12.2-Copy & Kitchen Mlwrk.pdf

    19.15.1.9.232 - ID.12.3-Freestanding Mlwrk.pdf

    19.15.1.9.233 - ID.13.1-183 Maple Room.pdf

    19.15.1.9.234 - ID.13.2-Maple Elevations.pdf

    19.15.1.9.235 - 16.10.12_ID1.1_COVER SHEET.pdf

    19.15.1.9.236 - 16.10.12_ID1.2_FURNITURE PLAN.pdf

    19.15.1.9.237 - 16.10.12_ID1.3_DEMOLITION PLAN.pdf

    19.15.1.9.238 - 16.10.12_ID1.4_DEMOLITION RCP.pdf

    19.15.1.9.239 - 16.10.12_ID1.5_PARTITION PLAN.pdf

    19.15.1.9.240 - 16.10.12_ID1.6_RCP.pdf

    19.15.1.9.241 - 16.10.12_ID1.6_RCP-2.pdf

    19.15.1.9.242 - 16.10.12_ID1.7_ELECTRICAL PLAN.pdf

    19.15.1.9.243 - 16.10.12_ID1.8_FLOOR FINISH PLAN.pdf

    19.15.1.9.244 - 16.10.12_ID2.1_ELEVATION 1.pdf

Printable Index Page 25 of 46

    19.15.1.9.245 - 16.10.12_ID5.2_BUFFET BANQUETTE DETAIL.pdf

    19.15.1.9.246 - 16.10.12_ID2.2_ELEVATION 2.pdf

    19.15.1.9.247 - 16.10.12_ID3.1_DNB.pdf

    19.15.1.9.248 - 16.10.12_ID4.1_TAPAS BAR.pdf

    19.15.1.9.249 - 16.10.12_ID5.1_BUFFET DETAIL.pdf

    19.15.1.9.250 - 16.10.12_ID5.3_BEVERAGE & DESSERT STATION.pdf

    19.15.1.9.251 - 16.10.12_ID5.4_HOSTESS STAND.pdf

    19.15.1.9.252 - 16.10.12_ID6.1_PERSONA BANQUETTE DETAIL.pdf

    19.15.1.9.253 - 16.10.12_ID6.2_PERSONA BOOTH DETAIL.pdf

    19.15.1.9.254 - 16.10.12_ID7.1_FEATURE BAR.pdf

    19.15.1.9.255 - 16.10.12_ID8.1_FEATURE WALL & COLUMN DETAIL.pdf

    19.15.2 - Langley

    19.15.2.1 - Match and Patio

    19.15.2.1.1 - Contracts

    19.15.2.1.1.1 - 13122 Fees - Kitchen.pdf

    19.15.2.1.1.2 - 13122 Fees - Landscape.pdf

    19.15.2.1.1.3 - 13122 Fees - Mechanical.pdf

    19.15.2.1.1.4 - 13022 Fees - Electrical.pdf

    19.15.2.1.1.5 - 13122 01-15-2014 Gateway Langley Match Design BP and Construction.pdf

    19.15.2.1.2 - Permit Information

    19.15.2.1.2.1 - 13122 Schedule A Package C.PDF

    19.15.2.1.2.2 - 13122 Schedule B - Package A.PDF

    19.15.2.1.2.3 - 13122 Schedule B - Package C.PDF

    19.15.2.1.2.4 - 13122 Schedule c-a - Package A.PDF

    19.15.2.1.2.5 - 13122 Schedule c-a - Package C.PDF

    19.15.2.1.2.6 - 13122 Schedule c-b - Package A.PDF

    19.15.2.1.2.7 - 13122 Schedule c-b - Package C.PDF

    19.15.2.1.2.8 - BP001184-Review1.pdf

    19.15.2.1.2.9 - BP001185-Review1.pdf

    19.15.2.1.2.10 - 13122 01-02-2014 Sustainability Checklist.pdf

    19.15.2.1.2.11 - 13122 Cheques (not used).pdf

    19.15.2.1.2.12 - 13122 City of Langley Form 2 - Proof of Insurance.pdf

    19.15.2.1.2.13 - 13122 Langley Form 1 - Package A.PDF

    19.15.2.1.2.14 - 13122 Langley Form 1 - Package C.PDF

Printable Index Page 26 of 46

    19.15.2.1.2.15 - 13122 Owners Authorization.pdf

    19.15.2.1.2.16 - 13122 Package A Application.pdf

    19.15.2.1.2.17 - 13122 Package A Letters of Assurance.pdf

    19.15.2.1.2.18 - 13122 Package C Application.pdf

    19.15.2.1.2.19 - 13122 Package C Letters of Assurance.pdf

    19.15.2.1.2.20 - 13122 Schedule A Package A.PDF

    19.15.2.1.2.21 - 13122 Gateway Langley_Development Application.pdf

    19.15.2.1.3 - Drawings

    19.15.2.1.3.1 - 13122 2014.02.28 Package A and C Specifications.pdf

    19.15.2.1.3.2 - 13122 Package A Architectural.pdf

    19.15.2.1.3.3 - 13122-AA001-CodePlan.pdf

    19.15.2.1.3.4 - 13122-AA100-Site Plan.pdf

    19.15.2.1.3.5 - 13122-AA101-Overall Plan.pdf

    19.15.2.1.3.6 - 13122-AA102-Demolition Plan.pdf

    19.15.2.1.3.7 - 13122-AA103-Construction Plan.pdf

    19.15.2.1.3.8 - 13122-AA104-Demo RCP.PDF

    19.15.2.1.3.9 - 13122-AA105-RCP.PDF

    19.15.2.1.3.10 - 13122-AA401-Sections.pdf

    19.15.2.1.3.11 - 13122-AA501-Millwork.pdf

    19.15.2.1.3.12 - 13122-AA502-Centre Bar.pdf

    19.15.2.1.3.13 - 13122-AA503-Washroom.pdf

    19.15.2.1.3.14 - 13122-AA504-Kitchen.pdf

    19.15.2.1.3.15 - 13122-AG000-Cover.pdf

    19.15.2.1.3.16 - 13122-AG001-General.pdf

    19.15.2.1.3.17 - 13122-Arch (interior renovation).pdf

    19.15.2.1.3.18 - 13122-Arch (patio).pdf

    19.15.2.1.3.19 - 13122-PackageA.PDF

    19.15.2.1.3.20 - 13122-PackageC.PDF

    19.15.2.1.3.21 - 14009 PACKAGE A STRUCTURAL FOR PERMIT.PDF

    19.15.2.1.3.22 - 14009 PACKAGE C STRUCTURAL FOR PERMIT.PDF

    19.15.2.1.3.23 - 14009 STRUCTURAL A.PDF

    19.15.2.1.3.24 - 14009 STRUCTURAL C.PDF

    19.15.2.1.3.25 - 33043 E1of1 Pkg C Electrical.pdf

    19.15.2.1.3.26 - 33043 E1of1 PkgC Electrical Plans.pdf

Printable Index Page 27 of 46

    19.15.2.1.3.27 - 33043 E100A Single Line Diagram.pdf

    19.15.2.1.3.28 - 33043 E200A Electrical Plans.pdf

    19.15.2.1.3.29 - 33043 E201A Existing Electrical Plans.pdf

    19.15.2.1.3.30 - 33043 E300A Food Services Plans & Schedule .pdf

    19.15.2.1.3.31 - 33043 Pkg A Electrical IFC.PDF

    19.15.2.1.3.32 - 33043-E400A Electrical Specification.pdf

    19.15.2.1.3.33 - 131204 Gateway Langley M1-0.pdf

    19.15.2.1.3.34 - 131204 Gateway Langley M1-1.pdf

    19.15.2.1.3.35 - 131204 Gateway Langley M-1C.PDF

    19.15.2.1.3.36 - 131204 Gateway Langley M2-0.pdf

    19.15.2.1.3.37 - 131204 Gateway Langley M2-1.pdf

    19.15.2.1.3.38 - 131204 Gateway Langley M2-2.pdf

    19.15.2.1.3.39 - 131204 Gateway Langley M3-0 (24-02-2014).pdf

    19.15.2.1.3.40 - 131204 Gateway Langley M3-0.pdf

    19.15.2.1.3.41 - Phase C 131204 Gateway Langley M-1.pdf

    19.15.2.1.3.42 - 13-055 Cascades Langley-Landscape Pricing.pdf

    19.15.2.1.3.43 - 13122 2014.01.27 Package A Issued for BP.PDF

    19.15.2.1.3.44 - 13122 2014.01.27 Package C Issued for BP.PDF

    19.15.2.1.3.45 - 13122 01-13-2014 Gateway Langley DP Submission.pdf

    19.15.2.1.3.46 - GAT-4_FIN SPEC IFC_140228.pdf

    19.15.2.1.3.47 - GAT-4_FURN SPECS IFC_140226.pdf

    19.15.2.1.3.48 - GAT-4_HW SPEC IFC_140228.pdf

    19.15.2.1.3.49 - GAT-4_LT SPEC IFC_140228.pdf

    19.15.2.1.3.50 - GAT-4_PL SPEC IFC_140228.pdf

    19.15.2.1.3.51 - GAT-4_WA SPEC IFC_140228.pdf

    19.15.2.2 - Theatre Bar

    19.15.2.2.1 - Contracts

    19.15.2.2.1.1 - 14013 07-28-2014 Gateway Langley Cafe and Theatre Bar Design BP and Construction Extras.pdf

    19.15.2.2.1.2 - 14013 11-19-2014 Gateway Langley Cafe and Theatre Bar Design BP and Construction Extras.pdf

    19.15.2.2.1.3 - Cascades Langley Part 2 Renos MGB Architects Fee Letter.pdf

    19.15.2.2.1.4 - 14013 01-15-2014 Gateway Langley Cafe and Theatre Bar Design BP and Construction.pdf

    19.15.2.2.1.5 - 14013 02-05-2014 MGBA - Cascades Buffet and Theatre Bar - 24-14-00234.pdf

    19.15.2.2.2 - Permit Information

    19.15.2.2.2.1 - AHJ.PDF

Printable Index Page 28 of 46

    19.15.2.2.2.2 - BP001215 - Letter1.pdf

    19.15.2.2.2.3 - BP001215-Review1.pdf

    19.15.2.2.2.4 - City of Langley Form 2 - Proof of Insurance.pdf

    19.15.2.2.2.5 - Schedule A - Package B.PDF

    19.15.2.2.2.6 - Schedule B - Package B.PDF

    19.15.2.2.2.7 - Seig - Building Permit Application (990020.01) R1.pdf

    19.15.2.2.2.8 - 13122 01-02-2014 Sustainability Checklist.pdf

    19.15.2.2.2.9 - 13122 City of Langley Form 2 - Proof of Insurance.pdf

    19.15.2.2.2.10 - 13122 Langley Form 1 - Package A.PDF

    19.15.2.2.2.11 - 14013 09.05.14 Letter of Occupancy.pdf

    19.15.2.2.2.12 - 14013 09.0514 Viking Protection Letter.pdf

    19.15.2.2.3 - Drawings

    19.15.2.2.3.1 - 14013B-A001-Code Plan (6).pdf

    19.15.2.2.3.2 - 14013B-A100-Site Plan (1).pdf

    19.15.2.2.3.3 - 14013B-A100-Site Plan (4).pdf

    19.15.2.2.3.4 - 14013B-A101-Overall Demo Plan (5).pdf

    19.15.2.2.3.5 - 14013B-A101-Overall Demolition Plan (1).pdf

    19.15.2.2.3.6 - 14013B-A102-Overall Construction Plan (1).pdf

    19.15.2.2.3.7 - 14013B-A102-Overall Construction Plan (5).pdf

    19.15.2.2.3.8 - 14013B-A103-Overall Demolition RCP (1).PDF

    19.15.2.2.3.9 - 14013B-A103-Overall Demolition RCP (5).PDF

    19.15.2.2.3.10 - 14013B-A104-Overall RCP (5).PDF

    19.15.2.2.3.11 - 14013B-A104-Overall Reflected Ceiling (1).pdf

    19.15.2.2.3.12 - 14013B-A201-Enlarged Plans (1).pdf

    19.15.2.2.3.13 - 14013B-A201-Enlarged Plans (5) .pdf

    19.15.2.2.3.14 - 14013B-A202-Enlarged Plans (1).pdf

    19.15.2.2.3.15 - 14013B-A202-Enlarged Plans (7) .pdf

    19.15.2.2.3.16 - 14013B-A203-Enlarged Plans (1).pdf

    19.15.2.2.3.17 - 14013B-A203-Enlarged Plans (4) .pdf

    19.15.2.2.3.18 - 14013B-A204-Enlarged Finish.pdf

    19.15.2.2.3.19 - 14013B-A205-Enlarged Furnit.pdf

    19.15.2.2.3.20 - 14013B-A206-Enlarged Plans .pdf

    19.15.2.2.3.21 - 14013B-A301 IntElevs.pdf

    19.15.2.2.3.22 - 14013B-A301-Sections.pdf

    19.15.2.2.3.23 - 14013B-A302 IntElevs.pdf

Printable Index Page 29 of 46

    19.15.2.2.3.24 - 14013B-A401-Schedules & Details.pdf

    19.15.2.2.3.25 - 14013B-A401-Sections.pdf

    19.15.2.2.3.26 - 14013B-A501 Millwork Plans (5).pdf

    19.15.2.2.3.27 - 14013B-A501 Millwork Plans.pdf

    19.15.2.2.3.28 - 14013B-A502 Millwork Plans (5).pdf

    19.15.2.2.3.29 - 14013B-A502 Millwork Plans.pdf

    19.15.2.2.3.30 - 14013B-A503 Millwork Plans (6).pdf

    19.15.2.2.3.31 - 14013B-A503 Millwork Plans.pdf

    19.15.2.2.3.32 - 14013B-A601-Schedule.pdf

    19.15.2.2.3.33 - 14013B-G000-Cover (July 19, 2014).pdf

    19.15.2.2.3.34 - 14013B-G000-Cover (March 18, 2014).pdf

    19.15.2.2.3.35 - 14013B-G001-General.pdf

    19.15.2.2.3.36 - 14013D-G001-General.pdf

    19.15.2.2.3.37 - 14013-G002.pdf

    19.15.2.2.3.38 - 14013-G003.pdf

    19.15.2.2.3.39 - 34010 Langley Pkg B&D Electrical - BP Issue .pdf

    19.15.2.2.3.40 - 131204 Gateway Langley Phase B M-1.pdf

    19.15.2.2.3.41 - 131204 Gateway Langley Phase B M-2.pdf

    19.15.2.2.3.42 - 131204 Gateway Langley Phase B M-3.pdf

    19.15.2.2.3.43 - 14013 03.18.14 IFBP.PDF

    19.15.2.2.3.44 - 14013 04.30.14 RE-ISSUED FOR CONSTRUCTION (002).pdf

    19.15.2.2.3.45 - 14013 07.24.14 Re-Issued For DP.PDF

    19.15.2.2.3.46 - 14013B-A001-Code Plan (1).pdf

    19.15.2.3 - Atlas Expansion (prelim)

    19.15.2.3.1 - Contracts

    19.15.2.3.1.1 - Fee Proposal-Landscape-Enns Gauthier-Mike Enns.pdf

    19.15.2.3.1.2 - Fee Proposal-Landscape-ETA-Gerry.pdf

    19.15.2.3.1.3 - Fee Proposal-Security-Liahona.pdf

    19.15.2.3.1.4 - Fee Proposal-Structural-RJC-Damien Stoneham.pdf

    19.15.2.3.1.5 - Fee Proposal-Survey-Butler Sundvick [For ROW Registration].pdf

    19.15.2.3.1.6 - Fee Proposal-Survey-Butler Sundvick.pdf

    19.15.2.3.1.7 - Fee Proposal-Survey-McElhanney [For ROW Registration].pdf

    19.15.2.3.1.8 - Fee Proposal-Survey-McElhanney.pdf

    19.15.2.3.1.9 - Invoice Processing Checklist - updated April 7 2016.pdf

Printable Index Page 30 of 46

    19.15.2.3.1.10 - LIAHONA (Security) Atlas CL - PO 2718559 Sep 21 2016.pdf

    19.15.2.3.1.11 - 15049 06-23-2015-Fees.pdf

    19.15.2.3.1.12 - 15049 2016-05-20 Fees - Survey.pdf

    19.15.2.3.1.13 - 15049 2016-11-29 Fee Increase Request.pdf

    19.15.2.3.1.14 -16097_RAF01_LangleyGatewayCasino_MGBA.PDF

    19.15.2.3.1.15 - Civil - Wedler - Proposal - MGBA.PDF

    19.15.2.3.1.16 - Civil - Wedler - Proposal Scope 1-4 - MGBA.PDF

    19.15.2.3.1.17 - Civil - Wedler - Proposal Scope 5-10 - MGBA.PDF

    19.15.2.3.1.18 - CPTED 0309.pdf

    19.15.2.3.1.19 - Fee Proposal-Civil-Wedler.pdf

    19.15.2.3.1.20 - Fee Proposal-Code-GHL.PDF

    19.15.2.3.1.21 - Fee Proposal-Electrical-Gary Rhode.pdf

    19.15.2.3.1.22 - Fee Proposal-Geotechnical-WSP- Off site Pavement Testing.pdf

    19.15.2.3.1.23 - Fee Proposal-Landscape-Durante-Dylan Chernoff.pdf

    19.15.2.3.2 - Permit Information

    19.15.2.3.2.1 - Agent’s Authorization Form.pdf

    19.15.2.3.2.2 - Atlas Addition CPTED Review Report.pdf

    19.15.2.3.2.3 - CPTED Development Checklist .pdf

    19.15.2.3.2.4 - Development_Application - Signed.pdf

    19.15.2.3.2.5 - Development_Application.pdf

    19.15.2.3.2.6 - Gateway Langley-Atlas Addition Spine Option 1.pdf

    19.15.2.3.2.7 - Gateway Langley-Atlas Addition Spine Option 2.pdf

    19.15.2.3.2.8 - Gateway Langley-Atlas Addition Spine Option 3.pdf

    19.15.2.3.2.9 - Langley Atlas-Interdepartmental Review 16.08.26.pdf

    19.15.2.3.2.10 - Sustainability_Checklist GW Langley Atlas (filled in).pdf

    19.15.2.3.2.11 - Sustainability_Checklist GW Langley Atlas.pdf

    19.15.2.3.2.12 - ZONING_BYLAW_2100_-_CONSOLIDATED AS OF NOVEMBER 1 2017.pdf

    19.15.2.3.2.13 - 2017.11.15 15049 - rIFDP.PDF

    19.15.2.3.2.14 - 3956_001 Staff Report.pdf

    19.15.2.3.2.15 - 15049 2016-09-29 Design Rationale.pdf

    19.15.2.3.2.16 - 15049 2017-10-18 Design Rationale.pdf

    19.15.2.3.2.17 - 15049 Langley Atlas CPTED Response.pdf

    19.15.2.3.2.18 - Agent_Authorization_Form GW Langley Atlas.pdf

Printable Index Page 31 of 46

    19.15.2.3.3 - Drawings

    19.15.2.3.3.1 - 2017.11.15 15049 - rIFDP - City Council Presentation.pdf

    19.15.2.3.3.2 - 15049 Gateway Langley Expansion - rIFDP.PDF

    19.15.2.3.3.3 - 17111 Gateway Langley Atlas & Gaming Expansion - rIFDP r1.pdf

    19.15.2.3.3.4 - Gateway Atlas 0G000 Cover IFDP 16.08.26.pdf

    19.15.2.3.3.5 - Gateway Atlas 0G001 Notes IFDP 16.10.04.pdf

    19.15.2.3.3.6 - Gateway Atlas 0SP101 Site-Demo IFDP 16.10.04.pdf

    19.15.2.3.3.7 - Gateway Atlas 0SP102 Site-Prop IFDP 16.10.04.pdf

    19.15.2.3.3.8 - Gateway Atlas A101 Occ Loads IFDP 16.08.26.pdf

    19.15.2.3.3.9 - Gateway Atlas A102 Main Floor-Demo IFDP 16.08.26.pdf

    19.15.2.3.3.10 - Gateway Atlas A103 Main Floor-Prop IFDP 16.10.04.pdf

    19.15.2.3.3.11 - Gateway Atlas A104 Upper Floor-Demo IFDP 16.08.26.pdf

    19.15.2.3.3.12 - Gateway Atlas A105 Upper Floor-Prop IFDP 16.08.26.pdf

    19.15.2.3.3.13 - Gateway Atlas A200 3D Renderings IFDP 16.10.04.pdf

    19.15.2.3.3.14 - Gateway Atlas A201 Exterior Elevations IFDP 16.08.26.pdf

    19.15.2.3.3.15 - Gateway Atlas A202 Exterior Elevations IFDP 16.08.26.pdf

    19.15.2.3.3.16 - Gateway Atlas A203 Exterior Elevations IFDP 16.08.26.pdf

    19.15.2.3.3.17 - Gateway Atlas IFDP 16.10.17.pdf

    19.15.2.3.3.18 - Gateway Atlas L01 IFDP 2016.10.04.pdf

    19.15.2.3.3.19 - Gateway Langley - Atlas Expansion 16.10.04.pdf

    19.15.2.3.3.20 - Gateway Langley - Atlas Expansion 16.10.17.pdf

    19.15.2.3.3.21 - Signage Atlas_Expansion_DP_rev.pdf

    19.15.2.4 - Match Patio Expansion

    19.15.2.4.1 - Contracts

    19.15.2.4.1.1 - 15127 2016-12-14 Fee Increase Request.pdf

    19.15.2.4.1.2 - 15127 2017-02-10 Fee Increase Request.pdf

    19.15.2.4.1.3 - 15127 2017-10-30 EWA O2.pdf

    19.15.2.4.1.4 - 15127 2017-11-20 EWA O3.pdf

    19.15.2.4.1.5 - 15127 Fees - Mechanical.pdf

    19.15.2.4.1.6 - 15127 Fees - Structural.pdf

    19.15.2.4.1.7 - 15127 - Electrical.pdf

    19.15.2.4.1.8 - 15127 2016-05-13 CPTED Fees.pdf

Printable Index Page 32 of 46

    19.15.2.4.1.9 - 15127 2016-05-13 Landscape Fees.pdf

    19.15.2.4.1.10 - 15127 2016-05-18 Fees - Survey.pdf

    19.15.2.4.1.11 - 15127 2016-05-20 Match Patio.pdf

    19.15.2.4.1.12 - 15127 2016-06-23 Match Patio.pdf

    19.15.2.4.2 - Permit Information

    19.15.2.4.2.1 - 15127 CofL 17.01.20.doc

    19.15.2.4.2.2 - 15127 Health Approval.pdf

    19.15.2.4.2.3 - 15127 Langley Form 1.pdf

    19.15.2.4.2.4 - 15127 Langley Form 2 - Proof of Insurance.pdf

    19.15.2.4.2.5 - 15127 Langley Match BP Response.pdf

    19.15.2.4.2.6 - 15127 Match Langley - Application for Health Approval.pdf

    19.15.2.4.2.7 - 15127 Owners Authorization.pdf

    19.15.2.4.2.8 - 15127 Schedule A.PDF

    19.15.2.4.2.9 - 15127 Schedule B.PDF

    19.15.2.4.2.10 - 15127 Signed BP Application.pdf

    19.15.2.4.2.11 - 15127 Sustainability_Checklist GW Langley Match.pdf

    19.15.2.4.2.12 - 16182_20170208_Letter for City_JD.PDF

    19.15.2.4.2.13 - 307715_Health Approval Application_Nov2013.pdf

    19.15.2.4.2.14 - A001.pdf

    19.15.2.4.2.15 - BP Fee Slip.pdf

    19.15.2.4.2.16 - BP001970-Review1.pdf

    19.15.2.4.2.17 - BP001970-Review2.pdf

    19.15.2.4.2.18 - BP001970-Review3.pdf

    19.15.2.4.2.19 - CFSP - 20393 Fraser Highway, Langley, BC -18OCT17.pdf

    19.15.2.4.2.20 - City of Langley Norson Business License.pdf

    19.15.2.4.2.21 - Food Service Establishment Application Package - Rev Octob.pdf

    19.15.2.4.2.22 - GeoTech Letter-Schedules.pdf

    19.15.2.4.2.23 - 4454_001.pdf

    19.15.2.4.2.24 - 4455_001.pdf

    19.15.2.4.2.25 - 4456_001.pdf

    19.15.2.4.2.26 - 4457_001.pdf

    19.15.2.4.2.27 - 13122-CA100-Site Plan A101.pdf

    19.15.2.4.2.28 - 13122-CA103-Demo and Main Floor Plan A103.pdf

    19.15.2.4.2.29 - 13122-CA104-Demo and Roof Plan A203.pdf

Printable Index Page 33 of 46

    19.15.2.4.2.30 - 13122-CA301-Building Sections A301.pdf

    19.15.2.4.2.31 - 15127 Building_Permit Application Langley.pdf

    19.15.2.4.2.32 - 15127 CofL 16.11.17.doc

    19.15.2.4.2.33 - 15127 CofL 16.12.19.doc

    19.15.2.4.2.34 - Applic_for_HealthApproval-revFebruary2012.pdf

     19.15.2.4.3 - Drawings

     19.15.2.4.3.1 - 15127 A601 Details-A603.pdf

    19.15.2.4.3.2 - 15127 A601r1 Cooler Details Re-BP 16.11.09.pdf

    19.15.2.4.3.3 - 15127 ID100-ID200-ID300 ID Set-ID201.pdf

    19.15.2.4.3.4 - 15127 ID100-ID200-ID300 ID Set-ID202.pdf

    19.15.2.4.3.5 - 15127 ID100-ID200-ID300 ID Set-ID203.pdf

    19.15.2.4.3.6 - 15127 ID100-ID200-ID300 ID Set-ID301.pdf

    19.15.2.4.3.7 - 15127 ID100-ID200-ID300 ID Set-ID302.pdf

    19.15.2.4.3.8 - 15127 Match Expansion Re-BP 16.11.09.pdf

    19.15.2.4.3.9 - 20161004_Review_TJV.PDF

    19.15.2.4.3.10 - Gateway Langley Match K01 BP 160915.pdf

    19.15.2.4.3.11 - MGB-31B Elec BP.PDF

    19.15.2.4.3.12 - 8816 GATEWAY LANGLEY - MECH IBP - 2016-09-16.pdf

    19.15.2.4.3.13 - 15127 0G000 Cover IFBP.PDF

    19.15.2.4.3.14 - 15127 0G000 Cover IFC (1).pdf

    19.15.2.4.3.15 - 15127 0G001 General Note IFBP.PDF

    19.15.2.4.3.16 - 15127 0G001 General Notes-0G001-IFC.PDF

    19.15.2.4.3.17 - 15127 0SP101 Site Plan IFBP.PDF

    19.15.2.4.3.18 - 15127 0SP101 Site Plan-A101.pdf

    19.15.2.4.3.19 - 15127 0SP102 Site Plan IFBP.PDF

    19.15.2.4.3.20 - 15127 0SP102 Site Plan Enlarged-A102.pdf

    19.15.2.4.3.21 - 15127 A001-Code Analysis IFBP.PDF

    19.15.2.4.3.22 - 15127 A001-Code Analysis-A001.pdf

    19.15.2.4.3.23 - 15127 A001r2 Code Plan Re-BP 16.11.09.pdf

    19.15.2.4.3.24 - 15127 A002 Specs IFBP.PDF

    19.15.2.4.3.25 - 15127 A003 Specs IFBP.PDF

    19.15.2.4.3.26 - 15127 A004 Specs IFBP.PDF

    19.15.2.4.3.27 - 15127 A004r2 Spec Re-BP 16.11.09.pdf

    19.15.2.4.3.28 - 15127 A101 Edge of Slab Plan IFBP.PDF

    19.15.2.4.3.29 - 15127 A101-A103 Demo & Main Floor Plan-A101.pdf

Printable Index Page 34 of 46

    19.15.2.4.3.30 - 15127 A101-A103 Demo & Main Floor Plan-A103.pdf

    19.15.2.4.3.31 - 15127 A102 Demo Floor Plan IFBP.PDF

    19.15.2.4.3.32 - 15127 A102 Edge of Slab Plan-A102.pdf

    19.15.2.4.3.33 - 15127 A103 Main Floor Plan IFBP.PDF

    19.15.2.4.3.34 - 15127 A103r2 Floor Plan Re-BP 16.11.09.pdf

    19.15.2.4.3.35 - 15127 A104 RCP IFBP.PDF

    19.15.2.4.3.36 - 15127 A104 Roof Plan IFBP.PDF

    19.15.2.4.3.37 - 15127 A104-Demo and Roof Plan-A104.pdf

    19.15.2.4.3.38 - 15127 A105 Demo RCP - A106 RCP-A105.pdf

    19.15.2.4.3.39 - 15127 A105 Demo RCP - A106 RCP-A106.pdf

    19.15.2.4.3.40 - 15127 A107 Enlarged Main Floor Plan - A108 Finish Plan-A107.pdf

    19.15.2.4.3.41 - 15127 A107 Enlarged Main Floor Plan - A108 Finish Plan-A108.pdf

    19.15.2.4.3.42 - 15127 A200 3D Renderings IFBP.PDF

    19.15.2.4.3.43 - 15127 A201 Elevations IFBP.PDF

    19.15.2.4.3.44 - 15127 A201-A203 Elevations-A201.pdf

    19.15.2.4.3.45 - 15127 A201-A203 Elevations-A202.pdf

    19.15.2.4.3.46 - 15127 A201-A203 Elevations-A203.pdf

    19.15.2.4.3.47 - 15127 A202 Elevations IFBP.PDF

    19.15.2.4.3.48 - 15127 A202r2 North Elevation Re-BP 16.11.09.pdf

    19.15.2.4.3.49 - 15127 A203 Elevations IFBP.PDF

    19.15.2.4.3.50 - 15127 A301 Building Sections IFBP.PDF

    19.15.2.4.3.51 - 15127 A301 Building Sections-A301.pdf

    19.15.2.4.3.52 - 15127 A501 Millwork IFBP.PDF

    19.15.2.4.3.53 - 15127 A502 Millwork IFBP.PDF

    19.15.2.4.3.54 - 15127 A601 Details-A601.pdf

    19.15.2.4.3.55 - 15127 A601 Details-A602.pdf

    19.15.2.4.3.56 - 15127 Open Air Patio Plan.pdf

    19.15.2.4.3.57 - 15127 Patio Interior Elevation 2 Elevation 2.pdf

    19.15.2.4.3.58 - 15127 Patio Interior Elevation 2 Elevation.pdf

    19.15.2.4.3.59 - 15127 Patio Interior Elevation.pdf

    19.15.2.4.3.60 - 15127 South Elevation.pdf

    19.15.2.4.3.61 - 15127 West Patio Elevation.pdf

    19.15.2.4.3.62 - 20171106_Issued For Construction_TJV.PDF

    19.15.2.4.3.63 - Gateway Langley Match Kitchen IFC 171106.pdf

Printable Index Page 35 of 46

    19.15.2.4.3.64 - Langley Match Patio Expansion & Kitchen Reno Nov 16.pdf

    19.15.2.4.3.65 - Match Patio Expansion_Landscape IFC_2017_Nov_06.pdf

    19.15.2.4.3.66 - Match Patio Phasing Plan.pdf

    19.15.2.4.3.67 - 2017.11.06 MGB-31B Elec IFC.PDF

    19.15.2.4.3.68 - 8816 GATEWAY LANGLEY - MECH IFC - 2017-11-06.pdf

    19.15.2.4.3.69 - 15127 - Gateway Match Arch. IFC.PDF

    19.15.2.4.3.70 - 15127 - ID Specification.pdf

    19.15.2.4.3.71 - 15127 2017-11-17 Match Patio Page-Turn.pdf

    19.15.2.4.3.72 - 15127 Floor Plan.pdf

    19.15.2.4.3.73 - 15127 Kitchen Plan.pdf

    19.15.2.4.3.74 - 15127 New Enclosure Plan.pdf

    19.15.2.4.3.75 - 15127 North Elevation.pdf

    19.15.2.5 - Chow Restaurant

    19.15.2.5.1 - Contracts

    19.15.2.5.1.1 - 17107 2017-09-22 Gateway Chow Langley.pdf

    19.15.2.5.2 - Drawings

    19.15.2.5.2.1 - 17107 Chow Langley - Coordination.pdf

    19.15.2.6 - Atlas Expansion (in-progress)

    19.15.2.6.1 - Contracts

    19.15.2.6.1.1 - 17111 2017-10-11 Gateway Langley Expansion Architectural Fee.pdf

    19.15.2.6.2 - Drawings

    19.15.2.6.2.1 - GC_Langley_Expansion-27_11_2017.pdf

    19.15.2.7 - As Built Drawings

    19.15.2.7.1 - Cascades Langley As-Built Arch.pdf

    19.15.2.7.2 - Cascades Expansion - Architectural.pdf

    19.15.2.7.3 - Cascades A 2.2 S&N Elev.pdf

    19.15.2.7.4 - Cascades A 0.0 site.pdf

    19.15.2.7.5 - Cascades A 0.1 roof.pdf

    19.15.2.7.6 - Cascades A 1.0R.pdf

    19.15.2.7.7 - Cascades A 1.1RCP.pdf

    19.15.2.7.8 - Cascades A 1.2_FLR.pdf

    19.15.2.7.9 - Cascades A 1.3 data.pdf

    19.15.2.7.10 - Cascades A 2.1West Elev.pdf

    19.15.2.7.11 - Cascades A 3.1 sections A.pdf

Printable Index Page 36 of 46

    19.15.2.7.12 - Cascades A 3.2 sections B.pdf

    19.15.2.7.13 - Cascades A 3.3 Int elev.pdf

    19.15.2.7.14 - Cascades A 3.4 Int elev.pdf

    19.15.2.7.15 - Cascades A 3.5 Int Elev_Dot_.pdf

    19.15.2.7.16 - Cascades A 4.0 canopy.pdf

    19.15.2.7.17 - Cascades A 5.0 cash.pdf

    19.15.2.7.18 - Cascades A 6.0 WC.pdf

    19.15.2.7.19 - 6410E2.00-ASB.pdf

    19.15.2.7.20 - 6410E1.10-ASB.pdf

    19.15.2.7.21 - 6410E1.20-ASB.pdf

    19.15.2.7.22 - 6410E1.30-ASB.pdf

    19.15.2.7.23 - 6410E1.40-ASB.pdf

    19.15.2.7.24 - 6410E2.10-ASB.pdf

    19.15.2.7.25 - 6410E3.00-ASB.pdf

    19.15.2.7.26 - 6410E4.00-ASB.pdf

    19.15.2.7.27 - 6410T1.00-ASB.pdf

    19.15.2.7.28 - 6410T2.00-ASB.pdf

    19.15.2.7.29 - 6410T2.01-ASB.pdf

    19.15.2.7.30 - 6410T3.00-ASB.pdf

    19.15.2.7.31 - Cascades Expansion - Electrical.pdf

    19.15.2.7.32 - 6903P03_GROUND FL Model (1).pdf

    19.15.2.7.33 - 6903M01_GROUND FL Model (1).pdf

    19.15.2.7.34 - 6903M02_ROOF FL Model (1).pdf

    19.15.2.7.35 - 6903M03_SCHEDULE Model (1).pdf

    19.15.2.7.36 - 6903P01_SITE PLAN Model (1).pdf

    19.15.2.7.37 - 6903P02_FOUNDATION Model (1).pdf

    19.15.2.7.38 - 6903P04_ROOF FL Model (1).pdf

    19.15.2.7.39 - 6903P05_BASEMENT & LEVEL 1 FL_EXIST HOTEL Model (1).pdf

    19.15.2.7.40 - 6903P06_LEVEL 3 FL_EXIST CASINO Model (1).pdf

    19.15.2.7.41 - Cascades Expansion - Mechanical.pdf

    19.15.2.7.42 - Cascades Expansion - Structural.pdf

    19.15.2.7.43 - 06528S1.1.pdf

    19.15.2.7.44 - 06528S2.1.pdf

    19.15.2.7.45 - 06528S2.1A.pdf

    19.15.2.7.46 - 06528S3.1.pdf

    19.15.2.7.47 - 06528S4.1.pdf

Printable Index Page 37 of 46

    19.15.2.7.48 - 06528S4.2.pdf

    19.15.2.7.49 - 06528S4.3.pdf

    19.15.2.7.50 - M 3.3.pdf

    19.15.2.7.51 - M 4.1.pdf

    19.15.2.7.52 - M 4.2.pdf

    19.15.2.7.53 - M 4.3.pdf

    19.15.2.7.54 - M 5.1.pdf

    19.15.2.7.55 - M 5.2.pdf

    19.15.2.7.56 - M 5.3.pdf

    19.15.2.7.57 - M 6.1.pdf

    19.15.2.7.58 - M 7.1.pdf

    19.15.2.7.59 - M 8.1A.pdf

    19.15.2.7.60 - M 1.1.pdf

    19.15.2.7.61 - M 2.1.pdf

    19.15.2.7.62 - M 3.1.pdf

    19.15.2.7.63 - M 3.2.pdf

    19.15.2.7.64 - M 8.1B.pdf

    19.15.2.7.65 - M 8.2.pdf

    19.15.2.7.66 - M 8.3.pdf

    19.15.2.7.67 - M 8.4.pdf

    19.15.2.7.68 - M 9.1.pdf

    19.15.2.7.69 - M 10.1.pdf

    19.15.2.7.70 - M 10.2.pdf

    19.15.2.7.71 - M 11.1.pdf

    19.15.2.7.72 - M 12.1.pdf

    19.15.2.7.73 - M 12.2.pdf

    19.15.2.7.74 - M 12.3.pdf

    19.15.2.7.75 - M 13.1.pdf

    19.15.3 - Coast Hotel (Langley)

    19.15.3.1 - Site Photos

    19.15.3.1.1 - Accessible 1.jpg

    19.15.3.1.2 - Accessible 2.jpg

    19.15.3.1.3 - Accessible 3.jpg

    19.15.3.1.4 - Accessible 4.jpg

    19.15.3.1.5 - Accessible 5.jpg

    19.15.3.1.6 - Accessible 6.jpg

    19.15.3.1.7 - Accessible 7.jpg

Printable Index Page 38 of 46

    19.15.3.1.8 - Accessible 8.jpg

    19.15.3.1.9 - Coast existing 3.jpg

    19.15.3.1.10 - Guestroom 1.jpg

    19.15.3.1.11 - Guestroom 2.jpg

    19.15.3.1.12 - Guestroom 3.jpg

    19.15.3.1.13 - Guestroom 4.jpg

    19.15.3.1.14 - Guestroom 5.jpg

    19.15.3.1.15 - Guestroom 6.jpg

    19.15.3.1.16 - Guestroom 7.jpg

    19.15.3.1.17 - Guestroom 8.jpg

    19.15.3.1.18 - Guestroom 9.jpg

    19.15.3.1.19 - Guestroom 10.jpg

    19.15.3.1.20 - Guestroom 11.jpg

    19.15.3.1.21 - Guestroom 15.jpg

    19.15.3.1.22 - Guestroom 16.jpg

    19.15.3.1.23 - Guestroom 17.jpg

    19.15.3.1.24 - Guestroom 18.jpg

    19.15.3.1.25 - Guestroom 19.jpg

    19.15.3.1.26 - Guestroom 20.jpg

    19.15.3.1.27 - Guestroom 21.jpg

    19.15.3.1.28 - Guestroom 22.jpg

    19.15.3.1.29 - Guestroom 23.jpg

    19.15.3.1.30 - Guestroom 24.jpg

    19.15.3.1.31 - Guestroom 25.jpg

    19.15.3.1.32 - Guestroom 26.jpg

    19.15.3.1.33 - Guestroom 27.jpg

    19.15.3.1.34 - Guestroom 28.jpg

    19.15.3.1.35 - Guestroom 29.jpg

    19.15.3.1.36 - Guestroom 30.jpg

    19.15.3.1.37 - Guestroom 31.jpg

    19.15.3.1.38 - Lobby Level Corridor.jpg

    19.15.3.1.39 - Lobby 1.jpg

    19.15.3.1.40 - Lobby 2.jpg

    19.15.3.1.41 - Lobby 3.jpg

    19.15.3.1.42 - Lobby 4.jpg

    19.15.3.1.43 - Lobby 5.jpg

Printable Index Page 39 of 46

    19.15.3.1.44 - Lobby 6.jpg

    19.15.3.1.45 - Lobby 7.jpg

    19.15.3.1.46 - Lobby 8.jpg

    19.15.3.1.47 - Lobby 9.jpg

    19.15.3.1.48 - Lobby 10.jpg

    19.15.3.1.49 - Lobby 11.jpg

    19.15.3.1.50 - Lobby 12.jpg

    19.15.3.1.51 - Lobby 13.jpg

    19.15.3.1.52 - Lobby 14.jpg

    19.15.3.1.53 - Lobby 15.jpg

    19.15.3.1.54 - Lobby 16.jpg

    19.15.3.1.55 - Lobby 17.jpg

    19.15.3.1.56 - Lobby 18.jpg

    19.15.3.1.57 - Lobby 19.jpg

    19.15.3.1.58 - Lobby 20.jpg

    19.15.3.1.59 - Lobby 21.jpg

    19.15.3.1.60 - Lobby 22.jpg

    19.15.3.1.61 - Lobby 23.jpg

    19.15.3.1.62 - Lobby 24.jpg

    19.15.3.1.63 - Lobby 25.jpg

    19.15.3.1.64 - Lobby 26.jpg

    19.15.3.1.65 - Lobby 27.jpg

    19.15.3.1.66 - Lobby 28.jpg

    19.15.3.1.67 - Lobby 29.jpg

    19.15.3.1.68 - Lobby 30.jpg

    19.15.3.1.69 - Lobby 31.jpg

    19.15.3.1.70 - Lobby 32.jpg

    19.15.3.1.71 - Lobby 33.jpg

    19.15.3.1.72 - Lobby 34.jpg

    19.15.3.1.73 - Lobby 35.jpg

    19.15.3.1.74 - Lobby 36.jpg

    19.15.3.1.75 - PreFunction 1.jpg

    19.15.3.1.76 - PreFunction 2.jpg

    19.15.3.1.77 - PreFunction 4.jpg

    19.15.3.1.78 - PreFunction 5.jpg

    19.15.3.1.79 - PreFunction 6.jpg

Printable Index Page 40 of 46

    19.15.3.1.80 - PreFunction 7.jpg

    19.15.3.1.81 - PreFunction 8.jpg

    19.15.3.1.82 - PreFunction 9.jpg

    19.15.3.1.83 - PreFunction 10.jpg

    19.15.3.1.84 - PreFunction 11.jpg

    19.15.3.1.85 - Ballroom 1.jpg

    19.15.3.1.86 - Ballroom 2.jpg

    19.15.3.1.87 - Ballroom 3.jpg

    19.15.3.1.88 - Ballroom 4.jpg

    19.15.3.1.89 - Ballroom 5.jpg

    19.15.3.1.90 - Ballroom 6.jpg

    19.15.3.1.91 - Ballroom 8.jpg

    19.15.3.1.92 - Ballroom 9.jpg

    19.15.3.1.93 - Ballroom 10.jpg

    19.15.3.1.94 - Exec Boardroom.jpg

    19.15.3.1.95 - MeetRm.jpg

    19.15.3.1.96 - MR2.jpg

    19.15.3.1.97 - MR3.jpg

    19.15.3.2 - Guest Rooms FF and E Specs

    19.15.3.2.1 - Coast Hotel Langley FF&E Specs 30Nov2017.pdf

    19.15.3.2.2 - Coast Hotel Langley FF&E Takeoffs.xlsx

    19.15.3.2.3 - Coast Hotel Langley Guestrooms Finishes Schedule.docx

    19.15.3.2.4 - Coast Hotel Langley Guestrooms Finishes.jpg

    19.15.3.3 - Guest Room ID Drawings

    19.15.3.3.1 - Coast Hotel Langley Guestrooms ID Drawings 2017-12-04.pdf

    19.15.3.4 - Public Areas FF and E Specs

    19.15.3.4.1 - WIP Coast Hotel Langley Public Areas FF&E Specs 11Dec2017.pdf

    19.15.3.4.2 - WIP Coast Hotel Langley Public Areas Finishes Schedule.docx

    19.15.3.5 - Public Areas ID Drawings

    19.15.3.5.1 - Coast Hotel Langley Public Areas 2017-12-04 WIP.pdf

    19.15.4 - New Westminster

    19.15.4.1 - Match Restaurant

    19.15.4.1.1 - Contracts

    19.15.4.1.1.1 - p-match restaurant at starlight casino.pdf

Printable Index Page 41 of 46

    19.15.4.1.1.2 - 14029 02-18-2014 Gateway Match Restaurant Starlight New Westminster WDs & CA.pdf

    19.15.4.1.1.3 - 14029-2015-03-23 Extra Work Authorization (EWA01).pdf

    19.15.4.1.2 - Permit Information

    19.15.4.1.2.1 - 14029 2014-07-25 BP 009404.pdf

    19.15.4.1.2.2 - 14029 06.12.14 RE-ISSUED FOR CONSTRUCTION.pdf

    19.15.4.1.3 - Drawings

    19.15.4.1.3.1 - 14029 2014.05.23 Issued for Construction

    19.15.4.1.3.1.1 - 14029 2014.05.22 Issued for Construction.pdf

    19.15.4.1.3.1.2 - 14083 - ISSUED FOR IFC - STRUCTURAL MAY 21 2014.pdf

    19.15.4.1.3.1.3 - 34012 Starlight Reno - Elec IFC Review.pdf

    19.15.4.1.3.1.4 - 14029 2014.05.22 ASME Issued for Construction.pdf

    19.15.4.1.3.1.5 - GAT-5_04_Transmittal_140521.pdf

    19.15.4.1.3.1.6 - 140404 Starlight NWM - M1.pdf

    19.15.4.1.3.1.7 - 140404 Starlight NWM - M2.pdf

    19.15.4.1.3.1.8 - 140404 Starlight NWM - M3.pdf

    19.15.4.1.3.1.9 - 140404 Starlight NWM - M4.pdf

    19.15.4.1.3.1.10 - GAT-5_HW SPEC_IFC_140521.pdf

    19.15.4.1.3.1.11 - GAT-5_LT SPEC_IFC_140521.pdf

    19.15.4.1.3.1.12 - GAT-5_PL SPEC_IFC_140521.pdf

    19.15.4.1.3.1.13 - GAT-5_WA SPEC_IFC_140521.pdf

    19.15.4.1.3.1.14 - GAT-5_FIN SPEC_IFC_140521.pdf

    19.15.4.1.3.1.15 - GAT-5_FURN SPEC_IFC_140521.pdf

    19.15.4.1.3.2 - 14029 2014.10.21 Re-Issued for Building Permit

    19.15.4.1.3.2.1 - 14029 2014.10.21 A202 Floor Plan.pdf

    19.15.4.1.3.3 - 14029 2015.01.23 Issued for LL

    19.15.4.1.3.3.1 - 14029 G012 Liquor Licensing_Revised-G012 (Match).pdf

    19.15.4.1.3.4 - 14029 2015.03.23 Re-Issued for LL

    19.15.4.1.3.4.1 - 14029 G012 2015-03-23 Liquor Licensing_Revised.pdf

    19.15.4.1.3.4.2 - 14029 A101 Site Plan.pdf

    19.15.4.1.3.4.3 - 14029 A102 Floor Plan.pdf

    19.15.4.1.3.5 - 14029 2014.03.19 Issued for Development Permit

    19.15.4.1.3.5.1 - 14029 2014.03.19 Issued for Development Permit Reduced.pdf

Printable Index Page 42 of 46

    19.15.4.1.3.5.2 - 14029 2014.03.19 Issued for Development Permit.pdf

    19.15.4.1.3.6 - 14029 2014.04.28 Issued For BP

    19.15.4.1.3.6.1 - Architectural.pdf

    19.15.4.1.3.6.2 - 14029 2014.04.28 Issued for Building Permit.pdf

    19.15.4.1.3.6.3 - 34012 Starlight elec Issue for BP.pdf

    19.15.4.1.3.6.4 - 140404 Starlight Casino M-1.pdf

    19.15.4.1.3.6.5 - 140404 Starlight Casino M-2.pdf

    19.15.4.1.3.6.6 - 140404 Starlight Casino M-3.pdf

    19.15.4.1.3.6.7 - 140404 Starlight Casino M-4.pdf

    19.15.4.1.3.6.8 - Schedule A&B.pdf

    19.15.4.1.3.6.9 - Application Permit.pdf

    19.15.4.1.3.6.10 - Letter of Authorization.pdf

    19.15.4.1.3.6.11 - Permit Receipt.pdf

    19.15.4.1.3.7 - 14029 2014.05.06 Issued for Health Approval

    19.15.4.1.3.7.1 - OLC drawings.pdf

    19.15.4.1.3.7.2 - 14013 2014.05.06 FH REVIEW.pdf

    19.15.4.1.3.7.3 - 14029-Health.pdf

    19.15.4.1.3.7.4 - Brunch Menu.pdf

    19.15.4.1.3.7.5 - FSP_Manual_-_Cascades_02-12-14.pdf

    19.15.4.1.3.7.6 - FSP_Manual_-_Starlight_06-17-12.pdf

    19.15.4.1.3.7.7 - Kids menu.pdf

    19.15.4.1.3.7.8 - Main menu Match.pdf

    19.15.4.1.3.7.9 - Fraser Health Approval Application.pdf

    19.15.4.2 - The Buffet

    19.15.4.2.1 - Contracts

    19.15.4.2.1.1 - 14048 04-28-2014 Gateway Buffet Finishes Boards Fee Proposal.pdf

    19.15.4.3 - Private Room

    19.15.4.3.1 - Contracts

    19.15.4.3.1.1 - 14105 08-19-2014 Gateway Private Room Architectural Services.pdf

    19.15.4.3.2 - Drawings

    19.15.4.3.2.1 - 34012-B E4 Existing Electrical Plan & Dimmer Diagram.pdf

    19.15.4.3.2.2 - 34012-B E5 Electrical Specifications.pdf

    19.15.4.3.2.3 - GAT-5B_45_Transmittal_141202.pdf

    19.15.4.3.2.4 - GAT-5B_FIN SPEC-IFC_141204.pdf

Printable Index Page 43 of 46

    19.15.4.3.2.5 - GAT-5B_FURN SPEC-IFC_141204.pdf

    19.15.4.3.2.6 - GAT-5B_HW SPEC-IFC_141204.pdf

    19.15.4.3.2.7 - GAT-5B_LT SPEC-IFC_141204.pdf

    19.15.4.3.2.8 - USB Location Electrical Plans.pdf

    19.15.4.3.2.9 - 14104 11.06.14 IFC (002).pdf

    19.15.4.3.2.10 - 14104 11.06.14 IFC R.PDF

    19.15.4.3.2.11 - 14104 2015-03-09 Record Drawings.pdf

    19.15.4.3.2.12 - 14104 A101 Site Plan z e (2) (1).pdf

    19.15.4.3.2.13 - 14104 A301 Details A102 PPV.PDF

    19.15.4.3.2.14 - 14104 A301 Details A301.pdf

    19.15.4.3.2.15 - 14104 IFBP 13-11-14 (002).pdf

    19.15.4.3.2.16 - 14104 IFC 12.19.15 (2).pdf

    19.15.4.3.2.17 - 14104 IFC 12.19.15 DWG.pdf

    19.15.4.3.2.18 - 34012-B E1 Electrical Plans.pdf

    19.15.4.3.2.19 - 34012-B E1 Key Plan & Schedules.pdf

    19.15.4.3.2.20 - 34012-B E2 Lighting Plan.pdf

    19.15.4.3.2.21 - 34012-B E2 Specification & Existing Electrical Plan.pdf

    19.15.4.3.2.22 - 34012-B E3 Power & LT Plan.pdf

    19.15.4.4 - BCLC

    19.15.4.4.1 - Contracts

    19.15.4.4.1.1 - 14105 08-19-2014 Gateway BCLC Betting Room Architectural Service.pdf

    19.15.4.4.1.2 - SBE.34012A FP.PDF

    19.15.4.4.2 - Permit Information

    19.15.4.4.2.1 - Letter of Authorization-oct7.pdf

    19.15.4.4.2.2 - Letter of Authorization.pdf

    19.15.4.4.3 - Drawings

    19.15.4.4.3.1 - GAT-5A_35_Transmittal_141103.pdf

    19.15.4.4.3.2 - GAT-5A_FIN SPEC-IFC_141103.pdf

    19.15.4.4.3.3 - GAT-5A_FURN SPEC-IFC_141103.pdf

    19.15.4.4.3.4 - GAT-5A_LT SPEC-IFC_141103.pdf

    19.15.4.4.3.5 - GAT-5A-IFC_141103.pdf

    19.15.4.5 - Pay-Per-View

    19.15.4.5.1 - Contracts

    19.15.4.5.1.1 - 14105 08-19-2014 Gateway Private Room Architectural Services.pdf

    19.15.4.5.2 - Drawings

Printable Index Page 44 of 46

    19.15.4.5.2.1 - 14104 G001 General Notes G101 General Notes PPV (1).pdf

    19.15.4.5.2.2 - 14163 2014-11-14 IFP.pdf

    19.15.4.5.2.3 - 14163 2014-11-14 Pricing.pdf

    19.15.4.5.2.4 - 14163 2015-03-10 Record Dwg.pdf

    19.15.4.5.2.5 - 14163 A101 Site Plan A101 PPV (1).pdf

    19.15.4.5.2.6 - 14163 A102 Demo and Floor Plan A102 (1).pdf

    19.15.4.5.2.7 - 14163 G000 Cover-Pricing.pdf

    19.15.4.5.2.8 - 34012-B E1 Electrical Plans.pdf

    19.15.4.5.2.9 - 34012-B E2 Specification & Existing Electrical Plan.pdf

    19.15.4.5.2.10 - USB Location Electrical Plans.pdf

    19.15.4.5.2.11 - 14104 11.06.14 IFC R.pdf

    19.15.4.5.2.12 - 14104 11.06.14 IFC.PDF

    19.15.4.5.2.13 - 14104 A101 Site Plan z e (2) (1).pdf

    19.15.4.5.2.14 - 14104 A301 Details A102 PPV.PDF

    19.15.4.5.2.15 - 14104 A301 Details A301.pdf

    19.15.4.5.2.16 - 14104 C001 Code Plan C001 PPV (1).pdf

    19.15.4.5.2.17 - 14104 C002 Code Review C002-PPV (1).pdf

    19.15.4.6 - Smoking Patio

    19.15.4.6.1 - Permit Information

    19.15.4.6.1.1 - 15111-Owners Auth.pdf

    19.15.4.6.2 - Drawings

    19.15.4.6.2.1 - BP and receipt.pdf

    19.15.4.6.2.2 - BP Application Fee Receipt.pdf

    19.15.4.6.2.3 - BP Application Form.pdf

    19.15.4.6.2.4 - DP Application Fee Receipt.pdf

    19.15.4.6.2.5 - Schedule C-A C-B.PDF

    19.15.4.6.2.6 - 01_ScheduleA_effective Dec 19_2014.pdf

    19.15.4.6.2.7 - 01_ScheduleB_effective Dec 19_2014.pdf

    19.15.4.6.2.8 - 15111 Gateway Startlight - Outdoor Shelter.pdf

    19.15.4.6.2.9 - 15111 Letters.pdf

    19.15.4.6.2.10 - 15111 Starlight Casino Smoking Lounge + Bus Shelter.pdf

    19.16 - Third Party Agreements

    19.16.1 - Burnaby

    19.16.1.1 - GV-Starbucks-IN-28 Oct 08.pdf

Printable Index Page 45 of 46

    19.16.1.2 - GV-0870328 and Tropika-Amending Agreement-14 Jan 2011.pdf

    19.16.1.3 - GV-0870328 and Tropika-Lease, IN-6 Jan 10.pdf

    19.16.1.4 - GV-Delta-IN-Dec 7 2006.pdf

    19.16.1.5 - GV-Starbucks-Assignment-14 Jan 2011.pdf

    19.16.1.6 - GV-0870328 and Tropika Fully Executed Lease Extension and Amending Agreement effective Oct. 12, 2017.pdf

    19.16.1.7 - Correspondence (Rogers relocation).pdf

    19.16.1.8 - Revolution Resource (Waste Collection_GVB) 04.20.2015.pdf

    19.16.1.9 - GV-Clearnet-IN-Sept. 97.pdf

    19.16.1.10 - Rogers lease.pdf

    19.16.1.11 - Net-Conex.pdf

    19.16.1.12 - GV-Globalive-IS-July 6 2009.pdf

    19.16.1.13 - SL-Globalive-IN-13 Nov 09.pdf

    19.16.2 - Langley

    19.16.2.1 - Outdated - 20389 Fraser Highway - Langley Health Unit.pdf

    19.16.2.2 - Starbucks Second Amendment (Cascades).pdf

    19.16.2.3 - GHO-Coast Hotels - Franchise Agreement-23 June 2013_redacted.pdf

    19.16.2.4 - GHO-Coast Hotels-Franchise Agreement-Renewal term 5 years-19 Oct 2015.pdf

    19.16.2.5 - GHO-Spa Tru Holdings Inc-Lease Agreement-01 Aug 2016 (expires Jul 31, 2021).pdf

    19.16.3 - New Westminster

    19.16.3.1 - Lease - Kirin.pdf

    19.16.3.2 - SL-IVS Holdings Ltd.-Gift Shop Lease-01-01-2016.pdf

    19.17 - Collective Agreements

    19.17.1 - Grand Villa Surveillance & Unifor (2015-2019).pdf

    19.17.2 - Starlight Casinos (to 2018).pdf

    19.17.3 - Grand Villa Casinos (to 2017).pdf

    19.18 - Credit Agreement

    19.18.1 - 07. Gateway - Credit and Guaranty Agreement (No Schedules or Exhibits).pdf

    19.18.2 - 08. Appendices, Schedules and Exhibits.pdf

    19.19 - Real Property Registrations

    19.19.1 - Pending Form C Burnaby Lease CA6505845.pdf

    19.19.2 - Pending Form C Langley Lease CA6505844.pdf

    19.19.3 - Pending Form C New West Lease CA6505846.pdf

    19.19.4 - Pending Form 17 Change of Name Application CA6505842 (Langley office par_Dot_._Dot_.pdf

Printable Index Page 46 of 46

    19.19.5 - Pending Form A Transfer CA6505843 (Langley office parcel).pdf

SCHEDULE “H”

OFF TITLE SEARCH RESULTS

SEARCHES		DATE OF RESPONSE
1.	BC Assessment Authority	December 8, 2017
	•  Cascades Lands (Langley)
	•  Cascades Casino - #1 – 20393 Fraser Highway
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway
	•  Grand Villa Lands (Burnaby)
	•  Grand Villa Casino / Hotel - 4331 Dominion Street
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street
	•  Starlight Lands (New Westminster)
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)
2.	Real Property Tax Levies	All searches as of December 1, 2017
	•  Cascades Lands (Langley)
	•  Cascades Casino - #1 – 20393 Fraser Highway
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway
	•  Grand Villa Lands (Burnaby)
	•  Grand Villa Casino / Hotel - 4331 Dominion Street
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street

SEARCHES		DATE OF RESPONSE
	•  Starlight Lands (New Westminster)
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)
3.	Zoning and Land Use
	•  Cascades Lands (Langley)	Response outstanding
	•  Cascades Casino - #1 – 20393 Fraser Highway
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway
	•  Grand Villa Lands (Burnaby)
	•  Grand Villa Casino / Hotel - 4331 Dominion Street	Response outstanding
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street
	•  Starlight Lands (New Westminster)
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC	Response outstanding
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)	December 7, 2017
4.	(Contaminated) Site Registry	All searches as of December 1, 2017 with a currency date of November 26, 2017
	•  Cascades Lands (Langley)
	•  Cascades Casino - #1 – 20393 Fraser Highway
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway
	•  Grand Villa Lands (Burnaby)
	•  Grand Villa Casino / Hotel - 4331 Dominion Street
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street

H - 2

SEARCHES		DATE OF RESPONSE
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street
	•  Starlight Lands (New Westminster)
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)
5.	Technical Safety BC (boilers, elevators, electrical, gas)
	•  Cascades Lands (Langley)	December 8, 2017
	•  Cascades Casino - #1 – 20393 Fraser Highway
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway
	•  Grand Villa Lands (Burnaby)
	•  Grand Villa Casino / Hotel - 4331 Dominion Street	December 7, 2017
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street
	•  Starlight Lands (New Westminster)
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC	December 7, 2017
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)
6.	Local Health Authority
	•  Cascades Lands (Langley)
	•  Cascades Casino - #1 – 20393 Fraser Highway	December 11, 2017
	•  Cascades Casino Hotel #2 – 20393 Fraser Highway	December 11, 2017
	•  Office Building next to Cascades Casino/Hotel – 20389 Fraser Highway	December 11, 2017

H - 3

SEARCHES		DATE OF RESPONSE
	•  Grand Villa Lands (Burnaby)	Will not be provided by local health authority for Burnaby location
	•  Grand Villa Casino / Hotel - 4331 Dominion Street
	•  Grand Villa Casino Parking Structure - 4320/4350 Dominion Street
	•  Grand Villa Casino / Parking Lot 4405 Norfolk Street
	•  Starlight Lands (New Westminster	Will not be provided by local health authority for New Westminster location
	•  Star Light Casino - 350 Gifford Street, New Westminster, BC
	•  Vacant Lot Next to Starlight Casino – 3811 Boundary Road, Richmond (straddles New West/Richmond Boundary)

H - 4

SCHEDULE “I”

MASTER LEASE FORM

A M E N D E D    A N D    R E S T A  T E D    L E A S E

B E T W E E N

[●NTD: Purchaser]

(LANDLORD)

[● NTD: : PARTIES TO LEASE TO BE DISCUSSED]

- AND -

[●NTD: NEWCO]

(TENANT)

ADDRESS:

●

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS		1
1.1	Definitions	1
1.1	Schedules	16
ARTICLE 2 DEMISE, EXPANSION OPTION AND TERM		17
2.1	Net Lease	17
2.2	Demise and Expansion Option	17
2.3	Development by Tenant of an Amenity	19
2.4	Development Applications	20
2.5	Options to Extend	21
ARTICLE 3 RENT PROVISIONS		21
3.1	Annual Rent	21
ARTICLE 4 OPERATING PROVISIONS		22
4.1	Use and Operation	22
4.2	Care of Demised Premises	22
4.3	Compliance with Laws	22
ARTICLE 5 TAXES		23
5.1	Taxes Payable by Tenant	23
5.2	Apportionment	24
5.3	Contest Taxes	24
5.4	Utilities and Business Tax	25
5.5	Other Taxes	25
5.6	Sales Taxes	26
ARTICLE 6 REPAIRS AND MAINTENANCE		26
6.1	Repairs and Maintenance	26
6.2	Tenant’s Acknowledgement	29
ARTICLE 7 ALTERATIONS		29
7.1	Alterations	29
7.2	Emergency Alterations	32
7.3	Ownership and Removal	32
7.4	Vacating of Possession	32
ARTICLE 8 TRANSFER/ASSIGNMENT/SUBLEASE		33
8.1	Change of Control	33
8.2	Transfer	33
8.3	Charge of Leasehold Interest	35
8.4	Subleases	35
8.5	Effect of Transfer	36
8.6	Corporate Books	36
8.7	Transfer by way of Sublease	36

- i -

8.8	Transfer by Landlord	36
8.9	Landlord’s Expenses	37
ARTICLE 9 INSURANCE		37
9.1	Tenant’s Insurance	37
9.2	Evidence of Tenant’s Insurance	40
9.3	Cancellation of Insurance	40
9.4	Landlord’s Right to Place Tenant’s Insurance	40
9.5	Subrogation	41
9.6	Insurance Proceeds	41
9.7	Indemnification of Landlord	41
9.8	Indemnification of the Tenant	41
9.9	Mortgages Act	42
9.10	Blanket Policies/Deductibles	42
9.11	Tenant’s Effect On Insurance	42
ARTICLE 10 DESTRUCTION AND DAMAGE		43
10.1	Damage to Demised Premises	43
10.2	Rights and Obligations Respecting Damage to the Demised Premises	43
10.3	Tenant Right to Terminate	43
ARTICLE 11 QUIET ENJOYMENT		44
11.1	Quiet Enjoyment	44
ARTICLE 12 DEFAULT		44
12.1	Default	44
12.2	Allocation	45
12.3	Landlord Repairs	45
12.4	Distress	45
12.5	Condoning	46
12.6	Landlord’s Right to Cure Tenant’s Defaults	46
12.7	Arrears of Rent	46
12.8	Bankruptcy and Insolvency	47
ARTICLE 13 MISCELLANEOUS		47
13.1	Access to Demised Premises	47
13.2	Short Form of Lease	48
13.3	Notices	48
13.4	Liens	49
13.5	Title	49
13.6	Subordination/Non-Disturbance	49
13.7	Estoppel Certificates	50
13.8	Registration and Property Transfer Tax	51
13.9	GST Registration	51
13.10	Expropriation	51
13.11	Overholding	52
13.12	Relationship	52

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13.13	Delays	52
13.14	Captions	53
13.15	Confidentiality	53
13.16	Arbitration	54
13.17	OFAC	56
13.18	Financial Reporting	57
13.19	Financial Covenant	58
13.20	Existing Leases	66
ARTICLE 14 ENVIRONMENTAL MATTERS		66
14.1	Environmental Contaminants	66
14.2	Notification of Environmental Contaminants	67
14.3	Ownership of Environmental Contamination	67
14.4	Environmental Indemnity	68
ARTICLE 15 INTERPRETATION		68
15.1	Governing Law	68
15.2	Time of Essence	68
15.3	Net Lease	68
15.4	Severability	69
15.5	Modifications	69
15.6	Set-Off	69
15.7	Currency	69
15.8	Entire Agreement	69
15.9	Further Assurances	69
15.10	Successors	69
ARTICLE 16 STRATA PROPERTY PROVISIONS		69
16.1	Cascades Lands Strata Lots	70
16.2	Cascades Lands Strata Lots Landlord’s Assignment	70
16.3	Common Property	71
16.4	Strata Fees and Special Levies	71
16.5	Expansion Facility	71
16.6	Repairs and Maintenance	71
16.7	Alterations	72
16.8	Insurance	72
16.9	Destruction and Damage	72
16.10	Paramountcy	73

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SCHEDULES

Schedule “A”	-	Legal Description for Demised Premises
Schedule “B”	-	Fixtures to be Excluded from Leasehold Improvements
Schedule “C”		Major Supplier, Major Customer or Competitor of the Tenant
Schedule “D”	-	Form of Landlord Lender Agreement
Schedule “E”	-	Permitted Encumbrances
Schedule “F”		Alterations
Schedule “G”	-	Form of Subordination/Non-Disturbance Agreement
Schedule “H”	-	Form of Sublease Acknowledgment
Schedule “I”	-	Existing Leases
Schedule “J”	-	Landlord BCLC Agreement
Schedule “K”		Excluded Lands
Schedule “L”		Form of Compliance Certificate

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THIS AMENDED AND RESTATED LEASE made as of the ● day of ●, 2017.

B E T W E E N:

●
(hereinafter called the “Landlord”)
	OF THE FIRST PART
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●
(hereinafter called the “Tenant”)
	OF THE SECOND PART

W I T N E S S E T H:

[ADD: AMENDED AND RESTATED INTRODUCTORY PARAGRAPH.]

ARTICLE 1

DEFINITIONS

1.1 Definitions

In this Lease (including this Article 1 and the Schedules annexed hereto), unless there is something in the context inconsistent therewith, the parties agree that:

“Additional Rent” means any and all sums of money or charges required to be paid by the Tenant to the Landlord (other than any payments in respect of Sales Taxes) in addition to the Annual Rent, including, without limitation the Management Expense Recovery, all of which shall be deemed to accrue on a per diem basis whether or not described as Additional Rent.

“Adjusted EBITDA” has the meaning ascribed thereto in Section 13.18.

“Adjusted Property EBITDA” has the meaning ascribed thereto in Section 13.18.

“Affiliate” of any Person means, at the time this determination is being made, any other Person controlling, controlled by or under common control with such Person in each case, whether directly or indirectly, and “control” and any derivation thereof, means in possession, directly or indirectly, of the powers to direct the management and policies of a Person, whether through the ownership of voting securities or otherwise.

“Alterations” means any repairs, replacements, changes, additions, improvements, decorations or alterations to the Demised Premises installed by the Tenant other than a Tenant Amenity Development.

“Amenity” means a hotel or any other entertainment amenity ancillary to or complementary with the existing operations on the Property, including without limitation, any food and beverage business, spa or liquor store.

“Annual Rent” means the basic annual rent determined in accordance with Section 3.1 hereof.

“Applicable Interest” has the meaning ascribed thereto in Section 12.7.

“Applicable Laws” means all federal, provincial, municipal and local statutes, laws, by-laws, regulations, ordinances and orders, directives and decisions of Governmental Authorities having jurisdiction (in each case having the force of law), including Gaming Laws and Environmental Laws.

“Architect” means any independent, professional architect appointed by the Tenant or the Landlord that the Tenant and the Landlord have each approved, acting reasonably.

“Assumption Agreement” has the meaning ascribed thereto in Section 0;

“BCLC” means British Columbia Lottery Corporation and its successors and assigns.

“Building Standard” means, subject to Gaming Authority Requirements as a minimum, the standard and conditions that the Demised Premises are improved to as at the Lease Commencement Date, or in the case of an Expansion Facility or material Alterations, at the date of construction, in each case, maintained to a standard as would a prudent owner of a property of similar value, age and use, provided that the Building Standard shall be no less than maintaining the Buildings in good working order and in accordance with the requirements of the applicable Hotel Agreements in effect from time to time, and provided that the Tenant shall, at all times be obligated to comply with Article 6.

“Building Systems” include, but are not limited to, all mechanical, electrical, drainage, lighting, heating, ventilation, air-conditioning, security and alarm, plumbing, utilities and other mechanical and electrical systems installed in or used in the operation of the Buildings. [Cascades only: but excludes any Common Property (including any Limited Common Property).][NTD: Here and elsewhere, as concerns Cascade and the specific provisions hereof pertaining thereto and the Strata ownership regime, subject to Landlord’s review of all Strata documents/statutes during the due diligence period.]

“Buildings” mean: (i) all buildings situated on the Cascades Office Building Lands from time to time; and (ii) that part of the building(s) being within the boundaries of the Cascades Lands Strata Lots as determined in accordance with the Strata Property Laws. [● NTD: Cascades only.]

“Buildings” means all buildings and fixed improvements situate on the Lands from time to time, including without limitation, all Building Systems and other Leasehold Improvements. [NTD: Properties other than Cascades]

“Business Day” means any day which is not a Saturday or a Sunday or a statutory holiday in the Province of British Columbia or the State of New York.

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“By-laws” means the by-laws of the Strata Corporation as amended, supplemented or replaced from time to time, together with any rules, regulations, guidelines, directions or resolutions of the Strata Corporation from time to time. [●NTD: Cascades only.]

“Canadian Governmental Authority” means any government, regulatory authority, government department, agency, commission, board, tribunal or court having jurisdiction in Canada or a province or other subdivision thereof or any municipality, district or other subdivision thereof in Canada.

“Canadian Withholding Tax” means any tax or taxes, including any interest and penalties thereon, Charged under Part XIII of the Income Tax Act (Canada) (Tax on Non-Resident’s Income from Canada) or pursuant to Section 105 of the Regulations to the Income Tax Act (Canada).

“Capital Repair Notice” has the meaning ascribed thereto in Section 6.1(e).

“Capital Taxes” means any tax or taxes, including any interest and penalties thereon, Charged upon the Landlord under Part I.3 of the Income Tax Act (Canada) (Tax on Large Corporations), or any similar or successor statute, based upon or computed by reference to the actual or deemed capital, taxable capital, taxable capital employed in Canada, paid-up capital, taxable paid-up capital, taxable paid-up capital employed in Canada, capital stock, members’ contributions, retained earnings, contributed capital or other surplus, reserves, indebtedness or other similar amounts, as such amounts may be determined for purposes thereof, as well as any tax or levy Charged by any Governmental Authority that is similar to, in lieu of, in substitution for any such tax or taxes.

“Cascades Lands Strata Lots” means the lands and premises known municipally as #1-20393 and #2-20393 Fraser Highway, Langley, British Columbia each as more particularly described in Part A-1 and A-2 of 0 hereto. [●NTD: Cascades only.]

“Cascades Lands Strata Lots Landlord’s Assignment” means the assignment dated [●] by the Landlord, as owner of the Cascades Lands Strata Lots1, to the Tenant of (i) pursuant to section 147 of the SPA, all of the Landlord’s powers and duties under the Strata Property Laws, By-laws and rules in connection with the Cascades Lands Strata Lots [will drop exclusion if legal to do so][, excluding the Landlord’s responsibility under Section 131 of the SPA for fines or the costs of remedying a contravention of the By-laws]; and (ii) the Landlord’s voting rights pursuant to section 54 of the SPA. [●NTD: Cascades only.]

“Cascades Office Building Lands” means the lands and premises known municipally as 20389 Fraser Highway, Langley, British Columbia each as more particularly described in Part A-3 of 0 hereto. [●NTD: Cascades only.]

“Change of Control” in respect of Covenantor means the acquisition by any Person, or group of Persons acting jointly or in concert, in one or more than one related transactions, of control (as defined in the definition of Affiliate) or direct or indirect beneficial ownership of more than 50% of the votes attaching to the shares, units or other securities, as applicable (“Voting Interests”),

¹  Note: This would only be “effective” immediately upon the Purchaser acquiring title to the Cascades Lands Strata Lots.

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that ordinarily have voting power for the election of directors (or the governing body or entity performing equivalent functions as directors) of Covenantor, but excludes an acquisition, merger, reorganization, amalgamation, arrangement, combination or other similar transaction (or related transactions), if the holders of Voting Interests in Covenantor representing at least 50% of the voting control or direction immediately prior to such transaction(s) continue to hold Voting Interests in Covenantor representing at least 50% of the voting control or direction in the successor entity; notwithstanding anything else contained herein, an initial public offering, going public transaction, or any trade of capital stock of the Covenantor on any Canadian or United States stock exchange shall not constitute a “Change of Control” in respect of the Covenantor.

“Charged” means levied, confirmed, charged, assessed or imposed.

“Comfort Letter” means a “comfort letter” or similar documents pursuant to which the franchisor or hotel manager, as applicable, under a Hotel Agreement acknowledges and agrees that upon a termination of the Lease, the Landlord may succeed to the interest of the Tenant under such Hotel Agreement, each in a form reasonably acceptable to Landlord and the other parties thereto.

“Common Expenses” has the meaning given to it in the Strata Property Laws. [●NTD: Cascades only.]

“Common Property” has the meaning given to it in the Strata Property Laws, including common property as set out in Strata Plan BCS1615. [●NTD: Cascades only.]

“Cosmetic Alterations” means any Alterations that are solely cosmetic or decorative including, without limitation, painting, carpeting, flooring, light fixtures and other finishes.

“Covenant Agreement” means an agreement dated as of even date herewith by the Covenantor in favour of the Landlord pursuant to which the Covenantor agrees that it is bound by the Tenant’s obligations hereunder, as same may be amended, modified, replaced or restated in accordance with its terms.

“Covenantor” means Gateway Casinos & Entertainment Limited, and any successor or assign permitted hereby.

“Damaged Premises” has the meaning ascribed thereto in Section 10.2.

“Demised Premises” means those lands and premises leased to the Tenant by this Lease, being composed of the Lands and Buildings.

“Disposition” means any sale, transfer, assignment or other disposition (other than the grant of a security interest as collateral for borrowed funds) of any asset or interests therein, including without limitation (i) any assignment or grant of any leasehold interests, licenses or other interests in real property, (ii) any distribution of any asset, dividend of any asset or spin off of any asset and (iii) any issuance of equity interests in any entity whose Adjusted EBITDA is taken into account in computing consolidated Adjusted EBITDA of Original Covenantor; and for the sake of clarity, references to “assets” herein includes, without limitation, tangible and intangible assets, including without limitation, entities in which the Person in question has an equity interest.

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“EBITDA” means earnings before interest, tax, depreciation and amortization, all as defined by and determined, on a consolidated basis with any subsidiaries of the entity in question, in accordance with IFRS.

“Emergency Event” means:

(a) the occurrence of any event that will, or would reasonably be expected to, imminently give rise to material damage to property, harm to human health or loss of human life; or

(b) the issuance of any order under Environmental Laws or other Applicable Laws by a Governmental Authority which order requires immediate action by the Tenant or Landlord.

“Environmental Contaminant” means any contaminant, pollutant, dangerous or potentially dangerous substance, noxious substance, toxic substance, hazardous waste or material, flammable or explosive substance, radioactive material, PCB’s, UFFI, friable materials including asbestos and also includes mold, mildew, microbial growths and associated mycotoxins and any other waste, substance or material whatsoever, the presence of which is regulated pursuant to Environmental Laws.

“Environmental Laws” means all statutes, laws, by-laws, codes, rules, regulations, orders, notices and directives, now or at any time hereafter in effect and having the force of law and applicable to the Demised Premises, regulating or concerning any matter which may be relevant to Environmental Contaminants in connection with the Demised Premises or any part thereof, or the use or occupancy thereof, or the conduct of any business or activity in, on, under or about the Demised Premises or any part thereof.

“Event of Default” means the occurrence of any one of the following:

(a) the Tenant fails to make any payment of Rent or Sales Taxes when due and such default continues for three (3) Business Days after Notice of default that such payment was due;

(b) the Tenant fails to observe or perform any obligation of the Tenant pursuant to this Lease, other than the payment of any Rent or Sales Taxes, or any other specific default addressed in clauses (iii) through (xv) of this definition, and such default continues for thirty (30) days after Notice thereof to the Tenant or such longer period, not to exceed one hundred and eighty (180) days, as may reasonably be required to cure such failure, so long as there is no material adverse effect on the Landlord or the Demised Premises and the Tenant commences to cure such failure within such thirty (30) day period and thereafter continues to cure same in a diligent and timely manner;

- 5 -

(c) the Tenant fails to maintain any insurance which is its obligation to maintain hereunder or any of the Tenant’s insurance policies on the Demised Premises are actually or threatened to be cancelled or adversely changed and the Tenant has not cured such breach or obtained similar insurance coverage in replacement thereof within two (2) Business Days after the Tenant receives notice thereof (or such longer period of time as may be granted by the insurers before implementing an actual cancellation or adverse change);

(d) the Tenant or the Covenantor shall make or permit to occur a Change of Control, Transfer or if the Demised Premises shall be used by any Person or for any purpose, in each case other than in compliance with this Lease;

(e) the Tenant or the Covenantor makes an assignment for the benefit of creditors or becomes bankrupt or insolvent or makes an application for relief from creditors or takes the benefit of any statute for bankrupt or insolvent debtors or makes any proposal or arrangement with creditors, or admits in writing its inability to pay its debts as they come due or steps are taken for the winding up or other termination of the Tenant’s or the Covenantor’s existence or the liquidation of the Tenant’s or Covenantor’s assets;

(f) a trustee, receiver, receiver-manager, or similar person is appointed in respect of the assets or business of the Tenant or the Covenantor;

(g) this Lease or any other property of the Tenant at or on the Demised Premises is at any time seized or taken in any execution which remains unsatisfied for a period of five (5) days or more;

(h) a breach of Section 13.17 occurs;

(i) Covenantor or Tenant fails to maintain all Gaming Authority Requirements necessary for the gaming operations as currently or subsequently conducted at the Demised Premises;

(j) the Landlord BCLC Agreement with respect to the OSA, this Lease and the gaming operations at the Demised Premises terminates or expires and is not, concurrently or prior thereto, replaced by a new Landlord BCLC Agreement on terms and conditions satisfactory to the Landlord, acting reasonably, provided that such new Landlord BCLC Agreement is on terms no less favourable to the Landlord in all material respects as the original Landlord BCLC Agreement;

(k) the OSA with respect to the gaming operations at the Demised Premises terminates or expires; provided, however, it shall not be an Event of Default under this clause (k) if, concurrently or prior to such expiration or termination, both (i) such OSA is replaced by a new OSA on terms and conditions satisfactory to the Landlord, acting reasonably (provided that the Landlord shall be deemed to be satisfied with any OSA that is on the form then used by BCLC generally), and such replacement OSA is for a term that extends at least until the then scheduled end of the Term of this Lease, and (ii) Landlord receives either a new Landlord

- 6 -

BCLC Agreement with respect to such replacement OSA (on terms and conditions satisfactory to the Landlord, acting reasonably, provided that such new Landlord BCLC Agreement is on terms no less favourable to the Landlord in all material respects as the original Landlord BCLC Agreement) or Landlord receives a written acknowledgment (on terms satisfactory to Landlord, acting reasonably) from BCLC, Covenantor and Tenant that such replacement OSA shall constitute the “Tenant OSA” (as defined in the Existing Landlord BCLC Agreement) and that the existing Landlord BCLC Agreement shall continue in full force and effect as to such replacement OSA, this Lease, the Tenant and Covenantor;

(l) the OSA with respect to the gaming operations at the Demised Premises is amended in a manner that is materially adverse to Covenantor (or Tenant), or could reasonably be expected to have a material adverse effect upon Covenantor (or Tenant) or Covenantor’s ability to perform its obligations under the Covenant Agreement or Tenant’s ability to perform its obligations under this Lease;

(m) there is a cessation of all or substantially all of the gaming operations at the Demised Premises (other than as a result of a material casualty, renovations or eminent domain or due to a change in Gaming Law or to Force Majeure), and such cessation continues for more than ten (10) days;

(n) there is a cessation of all or substantially all of the hotel operations at any hotel on the Property (other than as a result of a material casualty, renovations or eminent domain or due to a change in Gaming Law or to Force Majeure), and such cessation continues for more than ten (10) days;

(o) any required financial reporting under this Lease by Tenant or Covenantor is not delivered to Landlord on time, and such default continues uncured for more than ten (10) Business Days after Notice thereof, or such longer period as is reasonable in order to cure such default, provided that the Tenant is pursuing such cure;

(p) a breach of Section 13.19 is determined to have occurred with respect to an applicable period as a result of a Change of Control or a Transfer (or any related transactions, such as financing transactions, entered into in connection therewith); or

(q) a breach of Section 13.19 is determined to have occurred other than as described in clause (p) above in this definition of Event of Default; provided, however, such breach shall not be an Event of Default if either (i) Tenant, Covenantor and their Affiliates take such actions as may be required so that no later than ten (10) Business Days after the date (the “Financial Reporting Date”) the financial reporting is due under this Lease pursuant to Section 13.18 with respect to the last Fiscal Quarter of the four (4) consecutive Fiscal Quarter period with respect to which the Financial Covenant has been breached, the Financial Covenant with respect to such Fiscal Quarter would have been satisfied had such actions been taken on the first day of such Fiscal Quarter, or (ii) no later than the end of said ten (10) Business Day period, Tenant has presented a reasonably detailed plan of

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correction (that is, a plan which if it had been fully implemented on the first day of the Fiscal Quarter in which such breach has occurred, the Financial Covenant with respect to such Fiscal Quarter would have been satisfied) that is reasonably acceptable to Landlord, and Tenant causes such plan to be diligently pursued to completion no later than sixty (60) days after the Financial Reporting Period; and in either event of clauses (i) or (ii), Tenant provides Landlord with all financial reporting reasonably requested by Landlord to evidence that, taking into account the actual actions taken to cure such breach, the Financial Covenant with respect to the Fiscal Quarter in question would have been satisfied had such actions been taken on the first day of the Fiscal Quarter; provided, further however, that Tenant’s right to cure a breach of Section 13.19 pursuant to either clauses (i) or (ii) shall not apply to a breach of Section 13.19 (x) as to any two (2) consecutive Fiscal Quarters (unless and except only two (2) consecutive Fiscal Quarters where Tenant cures the breach as provided in clause (ii) hereof, but such cure is not effectuated soon enough to prevent the breach during the second consecutive Fiscal Quarter, and such cure, if it had been fully implemented on the first day of such second consecutive Fiscal Quarter, the Financial Covenant with respect to such Fiscal Quarter would have been satisfied), (y) with respect to more than two (2) Fiscal Quarters in any twenty four (24) consecutive month period, or (z) with respect to more than four (4) Fiscal Quarters during the initial Term of this Lease or during any extension Term pursuant to Section 2.5 of this Lease;

(r) any Disposition by any of the Original Covenantor Group results in the Pro Forma Adjusted EBITDA of Original Covenantor, when determined with respect to the trailing four (4) Fiscal Quarters (taken as a single period) ending with the last full Fiscal Quarter then ended immediately prior to the Disposition, being less than $125,000,000 CDN; or

(s) any Disposition by Original Covenantor Group, if the consolidated Adjusted EBITDA of Original Covenantor, when determined with respect to the trailing four (4) Fiscal Quarters (taken as a single period) ending with the last full Fiscal Quarter then ended immediately prior to the Disposition, is less than or equal to $125,000,000 CDN, and the Disposition results in the Pro Forma Adjusted EBITDA of Original Covenantor with respect to the trailing four (4) Fiscal Quarters (taken as a single period) ending with the last full Fiscal Quarter then ended immediately prior to the Disposition, being reduced from what it would have been if such Disposition had not occurred.

“Excluded Lands” means the lands legally described in Schedule “K”.

“Existing Leases” has the meaning ascribed thereto in Section 13.9.

“Expansion Facility” means one or more additions to, or extensions or enlargements of, any existing Buildings on the Lands including, without limitation, ancillary improvements and build-outs of or on existing Buildings, but shall not include any of the foregoing which are only

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tangentially connected to a Building, such as, for illustration purposes, a skywalk or a bridge if no material leasable area is included therein and no gaming operations are conducted thereon; and for the sake of clarity, Expansion Facility shall not include a new Building, even if such new Building is physically connected to an existing Building.

“Expropriation” and “Expropriated” means any taking, expropriation, confiscation, seizure, requisition or sale of the use, access, occupancy, easement rights or title to the Demised Premises or any part thereof, wholly or partially (temporarily or permanently), by or on account of any actual eminent domain proceeding or other taking of action by any Person having the power of eminent domain, including an action by a Governmental Authority to change the grade of, or widen the streets adjacent to, the Demised Premises, or alter the pedestrian or vehicular traffic flow to the Demised Premises so as to result in a change in access to such Demised Premises.

“Financial Covenant” has the meaning ascribed thereto in Section 13.19.

“fiscal year” means a fiscal year of the Tenant and/or, as applicable, any other Person.

“Force Majeure” means acts of God, extraordinary weather conditions, strikes, lockouts or labor disputes, inability to obtain adequate supply of materials, fuel, water, electricity or other supplies after exercising reasonable diligence to obtain the same, or other conditions, matters or events not within the control of Tenant or Covenantor or their Affiliates and not attributable to the acts or omissions of Tenant or Covenantor or their Affiliates; provided, however, lack of funds shall not constitute Force Majeure.

“Freehold Mortgage” means any bona fide Mortgage granted by the Landlord to a Freehold Mortgagee.

“Freehold Mortgagee” means any bank, trust company, loan company, insurance company, pension fund or other Person holding a Freehold Mortgage from time to time.

“Gaming Authority” means any Governmental Authority (including crown corporations), with regulatory, licensing or permitting authority or jurisdiction over any Gaming Facility (including the BCLC and GPEB).

“Gaming Authority Requirements” means requirements, approvals, and consents lawfully required by any Gaming Authority or any Gaming Law.

“Gaming Facility” means any gaming or pari-mutuel wagering establishment, including any casino, and other property or assets related, ancillary or complementary thereto located at the Demised Premises.

“Gaming Law” means all applicable provisions of all: (a) constitutions, treaties, statutes or laws governing Gaming Facilities and rules, regulations, codes and ordinances of Gaming Authorities and all administrative or judicial orders or decrees or other laws pursuant to which any Gaming Authority possesses regulatory, licensing or permitting authority over gambling, gaming or Gaming Facility activities conducted at the Demised Premises, including without limitation, the GCA; and (b) orders, decisions, determinations, judgments, awards, decrees, approvals, consents and waivers of any Gaming Authority.

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“Governmental Authority” means any government, regulatory authority, government department, agency, commission, board, tribunal or court having jurisdiction on behalf of any nation, province or state or other subdivision thereof or any municipality, district or other subdivision thereof.

“GCA” means the Gaming Control Act, SBC 2002 Chapter 14.

“GPEB” means Gaming Policy and Enforcement Branch, a division of British Columbia Ministry of Attorney General and its successors and assigns.

“Gross Negligence” means a conscious and voluntary act or omission which exhibits an entire want of care and a conscious indifference to the rights and welfare of affected persons, reflecting a manifestly smaller amount of watchfulness and circumspection than the circumstances require of a person of ordinary prudence.

“GST” means the goods and services tax, including any interest and penalties thereon, imposed under Part IX of the Excise Tax Act (Canada).

“Hotel Agreement” means, [the hotel management agreement dated December 7, 2006 between Delta Hotels Limited, as operator, and Gateway Casinos Limited Partnership, as owner, as amended and assigned from time to time] [insert for Grand Villa property] OR [the franchise agreement dated June 23, 2013 between Coast Hotels Limited and Gateway Casinos & Entertainment Limited, as renewed by letter agreement dated October 19, 2015, as amended and assigned from time to time] [insert for Cascades property], [●NTD: appropriate agreement to be referenced] or a subsequent sublease, management agreement, franchise agreement or license agreement entered into with respect to the portion of the Demised Premises being operated as a hotel, which subsequent sublease or agreement (i) is not with an Affiliate of Tenant or Covenantor, (ii) is on commercially reasonable terms as determined by Covenantor in good faith, (iii) is acceptable in form and substance to BCLC (to the extent BCLC has a right to approve such agreement pursuant to the OSA or Applicable Laws or otherwise), and (iv) is reasonably acceptable in form and substance to Landlord.

“IFRS” means International Financial Reporting Standards in effect from time to time, as adopted by the Canadian Accounting Standards Board of the Canadian Institute of Chartered Accountants or any successor institute.

“Insolvency Proceedings” has the meaning ascribed thereto in Section 12.8.

“Landlord BCLC Agreement” means a written agreement among Covenantor, Landlord and BCLC, in the form attached hereto as Schedule “J”.

“Landlord Lender Agreement” means, as may be applicable, an agreement between the Landlord, the Tenant and the Mortgagee of the Tenant’s leasehold interest substantially in the form attached hereto as Schedule “D” or such other form as the Leasehold Mortgagee and the Landlord may agree to, each acting reasonably, provided however it will not be unreasonable for Landlord to refuse to enter into a form which requires it to have materially increased obligations or liabilities or materially decreased rights or benefits.

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“Landlord Parties” means the Landlord and its Mortgagee, as well as their respective servants, agents, employees, contractors, invitees, licensees or other Persons for whom the Landlord is responsible for in law, but excludes the Tenant Parties.

“Lands” means the lands legally described in Schedule “A”. [NTD: Starlight only]

“Lands” means the lands legally described in Schedule “A”, [which lands, for greater certainty, do not include the Excluded Lands.] [●NTD: Grand Villa only.]

“Lands” means collectively the Cascades Lands Strata Lots and the Cascade Office Building Lands. [●NTD: Cascades only.]

“Lease”, “hereof”, “herein”, “hereunder” and similar expressions mean or refer to this Lease and all Schedules annexed hereto.

“Lease Commencement Date” means ●.

“Lease Year” means a period of time, the first Lease Year commencing on the Lease Commencement Date and ending on the day preceding the first anniversary of the Lease Commencement Date; provided, if the Lease Commencement Date is not the first day of a calendar month, then the first Lease Year shall end on the last day of the twelfth (12th) full calendar month thereafter; and subsequent Lease Years shall consist of consecutive periods of twelve (12) calendar months. The last Lease Year of the Term shall terminate upon the expiration or earlier termination of this Lease as the case may be.

“Leasehold Improvements” means all Building Systems, fixtures (but not, for greater certainty, those fixtures described in 0), installations, improvements and additions from time to time made or installed, in or about the Demised Premises by or on behalf of the Tenant (including any of the foregoing in existence on the Lease Commencement Date). “Leasehold Improvements” shall not include free-standing furniture and partitions and equipment not in any way permanently connected to the Demised Premises or to any Building Systems.

“Leasehold Mortgage” means any bona fide Mortgage granted by the Tenant to a Person not an Affiliate of Tenant or Covenantor.

“Limited Common Property” has the meaning given to it in the Strata Property Laws. [●NTD: Cascades only.]

“Major Alterations” means any Alteration, other than a Cosmetic Alteration, costing Five Million Dollars ($5,000,000) or more in the aggregate to complete.

“Management Expense Recovery” means an amount equal to one (1%) percent of the Annual Rent payable in such calendar year.

“MCOSA” means the amended and restated multiple casino operational services agreement dated June 10, 2009 between British Columbia Lottery Corporation and Gateway Casinos & Entertainment Inc., as amended and assigned to Gateway Casinos & Entertainment Limited by an assignment, amendment and consent dated September 14, 2010, as amended by a letter agreement dated May 4, 2015, [as further amended by a letter agreement dated ●, 2017,] as further amended, extended, renewed and assigned from time to time.

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“Mortgage” means any mortgage, security interest, lien, hypothec, encumbrance or charge securing the indebtedness or obligations of a Party and affecting, in the case of the Landlord, the Demised Premises or any part thereof and, in the case of the Tenant, the Tenant’s interest in the Lease and includes all renewals, extensions, modifications and replacements thereof from time to time.

“Mortgagee” means the holder of any Mortgage.

“Net Worth” when applied to: (i) a corporation formed under the laws of Canada or a province thereof, means shareholders equity as determined in accordance with IFRS, and as based on its financial statements and, if required, other appropriate data; (ii) a pension fund, means the current market value of the assets of the pension fund, net of all other liabilities thereof (other than present or future liabilities to the beneficiaries of the pension fund), all as determined by the actuary or the trustee of the pension fund on the basis of its financial statements and, if required, other appropriate data; and (iii) any other Person, means the current market value of the assets of such Person, net of all liabilities of such Person (in Canada or elsewhere), all as determined on the basis of its financial statements, and if required by Landlord, other appropriate data; provided, however, in each case under clauses (i), (ii) or (iii) of this definition, there shall be excluded from any such calculation any amount for goodwill.

“Notice” means a notice or other instrument to be given under this Lease, all of which shall be in writing and delivered in accordance with Section 13.3.

“OFAC” has the meaning ascribed thereto in Section 13.7.

“Order” has the meaning ascribed thereto in Section 13.17.

“Orders” has the meaning ascribed thereto in Section 13.17.

“Original Covenantor” means the Tenant and Covenantor originally named hereunder as at the Commencement Date, as well any successors or assigns, from time to time, of such original Covenantor that result from any Change of Control.

“Original Covenantor Group” means the Original Covenantor (and any other Person whose EBITDA would be taken into account in the calculation of the Pro Forma Adjusted EBITDA of the Original Covenantor for the period being tested), until such time, if ever, as such Original Covenantor is released from its ongoing obligations and liabilities under the Covenant Agreement and this Lease pursuant to Section 8.2 hereof; provided, Original Covenantor Group expressly excludes any Transferee(s) and their successors and assigns hereunder (except Transferee(s) resulting from a Change of Control). For greater certainty, if the Original Covenantor has not been released from its ongoing obligations and liabilities under the Covenant Agreement and this Lease pursuant to Section 8.2 hereof, then notwithstanding the occurrence of a Transfer, it shall still be an Event of Default under this Lease if the circumstances described in clause (r) or in clause (s) of the definition of Event of Default occur in respect of the Original Covenantor Group.

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“OSA” means (i) the MCOSA, [(ii) specify the replacement agreement which will be entered into before signing, but with a commencement date in the spring of 2018], and (iii) any replacement operational services agreement between British Columbia Lottery Corporation and the Tenant or Covenantor in respect of services pertaining to the conduct, management and operation of gaming at the Property; in each case as the same may be amended, supplemented, restated or modified from time to time, but only to the extent permitted under this Lease.

“Party” means any party to this Lease and “Parties” means all of the parties to this Lease.

“Permitted Covenantor Successor or Assign” means a Person that has (i) either (x) a Net Worth of not less than $400,000,000 CDN or (y) not less than $1,000,000,000 CDN of revenue for the then most recent twelve (12) calendar months then ended (determined in accordance with IFRS or U.S. generally accepted accounting principles), and (ii) EBITDA for the then most recent twelve (12) calendar months then ended of not less than $150,000,000 CDN; measured immediately following the transaction (or substantially concurrent transactions) by which such Person became a successor or assign of the Covenantor or Tenant.

“Permitted Encumbrance” means any encumbrances registered against the Demised Premises or otherwise affecting the Demised Premises as of the Lease Commencement Date, to the extent set forth on Landlord’s policy of title insurance with coverage effective as of the date hereof and any Permitted Encumbrances created after the Commencement Date that are described in 0, and any Leasehold Mortgage entered into in compliance with this Lease.

“Person” means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, government, government regulatory authority, governmental department, agency, commission, board, tribunal, dispute settlement panel or body, bureau, court, and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representative.

“Prime Rate” has the meaning provided in Section 12.7.

“Pro Forma Adjusted EBITDA” means the consolidated Adjusted EBITDA of Original Covenantor for four (4) trailing Fiscal Quarters (taken as a single period), computed on a pro forma basis as though the Disposition or Dispositions in question (and all other Dispositions that have occurred during or after such four (4) Fiscal Quarter period at the time of determination) had occurred immediately prior to the first day of such four (4) Fiscal Quarter period

“Prohibited Excess Lands Use” means:

Adult entertainment

Competitive gaming (excluding lottery)

Pubs and night clubs

Free standing restaurants

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Clean needle injection sites

Pay day loans/check cashing sites

Pawn shops

Private personal care services (excluding those performed in a medical facility, day-care facility or seniors care facility)

Gas station

Automobile Dealerships

“Rent” means Additional Rent and Annual Rent as set out herein.

“Sales Taxes” means all business transfer, multi-stage sales, sales, use, consumption, value-added or other similar taxes Charged by any Canadian Governmental Authority upon the Landlord, the Tenant, or in respect of this Lease, or the payments made by the Tenant hereunder or the goods and services provided by the Landlord hereunder, including the rental of the Demised Premises and the provision of administrative services to the Tenant hereunder, including without limitation, GST on or in respect of any such amounts.

“Services” includes sanitary and storm sewers, water, hydro, gas, electricity, cable, internet, heat, telecommunications and other services supplied to or benefiting the Demised Premises.

“SPA” means the Strata Property Act, S.B.C. 1998, c.43. [NTD: Cascades only]

“Special Levy” means any special levy duly approved and assessed by the Strata Corporation in accordance with Strata Property Laws. [●NTD: Cascades only.]

“Strata Corporation” means The Owners, Strata Plan BCS1615. [●NTD: Cascades only.]

“Strata Fees” means the strata fees to be paid by the Landlord, as owner of the Cascades Lands Strata Lots, to the Strata Corporation as the Landlord’s share of the annual approved budget, as determined by the Strata Corporation in accordance with Strata Property Laws and the Bylaws. [●NTD: Cascades only.]

“Strata Property Laws” means the SPA and any and all regulations promulgated thereunder, all as amended, supplemented, or substituted from time to time. [●NTD: Cascades only.]

“Structural Alterations” means Alterations which affect or might materially affect: (i) the structure of the Demised Premises including the structural components of the roof; or (ii) the support for the Building; or (iii) any Building System or any equipment, conduit, pipe or other means by which the Services are delivered to the Building.

“Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary

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voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, controlled or held, or (b) which is, at the time any determination is made, otherwise controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Taxes” means all taxes, rates, duties, levies, fees, charges, local improvement rates, commercial concentration taxes, levies and assessments including penalties for late payment whatever Charged by any Canadian Governmental Authority against or in respect of the Demised Premises or any part thereof or against the Landlord in respect of any of the same or in respect of any rental or other compensation receivable by the Landlord in respect of the same, and including all taxes which may be Charged by any Canadian Governmental Authority upon the Landlord or the Demised Premises in lieu of or in addition to the foregoing including, without limitation, any taxes on real property rents or receipts as such, any taxes based in whole or in part on the value of the Demised Premises and any license fee measured by rents or other charges payable by occupants of space in the Demised Premises, but in any event excluding (a) any net income tax or Capital Taxes unless levied in lieu of any of the foregoing, and (b) Canadian Withholding Tax.

“Tenant Amenity Development” has the meaning ascribed thereto in Section 2.3.

“Tenant Parties” means Tenant, Covenantor, any sublessee or other occupant of any portion of the Demised Premises, as well as any of their respective servants, agents, employees, contractors, invitees, licensees or other Persons for whom Tenant, Covenantor or any such sublessee or occupant are responsible for in law.

“Tenant’s Trade Fixtures” means the Tenant’s trade fixtures (other than those forming part of the fire safety systems (unless expressly included in Schedule “B”)), that are not permanently connected to the Building Systems (unless expressly included in Schedule “B”) and other related equipment installed in the Building by or on behalf of the Tenant from time to time.

“Term” means the initial twenty (20) year term of this Lease, together with all extensions, as set out in Section 2.5 hereof, that have been exercised, unless sooner terminated in accordance with this Lease.

“Transfer” means (i) any assignment, sale, transfer or other disposition of any portion of the Tenant’s or Covenantor’s interest in this Lease, the Demised Premises or the Covenantor Agreement, as applicable, excluding by way of security or a Mortgage (but including any foreclosure thereof), (ii) any issuance or any sale, transfer or other disposition of any equity interests in Tenant, and in either event described in clause (i) or (ii), the Covenantor no longer controls (as such term is defined in the definition of Affiliate) the Tenant under this Lease following such transaction(s) or the Covenantor no longer owns, directly or indirectly, at least fifty percent (50%) of the issued and outstanding equity interests of Tenant under this Lease following such transaction(s), (iii) any sublease or license of any area of the Demised Premises used or to be used for gaming operations or (iv) any sublease or license of all or substantially all of the Tenant’s interest in the Lease or the Demised Premises; a party making a Transfer is referred to as a “Transferor” and a party taking or receiving a Transfer is referred to as a “Transferee”. “Transfer” does not include a Change of Control generally, but it does include any

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circumstance where the Covenantor no longer controls (as such term is defined in the definition of Affiliate) the Tenant or no longer owns, directly or indirectly, at least fifty percent (50%) of the issued and outstanding equity interests of the Tenant under this Lease following such transaction(s) (and in such circumstances, the “Transferee” shall mean an entity (and it shall be a condition to permit any such Transfer that there be such an entity) that owns, directly or indirectly, more than fifty (50%) of the issued and outstanding equity interests of the Tenant under this Lease following such transaction(s) and controls (as such term is defined in the definition of Affiliate) the Tenant under this Lease following such transaction(s).

“Unavoidable Delay” means any delay in the performance of an act (except for the obligation to pay Rent or Additional Rent or any other moneys hereunder) or compliance with a covenant caused by fire, strike, lockout, union or labor difficulties or negotiations, inability to procure material, restrictive laws or governmental regulations or any act of God or other cause of any kind beyond the reasonable control of the party obliged to perform or comply, excepting a delay caused by insolvency, lack of funds or other financial reason or through the negligence of the party obliged to perform or comply.

“untenantable” has the meaning ascribed thereto in Section 10.3.

“Utilities” has the meaning ascribed thereto in Section 5.4.

1.1 Schedules

The Schedules to this Lease comprise part hereof and are identified as follows:

Schedule “A”	-	Legal Description for Demised Premises
Schedule “B”	-	Fixtures to be Excluded from Leasehold Improvements
Schedule “C”		Major Supplier, Major Customer or Competitor of the Tenant
Schedule “D”	-	Form of Landlord Lender Agreement
Schedule “E”	-	Permitted Encumbrances
Schedule “F”		Alterations
Schedule “G”	-	Form of Subordination/Non-Disturbance Agreement
Schedule “H”	-	Form of Sublease Acknowledgment
Schedule “I”	-	Existing Leases
Schedule “J”	-	Landlord BCLC Agreement
Schedule “K”		Excluded Lands
Error!		Error! Reference source not found.
Reference
source not
found.

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ARTICLE 2

DEMISE, EXPANSION OPTION AND TERM

2.1 Net Lease

It is the intent of the Parties hereto that this Lease be absolutely net to the Landlord and the Landlord shall not be responsible for any expense, charge, payment, cost, claim, liability or obligation of any kind whatsoever in respect of the Demised Premises, except as herein expressly provided. Except as herein expressly provided, the Tenant will pay all charges, Taxes, impositions, costs and expenses of every kind relative to the Demised Premises, and the Tenant covenants with the Landlord accordingly. Notwithstanding the foregoing, the Landlord shall be responsible for and the Tenant shall have no obligation to pay:

(a) compensation, wages, benefits, workers’ compensation insurance premiums and payroll taxes for employees of the Landlord or for officers, directors or partners of the Landlord, or any other overhead expenses of the Landlord;

(b) costs or expenses incurred by the Landlord with respect to the acquisition or any transfer of the Lands (other than as expressly provided herein with respect to this Lease);

(c) the amount of any GST paid or payable by the Landlord, to the extent the Landlord is otherwise entitled to a credit in determining the Landlord’s net tax liability or refund on account of GST;

(d) any payments under or costs relating to any Freehold Mortgage;

(e) any Capital Tax;

(f) corporate, income, profits, excess profits or other taxes assessed upon the net income of the Landlord or any of its shareholders, partners, members or unit holders, including any Canadian Withholding Tax (but excluding, for the avoidance of doubt, any Taxes as defined herein); or

(g) any amount in respect of those matters which are expressly the responsibility of the Landlord pursuant to the terms of this Lease.

2.2 Demise and Expansion Option

(a) The Landlord hereby demises and leases unto the Tenant for the Term, subject to the rights of tenants under Existing Leases, the Demised Premises, to have and to hold. [NTD: For the Cascades Lands Strata Lots, the parking currently appears to be either Common Property or Limited Common Property – see, for instance, By-laws and references to “Parking Facility”, “Parking Facility LCP’’ and Section 24 of no. BB596853 (Form 1 Amendment to Bylaws Strata Plan BCS1615) dealing with “Parking Facilities”.] [●NTD: Cascades only: For the purposes of this Lease, the Demised Premises excludes the Common Property and the Limited Common Property.] [For Grand Villa only: For greater certainty, the Demised Premises do not include the Excluded Lands]

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(b) Subject to compliance by the Tenant with the provisions of Section 7.1 [● and Article 16], the Tenant shall be permitted to construct one or more Expansion Facilities at any time provided that: (i) an Event of Default has not occurred that is continuing; and (ii) such Expansion Facility shall, once completed, not reduce the value or impair the use or operation of the Demised Premises. For the sake of clarity, any Expansion Facility shall be part of the Demised Premises and subject to the terms of this Lease in all respects.

(c) The Expansion Facility shall be of an area, dimensions and design designated by the Tenant, with the design to be approved by the Landlord, in accordance with Section 7.1, provided that the area and dimensions shall comply (subject to obtaining such rezoning, minor variances or site plan approvals to do so) with the applicable zoning, coverage and other Governmental Authority laws, rules and regulations. The Expansion Facility shall be constructed by the Tenant at the Tenant’s sole cost and expense and shall be of a design, construction, quality and appearance to be compatible, complimentary and aesthetically similar to the building and improvements then constructed on the Demised Premises and shall include Leasehold Improvements similar to and/or of a similar value to the Leasehold Improvements then in the Demised Premises.

(d) The Landlord and Tenant shall co-operate to finalize detailed plans and specifications for the Expansion Facility within twenty (20) Business Days after receiving draft plans and specifications from the Tenant. The Landlord and Tenant shall agree to co-operate respecting amendments and revisions to the plans and specifications made at the request of the Tenant, within a time frame of approximately five (5) days after the particular requests of the Tenant, or such longer period as may be necessary taking into consideration the scope of the amendments and revisions requested.

(e) The Tenant shall, prior to the commencement of construction of any Expansion Facility, furnish to the Landlord at the Tenant’s expense such evidence as reasonably required by the Landlord of the projected cost of such Expansion Facility and Tenant’s ability to pay therefor on a timely basis. For greater certainty, the Landlord shall be determined to be acting reasonably where it requests evidence as required by its lender.    

(f) The Tenant shall be responsible for satisfying all Gaming Authority Requirements and for complying with any applicable Hotel Agreement in connection with the development of any Expansion Facility.

(g) The Tenant shall pay all reasonable out of pocket costs and expenses of the Landlord and of its lenders in connection with development of any Expansion Facility, including reasonable legal costs.

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2.3 Development by Tenant of an Amenity

The Tenant shall have the right, from time to time, to send written Notice to the Landlord that it intends to develop, or to permit another Person (including any subtenant) to develop, one or more new buildings within the boundaries of the Lands to be used for an Amenity, and/or demolish and/or redevelop and rebuild all or any existing structures within the Lands in connection therewith (that is not an Expansion Facility) (the “Tenant Amenity Development”), provided that:

(a) upon substantial completion of the Tenant Amenity Development, the Tenant shall pay, or cause to be paid to the Landlord, an administrative fee equal to Five Dollars ($5.00) per square foot of any new Building constituting a Tenant Amenity Development, provided that no such fee shall be payable in respect of any portion of the Tenant Amenity Development that is used as a parking structure:    

(b) the Tenant shall be permitted, in connection therewith to relocate its parking elsewhere within the Demised Premises at its sole cost and expense;

(c) such Tenant Amenity Development must comply with all standards and requirements of BCLC and any applicable Hotel Agreement;

(d) such Tenant Amenity Development cannot be used for a Prohibited Excess Lands Use;

(e) the Tenant shall comply, at its sole cost and expense with all requirements of Applicable Laws and all Permitted Encumbrances, with respect to such Tenant Amenity Development;

(f) the Tenant shall be responsible for satisfying all Gaming Authority Requirements and for complying with any applicable Hotel Agreement in connection with the Tenant Amenity Development;

(g) to the extent that there are any taxes, including any property transfer tax payable in connection with such Tenant Amenity Development, they shall be for the sole account of the Tenant;

(h) the Tenant Amenity Development shall be of an area, dimensions and design designated by the Tenant, with the design to be approved by the Landlord, acting reasonably, provided that the area and dimensions shall comply (subject to obtaining such rezoning, minor variances or site plan approvals to do so) with the applicable zoning, coverage and other Governmental Authority laws, rules and regulations. The Tenant Amenity Development shall be constructed by the Tenant at the Tenant’s sole cost and expense and shall be of a design, construction, quality and appearance to be compatible, complimentary and aesthetically consistent to and with the buildings and improvements then constructed on the Demised Premises;

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(i) such Tenant Amenity Development, and the lands necessarily ancillary thereto shall continue to be part of the Demised Premises under this Lease, and the Tenant shall continue to have sole operational control over, and responsibility for, such Amenity in such same manner as the balance of the Demised Premises;

(j) at no time shall such Tenant Amenity Development be included in (or be considered in connection with) the calculation of Annual Rent, including in connection with any Annual Rent being determined for any extension period of the Term, and for greater certainty, at no time shall Annual Rent increase to account for, or as a consequence of, the Tenant Amenity Development;

(k) all reasonable out of pocket costs and expenses of the Landlord and of its lenders in connection with development of the Tenant Amenity Development, including its reasonable legal costs, shall be borne by the Tenant;

(l) the Tenant shall, prior to the commencement of construction of any Tenant Amenity Development (and from time to time thereafter upon Landlord’s request), furnish to the Landlord at the Tenant’s expense such evidence as reasonably required by the Landlord of the projected cost of such Tenant Amenity Development and Tenant’s ability to pay therefor on a timely basis. For greater certainty, the Landlord shall be determined to be acting reasonably where it requests evidence as required by its lender;

(m) any Tenant Amenity Development shall be subject to compliance by the Tenant with the provisions of Section 7.1 and Article 16; and

(n) with respect to any Tenant Amenity Development which includes a hotel, Landlord shall have received a Comfort Letter.    

2.4 Development Applications

The Tenant, at the Tenant’s expense, may apply for and have approved any rezoning, subdivision and similar applications and approvals required in relation to any Tenant Amenity Development and any Expansion Facility (each, an “Application”, and collectively, the “Applications”), and the Landlord agrees that it shall, at the sole cost of the Tenant, use commercially reasonable efforts to facilitate any such Applications. If, in order to obtain approval of the Applications or to develop such Expansion Facility or Tenant Amenity Development: (i) new Permitted Encumbrances described in paragraphs (a) or (b) of Schedule “E”; (ii) portions of the Lands are required to be conveyed to a Governmental Authority for road widenings or intersections, then, in each case, the Landlord covenants to use commercially reasonable efforts to do so, without cost to the Landlord, and within a reasonable period of time following request. In addition, to the extent required by the Tenant in connection with the foregoing, the Landlord agrees to use commercially reasonable efforts to obtain postponements from its Mortgagees of the Mortgages to any such Permitted Encumbrances, and, where required, use commercially reasonable efforts to obtain partial discharges thereof, to the extent of such conveyances of land to Governmental Authorities. Notwithstanding the foregoing to the contrary,

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Landlord has the right to approve each Application, Permitted Encumbrance and Land conveyance, each as to form and substance, such approvals not to be unreasonably withheld.

2.5 Options to Extend

Provided that no Event of Default has occurred and is continuing, the Tenant shall be entitled to extend the term of this Lease for one (1) additional successive term of ten (10) years less one (1) day, on the same terms and conditions herein, except for Annual Rent which shall be in accordance with Section 3.1(c). Such right of extension shall be exercised by not less than twenty-four (24) months’ Notice in writing given by the Tenant to the Landlord prior to the expiration of the initial Term. This Lease will be extended on a then “as is” basis and the Landlord will not be required to provide a leasehold improvement allowance or perform any work on the Demised Premises. If the Tenant fails to give the notice of its intention to exercise a right of extension, the Tenant shall be deemed to have waived its right of extension.

ARTICLE 3

RENT PROVISIONS

3.1 Annual Rent

(a) The Tenant shall pay to the Landlord Annual Rent during the Term without set-off, abatement or deduction, Annual Rent of ● ($●) Dollars per annum plus the Management Expense Recovery.

(b) The Annual Rent shall be automatically increased on each annual anniversary of the Lease Commencement Date (excluding during any extension of the Term) by an amount equal to 2.25% of the Annual Rent payable by the Tenant under this Lease immediately prior to such rental reset.    

(c) During any extension term, if exercised, annual rent for the first year of such extension term shall be the then current fair market rental for similar premises in similar vicinities at the commencement of the extension term in question as agreed upon between the parties by no later than six (6) months prior to what would have been the expiry of the Term but for such extension, and failing agreement by that date then the Annual Rent for the extension term in question will be determined by arbitration in accordance with the Arbitration Act (British Columbia) and the provisions of this Lease. Notwithstanding the foregoing, in no event will the sum of the Annual Rent plus the Management Expense Recovery for the first year of any extension term be greater than 110% of, or less than 90% of, the sum of the Annual Rent plus the Management Expense Recovery charged in the final year of the Term prior to such extension. Each year after the first year of any extended Term, the Annual Rent shall be automatically increased by an amount equal to 1.25% of the Annual Rent payable by the Tenant under this Lease immediately prior to such rental reset.

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(d) The parties agree that Annual Rent is not now, nor will it in the future be, calculated or determined based upon the leaseable area of the Buildings, and for the purposes of calculating fair market rental for the purposes of Section 3.1(c) at no time shall any Tenant Amenity Development (constructed pursuant to Section 2.3) be considered or included.

(e) The Annual Rent and the Management Expense Recovery shall be paid in twelve (12) equal monthly installments, in advance, on the first day of each month of each Lease Year, pro-rated for any part of a month in which the Term commences or expires.

(f) The Tenant shall pay to the Landlord the Additional Rent and Sales Taxes due under this Lease when due pursuant to the terms of this Lease.

(g) If requested by the Landlord, Tenant shall pay Rent and Sales Taxes by automated clearing house or wire transfer as directed by Landlord or its Mortgage lenders.

ARTICLE 4

OPERATING PROVISIONS

4.1 Use and Operation

The Tenant may use the Demised Premises for all purposes and uses that the Demised Premises was being used for immediately prior to the Lease Commencement Date (including without limitation, casino, hotel, hospitality, convention and meeting, office, restaurant and food and beverage and other uses ancillary thereto) or any other use permitted under Applicable Laws; provided, however, the Demised Premises shall not be used for any Prohibited Excess Lands Use. The Tenant shall operate, maintain and replace the Demised Premises in accordance with the Building Standard. Other than as provided in the definition of “Event of Default” in Article 1 hereof, the Tenant shall have no obligation to open, operate, conduct or to remain open for the conduct of any business in all or any part of the Demised Premises or use the Demised Premises for any period of time or purpose and no such obligation shall be implied hereunder, notwithstanding any other provision of this Lease. The Tenant further covenants and agrees that if it enters into a Hotel Agreement, Landlord shall receive a Comfort Letter with respect thereto.

4.2 Care of Demised Premises

The Tenant shall not perform any acts or carry on any practices which might materially damage the Demised Premises and shall keep the Demised Premises clean, safe and orderly and otherwise in accordance with the Building Standard. The Tenant shall not use or permit the use of any portion of the Demised Premises for any unlawful purpose or purposes or in any manner which violates the OSA or any Applicable Law.

4.3 Compliance with Laws

The Tenant shall carry on and conduct its business in the Demised Premises in such a manner so as to comply with all Applicable Laws, and in such a manner so as not to

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cause a nuisance. The Tenant shall be solely responsible for obtaining from all Governmental Authorities having jurisdiction all necessary permits, licenses and approvals as may be necessary to permit the Tenant to conduct its business in or on the Demised Premises including all Gaming Authority Requirements imposed on it or Covenantor. The Landlord covenants and agrees, at Landlord’s sole expense, to be solely responsible for obtaining from Gaming Authorities all Gaming Authority Requirements applicable to the Landlord, its lenders and its managers, agents, and service providers. The Tenant shall comply at its own expense with all Applicable Laws respecting the use, condition and occupation of the Demised Premises, and all Leasehold Improvements, fixtures, equipment (including without limitation, Tenant’s Trade Fixtures) and contents thereof (whether or not any non-compliance with Applicable Laws existed on or prior to the Lease Commencement Date) [and to the extent that compliance with Applicable Laws (including without limitation, parking or zoning requirements) requires that the owner of the Excluded Lands enter into an easement with Landlord for the use of the Excluded Lands in order that the Demised Premises and the use thereof continue to comply with Applicable Laws, the Tenant agrees to cause such owner to do so effective as of the Commencement Date; provided, however, such easement may be terminated when no longer required by Applicable Law] [●NTD: Grand Villa Property only]. If the Tenant fails to do so such that an Event of Default is continuing (or where no such Event of Default is continuing but an Emergency Event has occurred and is continuing), in addition to the Landlord’s other rights and remedies, the Landlord may, on reasonable Notice to the Tenant, but shall not be obligated to do all things so that the Tenant is in compliance with all Applicable Laws, and the costs thereof, plus an administrative fee equal to fifteen (15%) percent thereof, shall be payable forthwith by the Tenant upon demand by Notice as Additional Rent.

ARTICLE 5

TAXES

5.1 Taxes Payable by Tenant

The Tenant shall pay directly to the relevant Governmental Authority all Taxes Charged against the Demised Premises in respect of any period during the Term and any period prior thereto. The Tenant shall provide to the Landlord, upon request, satisfactory evidence that Taxes have been paid on or before their due date, failing which Landlord may pay the same and Tenant shall reimburse Landlord for the amount so paid, plus an administrative fee equal to fifteen percent (15%) thereof, upon demand by Notice as Additional Rent. In the event the Tenant defaults in paying Taxes when due, the Landlord may, by Notice to the Tenant, require that all future Taxes be paid by the Tenant to the Landlord in monthly installments as Additional Rent and not directly to the relevant Governmental Authority, in which case the Landlord shall provide to the Tenant, upon request, satisfactory evidence that such Taxes have been paid on or before their due date. Penalties for late payment of Taxes shall be payable by the Party responsible for the payment of Taxes as provided above, except that the Landlord shall not be responsible for such penalties if the Landlord has failed to timely pay Taxes as a result of the Tenant’s failure to timely deliver Additional Rent installments payable to the Landlord for purposes of the Landlord’s payment of such Taxes.    

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5.2 Apportionment

In the event that this Lease expires or is terminated on any day other than December 31, any amount payable by the Tenant pursuant to Section 5.1 hereof shall be apportioned.

5.3 Contest Taxes

The Landlord covenants and agrees that, upon prior Notice to the Landlord, the Tenant shall have the right, at its expense, to contest the amount and/or legality of any Taxes, business taxes (of the Tenant), assessments and/or any other rates and charges which the Tenant is obligated under the terms of this Lease to pay to a Governmental Authority, either in whole or in part and/or to make application for cancellation or reduction of same or any assessment upon which the same may be based, and the Landlord agrees at the request of the Tenant to consent to or authorize such action by the execution of any document necessary in connection with such contest or application at no cost to the Landlord, and the prosecution of any such contest or application should be without obligation or cost to the Landlord unless the Landlord chooses to be a party thereto. If the Tenant shall contest the amount and/or legality of any such Taxes, business taxes, assessments and/or any other rates and charges which the Tenant is obligated under the terms of this Lease to pay either in whole or in part and/or make application for cancellation or reduction thereof or any assessment upon which the same may be based, the time within which the Tenant shall be required to pay the same either in whole or in part shall, if permitted by law, be extended until such contest or application shall have been finally determined, provided such Taxes and/or assessments are bona fide contested and such contestation is promptly prosecuted and does not subject the Demised Premises to forfeiture or sale or otherwise cause the Landlord to be in default for the payment of Taxes or incur penalties, interest charges or fines with respect thereto. The Tenant agrees that it will prosecute any such contest and/or application with due diligence and at its own expense on its own behalf without obligation of the Landlord, and the benefit of such contest and/or application shall be applied to the Demised Premises. If the Tenant is not contesting or appealing Taxes, the Landlord may, at its own expense (provided Landlord may in any year, including later years, recover from Tenant Landlord’s reasonable expenses in connection therewith to the extent of the lesser of (i) any reduction in Taxes in such year resulting from Landlord’s actions, and (ii) the total of Landlord’s reasonable expenses less any amount recovered by Landlord from the Tenant in respect of such expenses in a preceding year) and with the prior written consent of the Tenant, not to be unreasonably withheld or delayed, contest any Taxes with respect to the Demised Premises and appeal any assessments related thereto. The Tenant and the Landlord shall co-operate and consult with each other in respect of any such contest or appeal and each shall provide to the other Party such information and execute such documents and authorizations as requested to give full effect to the foregoing. The Tenant’s Taxes shall remain payable regardless of any deferral of payment permitted by the local Governmental Authority or contestation or appeal of Taxes by the Landlord provided, however, that in the event the Tenant shall have paid any amount in respect of Taxes in excess of the amount ultimately found payable as a result of the disposition of any such contest or appeal, and the Landlord receives a refund in respect thereof, the amount of such refund shall be refunded forthwith to the Tenant (net of any reasonable

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expenses of the Landlord with respect to such contest or appeal permitted under this Section 5.3). In the event that as a result of the disposition of any such contest additional Taxes are due, the Tenant shall pay such Taxes when due in the manner provided herein, together with any late fees, interest, penalties or fines then due the applicable Governmental Authority with respect thereto.

5.4 Utilities and Business Tax

The Tenant shall pay as Additional Rent all public utilities including, without limitation, all sewer, steam, fuel, oil, telephone, cable, internet, water, gas and electric rates and charges in connection with the use and occupation of the Demised Premises and heating and air-conditioning the Demised Premises (collectively, Utilities”) and pay all taxes, rates, duties, assessments and license fees whatsoever, whether municipal, parliamentary or otherwise, now or hereafter charged, assessed or levied upon or in respect of the personal property, fixtures, Leasehold Improvements, machinery, equipment, inventory, income, business of the Tenant or those claiming under it in connection with the Demised Premises including, without limitation, any business tax levied against the Tenant or those claiming under it. The Tenant shall be solely responsible for and shall promptly pay for, as and when they fall due, all costs and expenses incurred in respect of the operation, maintenance and repair of the Demised Premises, including the costs of providing cleaning, landscaping, snow removal, garbage removal and parking lot sweeping services to the Demised Premises. The Tenant’s use of any Utilities shall not exceed the available capacity of the existing systems from time to time. If the Tenant desires at any time to obtain any Utilities in excess of such available capacity, the Tenant may supply and install at its expense any special wires, conduits or other equipment necessary to provide such additional capacity, provided the Tenant shall, at its expense, promptly repair any damage to the Demised Premises which may be caused by such supply or installation.

5.5 Other Taxes

The Landlord shall be responsible and pay for, without reimbursement from the Tenant, all Landlord net income taxes, corporate taxes, commercial concentration taxes, business taxes (other than those payable by the Tenant pursuant to other provisions of this Lease and other than the business occupancy component of taxes, which shall in all events be payable by the Tenant), Capital Taxes and Canadian Withholding Taxes associated with the Demised Premises. In each calendar year during the Term, the Tenant will pay and discharge or cause to be paid or discharged when they become due and payable, all taxes, rates, duties and assessments, license fees and other charges that may be levied, rated, charged or assessed in respect of any and every business carried on thereon or therein or in respect of the use or occupancy thereof by the Tenant and by any and every sublessee, licensee, concessionaire and all other persons conducting business upon or from the Demised Premises, to the extent that such are not included in Taxes paid by the Tenant, whether the taxes, rates, duties, assessments and license fees are charged by a municipal, parliamentary, school or other body during the Term. If any such taxes (or any penalties, interest, fines or late charges associated therewith) are not paid by Tenant when due, and if the same may become a Charge on the Demised Premises or otherwise be or become

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the liability of Landlord to pay, then Landlord may (but shall be under no obligation to) pay the same and Tenant shall reimburse Landlord for the amount so paid, plus an administrative fee equal to fifteen percent (15%) thereof, upon demand by Notice as Additional Rent.

5.6 Sales Taxes

Notwithstanding any other provisions of this Lease to the contrary, the Tenant shall pay to the Landlord an amount equal to any and all Sales Taxes, it being the intention of the parties that the Landlord shall thereby be fully reimbursed by the Tenant with respect to any and all Sales Taxes so payable by the Landlord. The amount of such Sales Taxes so payable by the Tenant shall be calculated by the Landlord in accordance with the applicable legislation and shall be paid to the Landlord at the same time as the amounts to which such Sales Taxes apply are payable to the Landlord under the terms of this Lease or upon demand at such other time or times as the Landlord from time to time determines. Notwithstanding any other provision in this Lease to the contrary, the amount payable by the Tenant under this Section 5.6 shall be deemed not to be Rent, but the Landlord shall have all of the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

ARTICLE 6

REPAIRS AND MAINTENANCE

6.1 Repairs and Maintenance

(a) The Tenant shall, at its expense (save and except as provided in Section 6.1(e) below as to certain capital repairs and replacements required during the last twenty-four (24) months of the Term), diligently and in a good and workmanlike manner perform such maintenance, repairs and replacements as are required to keep the Demised Premises (including the structural components thereof), including the Building Systems and all Services located in, on or about the Demised Premises (including parking areas, driveways, roadways, service areas, and facilities, including those outside the Demised Premises such as sidewalks, boulevards, off-site utility and service connections and in respect of areas and Services shared by users of the Demised Premises and users of other properties, if any, in each case to the extent the Landlord is required to perform or contribute to the same as a result of its ownership of the Demised Premises) in accordance with the Building Standard. Without limiting the generality of the foregoing, and without notice or demand from the Landlord, the Tenant shall:

(i) maintain and keep, or cause to be maintained and kept, in a good state of repair the Demised Premises, all systems therein and the Leasehold Improvements, and promptly make all needed repairs and replacements, including without limitation, the structure, foundations, roof or roof membrane;

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(ii) keep the Demised Premises in a well painted, clean and tidy condition, and not permit wastepaper, garbage, ashes, waste or objectionable material to accumulate thereon or in or about the Demised Premises, other than in areas designated by the Landlord;

(iii) repair all damage in the Demised Premises resulting from any misuse, excessive use or installation, alteration, or removal of Leasehold Improvements, fixtures, furnishings or equipment;

(iv) maintain and keep the sidewalks, parking areas, driveways and landscaping in a good state of repair, and in a clean and tidy condition. With respect to the sidewalks, parking areas and driveways such state shall include without limitation, keeping same free from accumulation of dirt, rubbish, snow and ice. With respect to parking areas and driveways, such state shall also include repaving and restriping from time to time. With respect to landscaping, such state shall include without limitation landscaping in such condition as a careful owner would do including the replacement of lawn and landscaping where the Tenant has failed to care for such lawn and landscaping as a careful owner would do; and

(v) at the expiration or sooner determination of the Term, peaceably surrender and yield up unto the Landlord the Demised Premises in good and substantial repair and condition.

(b) The obligations of the Tenant in paragraph (a) above are subject to the following exceptions: (i) injury caused by or resulting from any Gross Negligence or willful misconduct of the Landlord, its servants, employees, contractors or those for whom the Landlord is in law responsible (other than Tenant Parties); and (ii) the provisions of Article 10 hereof.

(c) The Landlord may, subject to compliance with the Tenant’s reasonable security and health and safety requirements and, subject to all Gaming Authority Requirements, enter the Demised Premises accompanied by a representative of the Tenant during business hours upon reasonable prior Notice to view the state of repair and condition thereof and the Tenant shall promptly perform according to the Landlord’s Notice any maintenance, repairs or replacements in accordance with the Tenant’s obligations hereunder. The Tenant shall be responsible for the reasonable costs of such inspection and any required re-inspections to confirm the Tenant’s compliance.

(d) If the Tenant fails to maintain, repair or replace as provided herein within thirty (30) days of receipt of the Landlord’s Notice in respect of such maintenance, repair or replacement, the Landlord has the right, but not the obligation, to do so, and all reasonable out-of-pocket costs and expenses incurred by the Landlord plus an administrative fee of fifteen (15%) percent of such reasonable costs and expenses shall be payable by the Tenant forthwith after Notice as Additional Rent.

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(e) The obligations of the Tenant with respect to the capital repair and/or replacement in respect of the Demised Premises during the last twenty-four (24) months of the Term shall be limited to those set out in Article 9, Article 10 and this Section 6.1(e). To the extent that capital replacements or repairs, the cost of which are reasonably expected to exceed [One Million Dollars ($1,000,000)][NTD: $1,000,000 in the case of Starlight, $1,500,000 in the case of Cascades, and $2,500,000 in the case of Grand Villa], should need to be made to the Demised Premises during the last twenty-four (24) months of the Term in order to maintain the Demised Premises in accordance with the Building Standards, Tenant may elect, by Notice to Landlord (a “Capital Repair Notice”), not to make such capital repair or replacement, and, subject to Article 9 and Article 10 hereof and the other provisions of this Section 6.1(e), the same shall not constitute a default hereunder. For the sake of clarity, to the extent that capital replacements or repairs, the cost of which are reasonably expected not to exceed [One Million Dollars ($1,000,000)][NTD: $1,000,000 in the case of Starlight, $1,500,000 in the case of Cascades, and $2,500,000 in the case of Grand Villa], should need to be made to the Demised Premises during the last twenty-four (24) months of the Term in order to maintain the Demised Premises in accordance with the Building Standards, Tenant shall make such capital replacements or repairs at its sole cost. Upon receipt of such a Capital Repair Notice, Landlord may elect (but shall be under no obligation) to make such capital replacement or repair at its expense, in which event Tenant shall cooperate with Landlord to permit Landlord to do so, or Landlord may elect (but shall not be obligated to do so) to have Tenant perform such capital repairs or replacements at Landlord’s expense. If Landlord makes such capital repairs or replacements, or pays to have Tenant do so as aforesaid, then, the reasonable cost to finance same shall be amortized over the useful life of the improvements and the Tenant shall pay, as Additional Rent, the portion of such amortized amount attributable to the remaining Term of the Lease, in monthly installments. Notwithstanding the foregoing to the contrary, in all events Tenant shall be responsible for (and shall pay for):

(i) repairs or replacements caused by perils which the Tenant is required to insure against pursuant to the provisions of Section 9.1 hereof or otherwise insures against;

(ii) repairs or replacements attributable to defects in the original design or construction of the Tenant’s work described in Section 7.1 hereof;

(iii) repairs or replacements caused by work performed by or on behalf of the Tenant;

(iv) repairs or replacements caused by the acts, omissions or negligence of the Tenant or Tenant Parties or by its or their misuse of the Demised Premises or parts thereof;

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(v) repairs or replacements caused by the failure of the Tenant to complete any maintenance or repairs which the Tenant is required to perform under the terms of this Lease; and

(vi) repairs or replacements which are covered by any warranty assigned to the Tenant or that would be covered by a warranty were it not for the acts or omissions of the Tenant.

6.2 Tenant’s Acknowledgement

(a) The Tenant acknowledges that it is leasing the Demised Premises hereunder on an “as is, where is” basis and without any representation or warranty by the Landlord of any kind whatsoever. Without limiting the generality of the foregoing, there is no condition, representation or warranty of any kind whatsoever with respect to title, description, encumbrances, physical or environmental condition, size, marketability, zoning, compliance with law, fitness for any particular purpose or any other matter whatsoever concerning the Demised Premises.

(b) The Tenant shall promptly pay and discharge all payments required under any encumbrance or instrument affecting title or otherwise affecting the Demised Premises and perform all obligations thereunder, in each case as such payments or obligations relate to the Term (or any period prior to the Term). The Tenant shall comply with any outstanding work orders in respect of the Demised Premises. The foregoing covenants shall not relate to any Mortgage or other financing of the Landlord or any other encumbrance or instrument registered or affecting title as a result of any act or omission of the Landlord or anyone for whom it is in law responsible (other than Tenant or another Tenant Party). Without limiting the foregoing, the Tenant shall be responsible for and shall pay and perform all obligations required to be paid or performed by the Landlord under all Permitted Encumbrances at the Tenant’s expense. If Tenant fails to timely pay or perform its obligations under this Section 6.2(b), Landlord may, but shall be under no obligation to, do so, in which event Tenant shall reimburse Landlord for such payment (or Landlord’s expense in performing such obligation, as applicable), plus an administrative fee equal to fifteen percent (15%) thereof, upon demand by Notice as Additional Rent.

(c) Save and except as expressly set out herein and save and except to the extent of the Gross Negligence or willful misconduct of the Landlord, the Landlord shall not be responsible for any maintenance, repairs, replacements, alterations or improvements in respect of the Demised Premises.

ARTICLE 7

ALTERATIONS

7.1 Alterations

The Tenant shall not make any Alterations without complying with the following provisions:

(a) The Tenant may make Alterations to the Demised Premises other than Structural Alterations and Major Alterations without the Landlord’s prior consent, but with prior Notice to Landlord as to any Alterations costing in excess of Two Million Dollars ($2,000,000). The Landlord agrees that, to the extent that any proposed Structural Alterations or Material Alterations are described on Schedule “F” hereto, the Landlord hereby consents thereto. Structural Alterations and Major Alterations shall require the Landlord’s prior consent, which consent shall not be unreasonably withheld, delayed or conditioned unless such Structural Alterations or Major Alterations when completed may, in the Landlord’s opinion, acting reasonably and in good faith, reduce the value or impair the use of the Demised Premises in which case the Landlord’s consent may be arbitrarily withheld.

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(b) With its request for the Landlord’s consent to any Structural Alterations or Major Alterations, the Tenant shall submit to the Landlord details of the proposed Alterations including plans and specifications where applicable prepared by a qualified Architect, the estimated costs of such Structural or Major Alterations and such Alterations shall be completed materially in accordance with such plans and specifications once approved in writing by the Landlord.

(c) Unless expressly authorized in writing by the Landlord to the contrary, all Structural Alterations shall be conducted under the supervision of an Architect retained by the Tenant and approved by the Landlord, such approval not to be unreasonably withheld, delayed or conditioned. The name of the supervising Architect shall be included with the request set out in Section 7.1(b) above.

(d) All Alterations shall be performed at the Tenant’s cost, promptly and in a good and workmanlike manner by competent contractors or workmen. In respect of Major Alterations and Structural Alterations, the Tenant shall pay for the reasonable cost of an experienced construction consultant engaged by Landlord as Additional Rent as part of Landlord’s inspection and supervision. Tenant shall retain a qualified Architect approved by the Landlord, acting reasonably, and such qualified Architect shall supervise the completion of the Alterations where an Architect is customarily required.

(e) All Alterations shall be planned and completed in compliance with all Applicable Laws and the Tenant shall, prior to commencing any Alterations, obtain at its expense, all necessary permits and licenses and satisfy all Gaming Authority Requirements and, upon the Landlord’s written request, provide evidence thereof satisfactory to the Landlord, acting reasonably. The Tenant shall maintain such insurance as the Landlord or its Mortgagee may reasonably require during the period any Alterations are being performed, and comply with any requirements of the insurers with respect thereto.

(f) The Tenant shall, prior to the commencement of any Structural Alterations or Major Alterations, furnish to the Landlord at the Tenant’s expense such evidence as reasonably required by the Landlord of the projected cost of such Structural Alterations or Major Alterations and Tenant’s ability to pay therefor on a timely basis. For greater certainty, the Landlord shall be determined to be acting reasonably where it requests evidence as required by its lender.

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(g) The Tenant shall make all payments and use reasonable efforts to ensure that no lien is registered against the Demised Premises or any portion thereof as a result of any work, services or materials supplied to the Tenant or the Demised Premises whether occurring prior to or after the Lease Commencement Date. The Tenant shall cause any such registrations to be discharged or vacated promptly after Notice from the Landlord, or within five (5) Business Days after notice of registration, whichever is earlier. The Tenant shall indemnify and save harmless the Landlord from and against any liabilities, claims, liens, damages, costs and expenses, including reasonable legal expenses, arising in connection with any work, services or materials supplied to the Tenant or the Demised Premises. If the Tenant fails to cause any such registration to be discharged or vacated as aforesaid then, in addition to any other rights of the Landlord, the Landlord may, but shall not be obliged to, vacate the same by paying the amount claimed into court, including all interest, late fees, court costs and related fees and charges, and the amounts so paid and all costs incurred by the Landlord, including legal fees and disbursements, plus an administrative fee equal to fifteen percent (15%) of such aggregate costs and expenses, shall be paid by the Tenant to the Landlord forthwith upon demand by Notice as Additional Rent.

(h) The Landlord may, at its option, have a representative of the Landlord accompany the Tenant during the installation or removal of or the completion of any Alterations, provided that the Landlord and its representatives shall comply with the Tenant’s reasonable policies and procedures relating to security and health and safety.

(i) Notwithstanding anything to the contrary contained herein, no Alterations shall be performed unless:

(i) such Alterations, when completed, do not reduce the value of the Demised Premises (as determined in good faith by Landlord);

(ii) no Event of Default has occurred and is continuing, unless such Alteration is required to be performed by the Tenant to fulfill an obligation of the Tenant under this Lease;

(iii) plans and specifications pertaining to any Structural Alterations (including any related Alterations) or Major Alterations have been provided to and approved by the Landlord; and

(iv) Landlord is provided with then current as-built plans and specifications for the Demised Premises.

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7.2 Emergency Alterations

Notwithstanding anything to the contrary contained in this Lease, if there is an Emergency Event:

(a) the Tenant may take such actions, including making Alterations, as are reasonably required to prevent, cure or avert the emergency giving rise to the Emergency Event;

(b) the Tenant shall notify the Landlord of the Emergency Event and of the actions taken as soon as is reasonably possible after the occurrence of the Emergency Event; and

(c) if such Alterations would otherwise require the Landlord’s prior consent pursuant to the terms of this Lease, the Tenant shall forthwith after the Emergency Event seek the Landlord’s consent to the Alterations so made or actions so taken and, to the extent that other Alterations or actions requiring the Landlord’s consent are required to remedy the situation giving rise to the Emergency Event on a more permanent basis, shall seek the Landlord’s consent to such Alterations or actions in accordance with the provisions of Section 7.1 or such other provisions of this Lease as may be applicable.

7.3 Ownership and Removal

(a) Upon installation, all Leasehold Improvements and Alterations shall become the property of the Landlord free and clear of any liens or encumbrances, but the Landlord shall not have any responsibility in respect of the maintenance, repair or replacement thereof, except as expressly provided herein.

(b) The Tenant may, at its sole option, but without any requirement to do so, replace, alter or remove any of the Tenant’s Trade Fixtures from the Demised Premises during the Term or at the expiry or earlier termination of the Term.

(c) At the expiry or earlier termination of the Term, the Tenant shall, to the extent required by the Landlord, subject to Section 6.1(e), surrender the Building in compliance with the Building Standard.

7.4 Vacating of Possession

Upon the expiry or earlier termination of the Term, the Tenant shall deliver to the Landlord vacant possession of the Demised Premises in a neat, clean and tidy condition in accordance with the Building Standard. The Tenant shall also deliver to the Landlord all keys, security codes, computer programs, combinations, warranties, manuals, handbooks, logbooks and maintenance records maintained by or in the Tenant’s possession or control with regard to the Demised Premises the Building Systems and any equipment or systems installed in, or over the Demised Premises.

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ARTICLE 8

TRANSFER/ASSIGNMENT/SUBLEASE

8.1 Change of Control

Provided that the Financial Covenant is not breached as consequence thereof, the Covenantor may effect a Change of Control without the Landlord’s consent, provided that (i) the Tenant provides to the Landlord Notice of such Change of Control and evidence reasonably satisfactory to Landlord that the Financial Covenant was maintained thereafter, at least twenty (20) Business Days following such Change of Control, (ii) if, following the Change of Control, the Covenantor is not the surviving entity with all the rights and liabilities of the Covenantor immediately before the Change of Control, then concurrently with the Change of Control the Landlord shall have received (x) a fully executed assignment and assumption of the Landlord BCLC Agreement with Tenant’s consent thereto, (y) a fully executed assignment and assumption of the Covenant Agreement and the OSA applicable to the gaming operations at the Demised Premises from the Covenantor and the successor Covenantor (that is, the new Covenantor) with Tenant’s consent thereto immediately after such Change of Control, and (z) evidence reasonably satisfactory to Landlord that the Change of Control and such assignments and assumptions do not breach the OSA or the Landlord BCLC Agreement, and (iii) concurrently with the earlier of the deliveries pursuant to clause (i) or (ii) above, the Tenant provides the Landlord with evidence reasonably satisfactory to Landlord that no Event of Default has occurred (or, with the giving of notice or the passage of time or both, as applicable, will occur) as a result of such Change of Control, including without limitation, the continued compliance with all Applicable Laws with respect to the Demised Premises and the operations thereat.

8.2 Transfer

(a) Subject to complying with the terms of this Section 8.2, any Transfer where the Transferee is a Permitted Covenantor Successor or Assign shall be permitted without the Landlord’s consent, and upon the effective date of such Transfer, the Tenant and the Covenantor shall be released of their respective obligations and liabilities hereunder and under the Covenant Agreement which arise from and after the effective date of such Transfer. After the effective date of such Transfer, any such Permitted Covenantor Successor or Assign shall only be obligated to satisfy the Financial Covenant and shall not be obligated to continue to be a Permitted Covenantor Successor or Assign.

(b) Any Transfer to a Person who is not a Permitted Covenantor Successor or Assign shall be permitted without the Landlord’s consent so long as the terms of this Section 8.2 are complied with, provided that: (i) the Tenant and the Covenantor shall not be released from their respective obligations and liabilities hereunder or under the Covenant Agreement (and to evidence and further document such continuing obligations and liabilities, Tenant and Covenantor shall execute and deliver to Landlord concurrently therewith a joint and several guaranty of all obligations and liabilities the new Tenant and the new Covenantor with respect to

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this Lease on such form as is satisfactory to Landlord, acting reasonably), (ii) each of the Covenantor and such Transferee shall thereafter continuously satisfy the Financial Covenant, and (iii) and the Financial Covenant is not breached as a result thereof (and Landlord is provided with evidence thereof reasonably satisfactory to Landlord).

(c) Any Transfer to a Transferee who is (i) a successor of the Covenantor resulting from the amalgamation, arrangement, merger, or corporate reorganization of the Covenantor with one or more Affiliates of the Covenantor; or (ii) an Affiliate of the Covenantor shall be permitted without the consent of the Landlord, provided that the Financial Covenant is not breached as a result thereof (and Landlord is provided with evidence thereof reasonably satisfactory to Landlord) and provided that, in either case, the Covenantor confirms in writing that it will not be released under the Covenant Agreement upon such Transfer. For the sake of clarity (and notwithstanding any other provisions hereof that may be to the contrary), clauses (r) and (s) of the definition of Event of Default shall continue to apply to the successor Covenantor following such transactions as though it were the named Covenantor herein.

(d) Any Transfer other than that set out in Sections 8.2(a), 8.2(b) or 8.2(c) shall require the Landlord’s consent.

(e) As a condition to any Transfer, the Tenant (and if the Tenant is the Transferor, the Transferee (as the new Tenant)), the Covenantor and the new Covenantor, shall enter into a multi-party agreement with the Landlord, prepared by the Landlord at the Tenant’s expense (provided that the Landlord’s costs related thereto are reasonable), pursuant to which the new Covenantor (and if the Tenant is the Transferor, the Transferee (as the new Tenant)), agree(s) to be bound by all of the Tenant’s obligations under this Lease arising from and after the effective date of such Transfer (“Assumption Agreement”), and which shall otherwise be in form acceptable to the Landlord and the Covenantor, each acting reasonably. For the sake of clarity, no Transfer shall be effective unless and until an Assumption Agreement is fully executed and delivered. Further, no Transfer shall be permitted or effective unless and until the Landlord shall have received (i) if the Tenant is not released pursuant to the foregoing provisions, a fully-executed Landlord BCLC Agreement among the Tenant, Covenantor, Landlord and BCLC that is limited only to the provisions of Section 2 thereof (in the form of Section 2 of the Landlord BCLC Agreement in effect on the date hereof), and other provisions of such agreement that would remain applicable thereto or are required by BCLC, that continues the irrevocable direction to BCLC with respect to amounts coming due from BCLC to the Covenantor with respect to past-due rents and other amounts owing under this Lease, (ii) in all cases, a fully-executed replacement Landlord BCLC Agreement (in the form of the Landlord BCLC Agreement in effect on the date hereof) from the Tenant (or if the Tenant is the Transferor, the Transferee (as the new Tenant)), Landlord, the new Covenantor and BCLC, (iii) in all cases, a fully executed new Covenant Agreement (in the form of the Covenant Agreement in effect on the date hereof) from the Tenant (or

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if the Tenant is the Transferor, the Transferee (as the new Tenant)), Landlord, and the new Covenantor, (iv) in all cases, a copy of the new Covenantor’s OSA pertaining to gaming operations at the Demised Premise, which shall be on terms reasonably acceptable to Landlord, it being acknowledged the Landlord cannot object to an OSA that is on BCLC’s standard or customary form, and (v) such licenses or other documents, instruments or information as Landlord may reasonably request to evidence no Event of Default will result from such Transfer (which may include an assignment and assumption of Tenant’s and Covenantor’s interest in any Hotel Agreement, as well as Tenant’s and Covenantor’s interest in any other subleases of any portion of the Demised Premises and any encumbrances as to which Tenant is responsible as to payment or performance under this Lease), and (vi) a Comfort Letter, to the extent that any existing Comfort Letter delivered to the Landlord would not be effective following the Transfer. Tenant shall pay all property transfer taxes resulting from a Transfer. [Add any special provisions pertaining to Strata regime, such as assignment of Strata rights to the new Tenant.]

8.3 Charge of Leasehold Interest

(a) The Landlord’s consent shall not be required to any Leasehold Mortgage, provided that no Event of Default has occurred and is continuing. Upon request by a Mortgagee of the Tenant’s leasehold interest, the Landlord shall, if required by the Tenant, enter into a Landlord Lender Agreement with the Mortgagee of the Tenant’s interest, which form, in each case, must be amended to account for any rights of BCLC pursuant to the Landlord BCLC Agreement.

(b) Neither the Tenant nor the Covenantor shall be released from any of its obligations hereunder upon the granting of a Leasehold Mortgage or the foreclosure thereof.

8.4 Subleases

The Landlord and the Tenant acknowledge and agree that all leases and licenses (including, for clarity, cellular phone towers and rooftop areas, leases or licenses) of the Demised Premises or any part thereof existing at the Commencement Date shall, from and after the Commencement Date be, for all purposes, treated as subleases and subject to this Lease, and the Tenant shall be responsible for the performance of all landlord obligations thereunder, and shall be entitled to all revenues pursuant thereto. The Tenant shall be permitted to create subleases or licenses of areas within the Demised Premises from time to time without the Landlord’s consent, provided that same are entered into in the ordinary course of the Tenant’s business, do not constitute a Transfer and are not binding upon the Landlord. Neither the Tenant nor the Covenantor shall be released from any of its obligations hereunder upon the granting of a sublease. The Tenant shall pay or cause to be paid all property transfer taxes resulting from any sublease or license.

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8.5 Effect of Transfer

No consent of the Landlord to a Transfer, to the extent such consent is required under this Lease, shall be effective unless given in writing and executed by the Landlord and no such consent shall be deemed or presumed by any act or omission of the Landlord or by the Landlord’s failure to respond to any request for consent or by the Landlord’s accepting any payment of any amount payable hereunder from any party other than the Tenant. Without limiting the generality of the foregoing, the Landlord may collect Rent and any other amounts from any Transferee and apply the net amount collected to any Rent and the collection or acceptance of any Rent shall not be deemed to be a waiver of the Landlord’s rights under this Section 8.5 nor an acceptance of or consent to any such Transfer or a release of any of the Tenant’s obligations under this Lease. No Transfer and no consent by the Landlord to any Transfer shall constitute a waiver of the necessity to obtain the Landlord’s consent to any subsequent or other Transfer to the extent such consent is otherwise required under this Lease.

8.6 Corporate Books

Upon request, the Tenant shall make the corporate books and records of the Tenant and Covenantor, and of any Affiliate of the Tenant or Covenantor available to the Landlord and its representatives for inspection in order to ascertain whether or not there has been any Transfer or Change of Control or in connection with any sale or proposed sale by the Landlord of its interest in the Land or Buildings, or any assignment or proposed assignment of Landlord’s interest in this Lease or in connection with any Mortgage or proposed Mortgage by Landlord.

8.7 Transfer by way of Sublease

Notwithstanding any of the foregoing to the contrary, the Tenant shall have no right to effect Transfers by way of sublease, except with the prior written consent of the Landlord.

8.8 Transfer by Landlord

(a) The Landlord shall be permitted to assign this Lease only to a Person who, prior to its acquisition thereof, has satisfied all Gaming Authority Requirements applicable to a landlord under this Lease in connection with such acquisition and its acting as landlord, and only in connection with: (i) the sale of the fee simple freehold interest in and to the whole of the lands containing the Demised Premises provided that in such instance, the Landlord requires as a condition of the sale of the Demised Premises, that the proposed transferee be required prior to closing, to execute and deliver an assumption agreement with the Landlord and Tenant with respect to obligations of Landlord arising from and after the effective date of such assignment; or (ii) in connection with the assignment, mortgage or pledge of the Lease and Land and Buildings in favour of a Freehold Mortgagee.

(b) Notwithstanding the foregoing for so long as no Event of Default has occurred that is continuing, the Landlord shall not be permitted to sell the lands, in whole

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or in part, upon which the Demised Premises are located (or to assign its interest in this Lease) to any Person that, at such time, is a Major Supplier, Major Customer or Competitor of the Tenant as defined in Schedule “D” attached hereto, without the prior written consent of the Tenant (provided, however, that in no event, including when an Event of Default is continuing, shall the Landlord be permitted to sell the Lands, in whole or in part, upon which the Demised Premises are located (or to assign its interest in this Lease) to Great Canadian Gaming Corporation).

(c) If the Landlord assigns its interest in this Lease as provided above:

(i) to the extent that the purchaser or assignee agrees with the Landlord and the Tenant to assume the covenants and obligations of the Landlord hereunder with respect to obligations of Landlord arising from and after the effective date of such assignment, and the Landlord has provided Notice thereof to the Tenant together with a copy of such assumption agreement executed by the Transferee, the Landlord shall be released from its future liability pursuant to the terms of this Lease for any obligations that arise from and after the effective date of such sale or disposition; and

(ii) the assignee shall deliver to the Tenant an assumption of Landlord’s interest in the Landlord BCLC Agreement, consented to by BCLC.

(d) Tenant shall (and shall cause Covenantor to) cooperate with Landlord in any transaction addressed in this Section 8.8, including without limitation, executing an assignment and assumption of the Landlord BCLC Agreement with Landlord’s purchaser or assignee, as applicable.

8.9 Landlord’s Expenses

All reasonable out of pocket expenses incurred by Landlord in connection with any of the transactions described in Sections 8.1 through 8.7 hereof shall be reimbursed by Tenant promptly upon demand by Landlord.

ARTICLE 9

INSURANCE

9.1 Tenant’s Insurance

(a) The Tenant, in the names of the Tenant, the Covenantor, the Landlord and any Mortgagee, as their respective interests may appear, shall take out and maintain at Tenant’s expense throughout the Term, including any extensions thereof, and during any other period in which the Tenant occupies any portion of the Demised Premises, in respect of the Demised Premises and the Tenant’s use and occupation thereof, with an insurance company or companies reasonably acceptable to the Landlord and containing an undertaking by the insurers to notify the Landlord and any Mortgagee in writing not less than thirty (30) days prior to any cancellation or termination thereof, policies of:

(i) insurance on the Demised Premises including the Leasehold Improvements, and the machinery, boilers and equipment contained therein and owned or operated by the Landlord or for which the Landlord is legally liable, against destruction or damage by fire and those additional perils covered by “All Risk” insurance on a stated amount basis for not less than one hundred (100) percent of the full replacement cost thereof;

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(ii) public liability including liquor liability, automobile liability, products and completed operations, bodily injury, property damage, contractual liability, owners’ and contractors’ protective insurance coverage with respect to the Demised Premises; and such policy shall (A) based on inclusive limit of not less than Twenty Five Million Dollars ($25,000,000); and (B) contain a severability of interest clause and a cross liability clause;

(iii) business interruption insurance in such amounts as required by the Landlord or its Mortgagee, acting reasonably, provided that such insurance will be for a period not less than twenty-four (24) months, and with a waiting period of not more than forty-eight (48) hours;

(iv) in addition to the above aforementioned policies of insurance, and during any such time as any alterations or work is being performed at the Demised Premises, Tenant shall cause each of its contractors and material subcontractors to carry, and shall deliver to Landlord at least ten (10) days prior to commencement of any such alteration or work, evidence of insurance with respect to (a) workers’ compensation insurance covering all persons employed in connection with the proposed alteration or work in statutory limits, (b) general/excess liability insurance, in an amount commensurate with the work to be performed but not less than $2,000,000.00 per occurrence and in the aggregate, for ongoing and completed operations insuring against bodily injury and property damage and naming all additional insured parties as outlined below and required of Tenant and shall include a waiver of subrogation in favor of such parties, (c) builders’ risk insurance (the “Builder’s Risk Insurance”), to the extent such alterations or work may require, on a completed value form including permission to occupy, covering all physical loss or damages to the real property, contents or materials, in an amount and kind reasonably satisfactory to Landlord, and (d) such other insurance, in such amounts as Landlord deems reasonably necessary to protect Landlord’s interest in the Premises from any act or omission of Tenant’s contractors or subcontractors; provided that the Tenant shall have the option to provide such insurance through a tenant controlled builder’s risk and wrap up policy providing the same coverage; and

(v) any other form or forms of insurance as the Landlord or any Mortgagee reasonably requires from time to time in form, in amounts and for insurance risks against which a prudent tenant would insure, provided such other insurance is consistent with the types of insurance maintained with respect to properties or businesses in British Columbia similar to the Demised Premises and the businesses conducted thereat.

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(b) The Tenant agrees that if the Tenant fails to take out or to keep in full force any such insurance referred to in this Section 9.1, and should the Tenant not rectify the situation within ten (10) days after written notice from the Landlord to the Tenant (stating if the Landlord or any Mortgagee does not approve of such insurance, the reasons therefor), the Landlord shall have the right, without assuming any obligation in connection therewith, to effect such insurance at the sole cost of the Tenant and all outlays by the Landlord, plus an administration fee of fifteen (15) percent of the actual cost thereof, shall be immediately payable by the Tenant to the Landlord as Additional Rent upon demand by Notice, without prejudice to any other rights and remedies of the Landlord under this Lease.

(c) The Tenant shall not keep or use in the Demised Premises any article which may be prohibited by any fire or other insurance policy in force from time to time covering the Demised Premises. If: (i) the conduct of business in the Demised Premises; or (ii) any acts or omissions of the Tenant in the Demised Premises or any part thereof (including the construction of any Alterations) cause or result in any increase in premiums for the insurance carried from time to time by the Landlord with respect to the Demised Premises, the Tenant shall pay any such increase in premiums. In determining whether increased premiums are caused by or result from the use or occupancy of the Demised Premises, a schedule issued by the organization computing the insurance rate on the Demised Premises showing the various components of such rate shall be conclusive evidence of the several items and charges which make up such rate.

(d) Each of the Tenant’s insurance policies shall name the Landlord and its Mortgagee as an additional insured, and its Mortgagee as mortgagee and loss payee under the “All Risk” property and equipment breakdown policies and shall be in such form, on such terms and with such insurers as are satisfactory to the Landlord, acting reasonably, and the insurers shall have an A.M. Best Insurance Reports rating of at least A-7 and be licensed to operate in British Columbia. The Landlord shall not be required to fulfill the Tenant’s obligations under policies in order to recover proceeds thereof. Without limiting the generality of the foregoing, each of the Tenant’s insurance policies shall contain: (i) the standard mortgage clause as may be required by any Mortgagee in connection with any property or equipment breakdown policy; (ii) a waiver by the insurer of any rights of subrogation to which such insurer might otherwise be entitled against the Landlord or any person for whom the Landlord is in law responsible; (iii) an undertaking by the insurer that no material change adverse to the Tenant or the Landlord or any Mortgagee in the policy will be made and the policy will not lapse or be terminated, except after the insurer has provided at least thirty (30) days’ Notice to the Tenant and the Landlord and to any Mortgagee; (iv) a provision stating that the Tenant’s insurance policy shall be primary and shall not call into contribution any other insurance available to the Landlord; (v) a joint loss endorsement, where applicable; (vi) a severability of interests clause and a

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cross-liability clause; and (vii) a waiver, in respect of the interests of any Mortgagee, of any provision with respect to any breach of any warranties, representations, declarations or conditions contained in the said policy. In addition, the Tenant will make reasonable commercial efforts to request a waiver in respect of the interests of the Landlord of any provision with respect to any breach of any warranties, representations, declaration or conditions contained in the said policy, but shall not be obligated to obtain same where its insurer refuses due to the Landlord being an additional insured on such policy.

(e) The Tenant shall send to the Landlord certificates of the Tenant’s insurance within five (5) Business Days of each renewal policy and of each new policy being issued, as well as within five (5) Business Days following request by Landlord.

9.2 Evidence of Tenant’s Insurance

All policies of insurance required to be maintained by the Tenant under the provisions of this Article 9 or certificates or interim binders therefor shall, upon request therefor, be delivered to the Landlord, together with evidence that the premiums therefor have been paid or provided for. Such policies shall have attached thereto endorsements stating that the same shall not be terminated or cancelled without thirty (30) days prior written notice to the Landlord.

9.3 Cancellation of Insurance

If any insurance policy carried by the Landlord upon the Demised Premises or any part thereof shall be cancelled or reduced below the requirements of this Lease by the insurer by reason of the use and occupation of the Demised Premises or any part thereof by the Tenant or by any assignee or subtenant of the Tenant or by anyone permitted by the Tenant to be upon the Demised Premises, and if the Tenant fails to remedy the condition giving rise to such cancellation or reduction of coverage within two (2) Business Days after notice thereof from the Landlord, the Landlord may, at its option, enter the Demised Premises and remedy the condition giving rise to such cancellation or reduction, and the Tenant shall forthwith pay the reasonable cost thereof, plus an administration fee equal to fifteen (15) percent of the actual cost thereof, to the Landlord, which cost may be collected by the Landlord as Additional Rent and the Landlord shall not be liable for any damage or injury caused to any property of the Tenant or of others located on the Demised Premises as a result of any such entry.

9.4 Landlord’s Right to Place Tenant’s Insurance

If the Tenant is unable to obtain, fails to maintain in force, or fails to pay any premiums for, any insurance required to be maintained by the Tenant under Section 9.1 hereof, then the Landlord, without prejudice to any of its other rights and remedies hereunder, shall have the right (on no less than twenty-four (24) hours’ Notice) but not the obligation to effect such insurance on behalf of the Tenant and the cost thereof and all other reasonable out-of-pocket expenses incurred by the Landlord in that regard, plus an administrative fee equal to fifteen percent (15%) of such costs and expenses, shall be paid by the Tenant to the Landlord forthwith upon demand by Notice as Additional Rent.

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9.5 Subrogation

All policies of insurance required to be maintained by Tenant hereunder shall contain a waiver of rights of subrogation as against the Landlord and its Mortgagee and cross liability provisions.

9.6 Insurance Proceeds

Subject to the provisions of Article 10 hereof and the consent of the Landlord’s and Tenant’s respective Mortgagees, as applicable, the proceeds of all policies of insurance required to be maintained by the Tenant covering destruction or damage to the Demised Premises, including any Leasehold Improvements shall be used as a trust fund towards the restoration and/or repairing thereof.

9.7 Indemnification of Landlord

The Tenant agrees that neither the Landlord nor any of the Landlord Parties shall be liable or responsible in any way for any for any injury or death to any person or for any loss or damage to any property at any time on or about the Demised Premises or any property on or about the Demised Premises owned by or being the responsibility of Tenant or any of the Tenant Parties, save and except to the extent of the willful and deliberate misconduct or Gross Negligence of the Landlord or any of the Landlord Parties. The Landlord shall in no event be liable for any indirect or consequential damages suffered by the Tenant or any of the Tenant Parties. Save and except to the extent that any losses, claims, actions, damages, liabilities and expenses are caused or contributed to by willful and deliberate misconduct or the Gross Negligence of the Landlord or any of the Landlord Parties, the Tenant will indemnify and save harmless the Landlord from and against any and all losses, claims, actions, damages, liabilities and expenses in connection with loss of life, personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Demised Premises, whether or not occasioned wholly or in part by any act or omission of the Tenant or any of the Tenant Parties, including without limitation, any default by Tenant under this Lease, including without limitation, failure to carry any insurance required under this Article 9. The Tenant shall also pay all reasonable costs and expenses and reasonable legal fees that may be incurred or paid by the Landlord in successfully enforcing the covenants and agreements in this Lease, unless a Court shall otherwise award.

9.8 Indemnification of the Tenant

Save and except to the extent that any losses, claims, actions, damages, liabilities and expenses are caused or contributed to by the act, omission, default or negligence of the Tenant or any of the Tenant Parties, and save to the extent covered by policies of insurance required hereunder to be maintained by Tenant (whether or not Tenant procures and maintains such policies), the Landlord will indemnify and save harmless the Tenant from and against any and all losses, claims, actions, damages, liabilities and expenses in

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connection with loss of life, personal injury and/or damage to property arising from or out of the willful and deliberate misconduct or the Gross Negligence of the Landlord or any of the Landlord Parties at the Demised Premises or any part thereof. The Landlord shall also pay all reasonable costs and expenses and reasonable legal fees that may be incurred or paid by the Tenant in successfully enforcing the covenants and agreements in this Lease, unless a Court shall otherwise award.

9.9 Mortgages Act

At the time of effecting the policies of insurance maintained under this Article 9, each of the Landlord and the Tenant, as the case may be, shall obtain from their respective Mortgagees whose interest is shown in such policy of insurance the written acknowledgment of such mortgagee to the effect that in the event the Lease is not terminated, and no Event of Default has occurred and is then continuing, the proceeds of such policy shall be applied to repair the injury with respect to which such insurance proceeds are payable or as otherwise provided in Article 10 below.

9.10 Blanket Policies/Deductibles

Notwithstanding anything contained in Section 9.1 to the contrary, the Landlord acknowledges and agrees that the Tenant shall be entitled to take out all insurance which it is required to take out pursuant to this Section 9.10 under blanket insurance policies so long as such policies otherwise comply with the other provisions of this Article 9, including allocations of insurance amounts to the Demised Premises so that all coverages required under the foregoing provisions are available. This exception shall not limit or diminish the Tenant’s other obligations contained in this Lease or in this Article 9. The deductible with respect to property insurance policies under clause (i) of Section 9.1(a) shall not exceed Fifty Thousand Dollars ($50,000) in the aggregate for such policies; provided, however, as to property insurance for the peril of flood, the deductible shall not exceed $100,000 per occurrence; and provided further, as to property insurance for the peril of Earthquake, the deductible shall not exceed the greater of $250,000 or ten percent (10%) of the applicable value per occurrence. There shall be no deductible or reimbursement clause greater than $50,000 with respect to the liability insurance policies under clause (ii) of Section 9.1(a). At Tenant’s request, but not more frequently than once every three (3) years, the foregoing deductible amounts shall be reviewed and may be revised based upon the recommendations of an independent insurance consultant selected by Landlord’s lender, and such revised amounts to otherwise be reasonably approved by Landlord.

9.11 Tenant’s Effect On Insurance

If there is an actual or threatened cancellation of or material adverse change in any policy of insurance of the Tenant on the Demised Premises by reason of anything done or permitted by the Tenant anywhere on the Demised Premises, and if the Tenant fails to remedy the situation giving rise to such actual or threatened cancellation or material change within two (2) Business Days after Notice from the Landlord, then the Landlord may but shall not be obligated to, at its option, remedy the situation giving rise to such

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actual or threatened cancellation or material adverse change, all at the sole cost of the Tenant, which, together with an administrative fee equal to fifteen percent (15%) of the costs and expenses incurred by Landlord in connection therewith, shall be paid by the Tenant to the Landlord forthwith upon demand by Notice as Additional Rent, and for such purpose the Landlord shall have the right to enter upon the Demised Premises without further Notice.

ARTICLE 10

DESTRUCTION AND DAMAGE

10.1 Damage to Demised Premises

If the Building or any other portion of the Demised Premises is damaged or destroyed, in whole or in part, by fire or any other occurrence, this Lease shall not be terminated and this Lease shall nonetheless continue in full force and effect and there shall be no abatement of any item included in Rent or Additional Rent except to the extent that the Landlord receives insurance proceeds in respect thereof from an insurance policy or policies for which the premiums had been paid by the Tenant, and the following provisions of this Article 10 shall apply.

10.2 Rights and Obligations Respecting Damage to the Demised Premises

If there is damage or destruction to the Building or any other portion of the Demised Premises (the “Damaged Premises”), the Tenant shall proceed to repair or rebuild the Damaged Premises and the Tenant shall repair or rebuild all Leasehold Improvements in a good and workmanlike manner all to the Building Standard. All insurance proceeds with respect to the Damaged Premises shall, so long as no Event of Default has occurred and is then continuing, be paid directly to the Tenant to complete such repairs or rebuilding; provided, however, Landlord’s Mortgagee may elect to collect and hold all such insurance proceeds so long as the Mortgagee agrees (so long as no Event of Default having occurred and then continuing) to disburse same to Tenant or its contractors or subcontractors in accordance with this Lease, but subject to such reasonable terms as Landlord or such Mortgagee may require, including but not limited to, the remainder of undistributed insurance proceeds being sufficient to pay for all remaining hard and soft costs of such restoration and replacement, receipt of draw requests and lien waivers in customary form and receipt of endorsements to the Mortgagee’s title insurance policy with respect to its Mortgage, as the Mortgagee may reasonably require. For the avoidance of doubt, all insurance proceeds in respect of any personal property or asset of the Tenant or business interruption or liability coverage with respect to the Tenant shall also be paid directly to the Tenant and the Landlord and its Mortgagee shall have no interest thereto. The Landlord shall also agree with any of its Mortgagees that all such insurance proceeds be used as aforesaid.

10.3 Tenant Right to Terminate

Notwithstanding any other provisions of this Article 10, if all or any material part of the Demised Premises are rendered untenantable by damage from fire or other casualty and if

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such damage, in the reasonable opinion of the Architect (which opinion will be delivered by the Architect to the Landlord and the Tenant within thirty (30) days of the date of the damage), has destroyed at least fifty percent (50%) of the Building and all such damage cannot be substantially repaired under Applicable Laws with reasonable diligence within twenty four (24) months from the date of such damage and receipt of all necessary permits, then Tenant shall have the right to elect to terminate this Lease by written notice delivered to the Landlord not more than twenty (20) days after receipt of the Architect’s opinion, failing which Section 10.2 shall apply. In the event that the Tenant elects to terminate this Lease as aforesaid, the Tenant acknowledges that all insurance proceeds with respect to any damage or destruction of the Demised Premises or part thereof (including, without limitation, all Leasehold Improvements and Alterations, but excluding Tenant’s Trade Fixtures), shall become the absolute property of the Landlord and if paid to or received by the Tenant shall be immediately paid over and remitted to the Landlord. Any termination by the Tenant pursuant to this Section 10.3 shall be subject to and shall only be effective upon the receipt in full by the Landlord of the insurance proceeds (including, without limitation, all proceeds of the rental interruption insurance) with respect to such damage and destruction, plus the amount of any deductible under any such policies.

For the purposes of this Section 10.3, “untenantable” in the case of the Demised Premises means unusable for the purposes of carrying on business as contemplated by the provisions of this Lease and, without limiting the generality of the foregoing, if access to the Demised Premises is materially interfered with for a period likely to exceed two (2) years, then the Demised Premises shall be deemed to be wholly untenantable.

ARTICLE 11

QUIET ENJOYMENT

11.1 Quiet Enjoyment

Subject to the Landlord’s rights and remedies in respect of any default of the Tenant hereunder, the Landlord covenants with the Tenant for quiet enjoyment and in respect of any right of entry provided for herein (including without limitation, Sections 6.1(c), 7.1(h), 13.1(a) and
14.1(c)).

ARTICLE 12

DEFAULT

12.1 Default

Upon an Event of Default the then current and the next three (3) months’ Rent (together with applicable Sales Tax with respect thereto) shall be forthwith due and payable and the Landlord shall have the right, subject to Gaming Authority Requirements, to immediately distrain for same (but shall not distrain prior thereto) and, in addition to any other rights to which the Landlord is entitled hereunder or at law, the Landlord shall, subject to Gaming Authority Requirements, have the following rights, which are cumulative and not alternative, namely:

(a) to terminate this Lease;

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(b) as agent of the Tenant to release the Demised Premises and take possession of any property thereon and store, sell or dispose of same, and to make alterations to the Demised Premises to facilitate their reletting, all of the foregoing being at the Tenant’s expense and risk;

(c) to remedy any default of the Tenant and, in such case, the Tenant shall pay to the Landlord forthwith upon demand by Notice all reasonable costs of the Landlord in remedying or attempting to remedy any such default plus 15% of such costs for administration; and

(d) to obtain all damages, losses and costs from the Tenant including, if this Lease is terminated, all deficiencies between all amounts which would have been payable by the Tenant for what would have been the balance of the then scheduled Term, but for such termination, and all net amounts actually received by the Landlord for reletting the Demised Premises for such period, after deducting all costs of reletting and alterations to the Demised Premises to facilitate their reletting, and any legal expenses incurred as a result of such default.

12.2 Allocation

The Landlord may, when the Tenant is in default, allocate payments received from the Tenant among items of Rent and Sales Tax then due and payable by the Tenant as the Landlord in its sole discretion may determine. No acceptance by the Landlord of payment by the Tenant of any amount less than the full amount payable to the Landlord, and no direction or other written instruction respecting any payment by the Tenant, shall be deemed to constitute payment in full of any obligation of the Tenant.

12.3 Landlord Repairs

Should the Landlord elect to re-enter the Demised Premises, it may, without terminating this Lease, subject to Gaming Authority Requirements, make such alterations or repairs as may be reasonably required to re-let the Demised Premises for any term or terms and at such rentals and upon such terms as the Landlord in its sole discretion deems advisable. Any such rentals received by the Landlord shall be applied first to the payment of the Landlord’s reasonable out-of-pocket costs and expenses incurred with respect to such re-entry and re-letting, and then to the Rent due hereunder by the Tenant to the Landlord, however no such re-entry or re-letting shall be construed to be an election by the Landlord to terminate this Lease unless the Landlord shall have notified the Tenant in writing of such election.

12.4 Distress

The Tenant waives and renounces the benefit of any present or future Act of the Province of British Columbia (other than Gaming Authority Requirements) taking away or limiting the Landlord’s right of distress and notwithstanding any such Act, the Landlord may, subject to the rights of any mortgagee or lessor of the Tenant’s goods and chattels, and

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subject to Gaming Authority Requirements, distrain upon and sell all of the Tenant’s goods and chattels for arrears of Rent as might have been done if such Act had not been passed. The Tenant further agrees that if it leaves the Demised Premises leaving any Rent or Sales Tax owing under this Lease unpaid, the Landlord, in addition to any remedy otherwise provided by law, may, subject to Gaming Authority Requirements, distrain upon the goods and chattels of the Tenant at any place to which the Tenant or any other person may have moved them, in the same manner as if the goods and chattels had remained and been distrained upon the Demised Premises, subject to the rights of any mortgagee or lessor of the Tenant’s goods and chattels.

12.5 Condoning

Any condoning, excusing or overlooking by either party hereto of any default, breach or non-observance by the other party at any time or times in respect of any covenant, proviso or condition herein contained shall not operate as a waiver of any rights hereunder in respect of any existing or subsequent default, breach or non-observance.

12.6 Landlord’s Right to Cure Tenant’s Defaults

In addition to all other rights of Landlord set forth elsewhere in this Lease, the Tenant agrees that if the Tenant shall fail to pay any amounts or charges required to be paid under this Lease by the Tenant when any of the same become due, or in any other respect shall fail to perform any covenant or agreement in this Lease contained on the part of the Tenant to be performed, then and in such event after the continuance of any such failure or default for thirty (30) days after notice in writing thereof (or such shorter period of time as may be set forth elsewhere in this Lease as to such default) shall be given by the Landlord to the Tenant, notwithstanding any delay or forbearance in the giving of such notice, the Landlord may pay all or any part thereof, or cure such default, all on behalf, and at the expense, of the Tenant. The Landlord may further do all necessary work and make all necessary payments in connection therewith including, without limitation, any solicitor’s fees, costs and charges of or in connection with any legal action which may have been brought. The Tenant agrees to pay to the Landlord forthwith upon demand by Notice any amount so paid by the Landlord, together with an administration fee equal to 15% of such amount (but only to the extent the Tenant is not otherwise required to pay a similar administration fee in respect of any such amount pursuant to any other provision of this Lease), as Additional Rent. All sums charged to the Tenant by the Landlord hereunder shall be deemed to be indebtedness of the Tenant to the Landlord payable on demand and collectable in the same manner as Rent hereunder.

12.7 Arrears of Rent

If the Tenant shall fail to pay, when same is due and payable, any Rent or Sales Tax, such unpaid Rent (and Sales Tax) shall bear interest from the due date thereof to the date of payment at the prime demand commercial lending rate (the “Prime Rate”) of the Landlord’s principal banker (which shall be a Canadian chartered bank), plus five (5%) percent per annum (“Applicable Interest”). In addition, if any installment of Rent or Sales Tax is not paid when due within five (5) days of the date due, Tenant shall pay to

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Landlord, on demand by Notice, a late charge equal to three percent (3%) of the late amount. The late charge is not intended as a penalty but is intended to compensate Landlord for the extra expense Landlord will incur to send out late notices and handle other matters resulting from the late payment. Notwithstanding Section 5.6, this Section 12.7 shall not apply to amount or amounts where the Landlord has separately charged a fifteen (15%) percent administration fee in respect thereof pursuant to the terms of this Lease.    

12.8 Bankruptcy and Insolvency

(a) The Tenant hereby waives any right it, or any person on its behalf, may have to disclaim, repudiate, terminate or compromise this Lease pursuant to any bankruptcy, insolvency, winding-up or other creditors proceeding, including, without limitation, the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada) (“Insolvency Proceedings”) and agrees that in the event of any such proceeding the Landlord will comprise a separate class for voting purposes. Further, the Tenant agrees that the obligations and liabilities of the Tenant under this Lease shall not be released or discharged or otherwise affected by the bankruptcy, winding up, liquidation, dissolution or insolvency of the partnership constituting the Tenant or any partner thereof or by change in the constitution of such partnership.

(b) The Tenant agrees that if this Lease is ever surrendered, rejected, disclaimed, repudiated or terminated in any way by or on behalf of a Transferee pursuant to any bankruptcy, insolvency, winding-up or other creditors’ proceeding, including any proceeding under the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada), the Tenant shall nonetheless remain responsible for fulfillment of all obligations of the Tenant hereunder for what would have been the balance of the Term but for such surrender, rejection, disclaimer, repudiation or termination and shall, upon the Landlord’s request, enter into a new lease of the Demised Premises for such balance of the Term and otherwise on the same terms and conditions as in this Lease subject to such amendments hereto to which the Tenant had agreed at any time prior to such surrender, rejection, disclaimer, repudiation or termination, and with the exception that the Tenant will accept the Demised Premises in “as is” condition.

ARTICLE 13

MISCELLANEOUS

13.1 Access to Demised Premises

(a) Without limiting any other rights the Landlord may have pursuant hereto or at law, the Landlord shall have the right, subject to the terms of this Lease and Gaming Authority Requirements, upon twenty-four (24) hours prior Notice or, if there are extenuating circumstances which require longer than twenty-four (24) hours’ prior Notice, such longer period of time as may be reasonable in the circumstances (except always in the case of an Emergency Event) but subject

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always to the Tenant’s reasonable security and health and safety requirements, to enter the Demised Premises at any time and from time to time: (i) in cases of an Emergency Event; (ii) to show the Demised Premises to prospective purchasers and lenders and, during the last twenty-four (24) months of the Term if a right or further right of extension has not been exercised, to prospective tenants; (iii) to view the state of repair of the Demised Premises and perform appraisals, do inspections and in connection with any sale or mortgage of the property, such other due diligence matters as may be reasonably required; and (iv) to exercise any of the Landlord’s rights available to or perform any of the Landlord’s obligations pursuant to this Lease.

(b) The Landlord shall exercise its rights pursuant to Subsection 13.1(a) in such manner and at such times as the Landlord, acting reasonably but in its sole discretion, shall determine but using reasonable commercial efforts to minimize any disruption with the Tenant’s (or any subtenant’s) business operations on the Demised Premises. The Landlord agrees that it shall provide reasonable prior Notice, except in the case of a real or anticipated emergency in which case no notice shall be required and such entrance shall be subject to the Tenant’s reasonable security and health and safety requirements.

13.2 Short Form of Lease

The parties hereto agree to execute a Short Form of Lease for registration purposes. Such Short Form of Lease shall set forth a description of the Demised Premises the Term (including options to renew), and any other provision hereof, as either party may request, subject to the reasonable approval of the Landlord. Upon expiration or earlier termination of this Lease, the Tenant shall, forthwith at its own cost cause such Short Form of Lease to be discharged from title, failing which the Landlord shall be authorized to do so as attorney for the Tenant, and all costs thereof together with an administrative fee equal to fifteen percent (15%) thereof shall be forthwith paid to Landlord by the Tenant.

13.3 Notices

Any Notice, demand, request, approval, designation and other communication desired, required, authorized or permitted to be given or made hereunder either by the Landlord to the Tenant or by the Tenant to the Landlord shall be in writing and shall be given by personal delivery or by registered, prepaid post mailed in Canada, addressed, return receipt requested:

(a) In the case of the Landlord, to: [●NTD: Vendor to provide]

Attention: ●

(b) In the case of the Tenant to:

Attention: Tolek M. Strukoff, Chief Legal Officer & Corporate Secretary and Brad Bardua, Chief Financial Officer

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with a copy to:

Bennett Jones LLP

Suite 3400, 1 First Canadian Place

P. O. Box 130

Toronto, ON M5X 1A4

Attention:        Simon P. Crawford

Either party may, by notice as aforesaid, designate a different address or addresses for notices, demands, requests or communications to it. Any notice given as aforesaid shall be conclusively deemed to have been received on the date of such personal delivery (provided such day is a business day and if not then on the next business day) or on the third business day following the mailing thereof, as the case may be. In the event of a labor dispute, postal interruption or a reasonable anticipation thereof, all notices required to be given under this Lease shall be delivered personally. A business day shall be a day other than a Saturday, Sunday and statutory holiday.

13.4 Liens

The Tenant shall promptly pay all charges for work, materials, supplies and services performed or supplied in respect of the Demised Premises. If any lien is made, filed or registered against the Lands or Building for work done in respect of the Demised Premises, the Tenant shall discharge or vacate at the Tenant’s expense. If the Tenant fails to discharge or vacate as aforesaid, then, in addition to any other right or remedy of the Landlord, the Landlord may, but it shall not be obligated to, vacate same by paying the amount claimed to be due into Court and the amount so paid by the Landlord and all costs and expenses, including reasonable solicitor’s fees, incurred for the discharge of such lien plus an administrative fee equal to fifteen percent (15%) shall be immediately due and payable by the Tenant to the Landlord as Additional Rent on demand by Notice.

13.5 Title

The Landlord represents and warrants as a condition hereof that as of the Lease Commencement Date it shall be the owner of the Lands. Provided further, that the Landlord covenants and agrees with the Tenant not to give or register any further encumbrances against the Lands, other than any Freehold Mortgage, until such time as the Tenant has registered a Short Form of Lease in accordance with Section 13.2 hereof.

13.6 Subordination/Non-Disturbance

This Lease and the Tenant’s rights shall, at the option of the Landlord, be subject to and subordinate to any Freehold Mortgage or any part thereof now or in the future in accordance with the terms of this Section. [NTD: Cascades only: The Landlord shall cause the Cascades Lands Strata Lots Landlord’s Assignment to be acknowledged in writing by the Freehold Mortgagee, and to cause such Freehold Mortgagee to agree to be bound by Cascades Lands Strata Lots Landlord’s Assignment] The Tenant, on Notice from the Landlord or the Freehold Mortgagee shall attorn to and

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become a tenant of the Freehold Mortgagee upon the same terms and conditions as are set forth in the Freehold Mortgagee’s standard form attornment agreement. The Tenant shall execute an instrument or instruments and use commercially reasonable efforts to cause its Mortgagees to execute an instrument or instruments, and the Landlord shall use its commercially reasonable efforts to cause the Freehold Mortgagee to execute an instrument or instruments, confirming such subordination substantially in the form attached hereto as Schedule “G” (the “Subordination/Non-Disturbance Agreement”), with such changes as may reasonably be requested by the Freehold Mortgagee and the Tenant’s Mortgagees. To the extent required by the Tenant from time to time, so long as no Event of Default has occurred and is then continuing, the Landlord agrees to provide to any subtenant under a sublease of the Demised Premises entered into in accordance with this Lease with a landlord non-disturbance agreement in the form attached hereto as Schedule “H” (the “Sublease Acknowledgment”), so long as (i) the subtenant is not an Affiliate of Tenant or Covenantor, (ii) the sublease in question is on market terms (including without limitation, ongoing rents thereunder) and was entered into in good faith by Tenant, (iii) the term (including all possible extensions thereof which the subtenant may elect to use) of such sublease does not extend beyond the then scheduled expiration of the Term of this Lease, (iv) the use of the subleased premises is consistent with (and does not breach the terms of) this Lease, and (v) the sublease does not constitute or result in a Transfer. [Schedule H, as with other Schedules, to be negotiated. However, Landlord will not be responsible to pay a sublessee any tenant improvement allowances, refurbishment allowances, moving expenses, initial build-out costs or similar cash incentives; provided, if Landlord does not make such payments, the sublessee may offset up to 75% of monthly base rent until such amounts are recovered.] Where the Landlord has entered into a Mortgage that requires the consent or approval of the Freehold Mortgagee to a matter in the same manner (that is, with the same standard of required discretion in granting such consent or approval) as is afforded to the Landlord in this Lease (a “Back to Back Approval Right”), then the Landlord shall not be in breach of this Lease for failing to give such consent or approval if its Freehold Mortgagee has failed to give such consent or approval pursuant to the Back to Back Approval Right. Notwithstanding the foregoing, where the Freehold Mortgagee is withholding or refusing to give such consent or approval in violation of such Back to Back Approval Right the Landlord will use commercially reasonable efforts to enforce such Back to Back Approval Right provision of the Mortgage against the Freehold Mortgagee.

13.7 Estoppel Certificates

The Tenant agrees that it will at any time and from time to time, upon not less than ten (10) days’ prior written notice, execute and deliver to the Landlord a statement in writing certifying that, this Lease is unmodified and in full force and effect (or, if modified, stating the modifications and that same is in full force and effect, as modified), the amount of the Rent then being paid hereunder, the dates to which same, by installment or otherwise, and other sums herein provided to be paid by the Tenant, have been paid, the particulars and amount of insurance policies on the Demised Premises in which the Tenant’s or Landlord’s or a Mortgagee’s interest is noted, that Tenant is not in default under this Lease (or if it is in default, stating the particulars), that Covenantor is not in

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default under the Covenant Agreement (or if it is in default, stating the particulars), stating, to Tenant’s knowledge, whether or not there is any existing default by Landlord under this Lease (and if so, setting forth the particulars to Tenant’s knowledge of them); and stating to Tenant’s knowledge as to any other matters reasonably requested by Landlord. The Landlord agrees that it will, at any time and from time to time, upon not less than ten (10) days’ prior written notice, execute and deliver to the Tenant a similar statement stating, in addition, whether or not there is, to Landlord’s knowledge, any existing default on the part of the Tenant, if any insurance with respect to the Demised Premises is carried separately by Landlord, the particulars and amount of such Landlord insurance policies on the Demised Premises in which the Landlord’s and the Tenant’s interest is noted and the amount, to Landlord’s knowledge, of arrears, if any, of Rent herein provided to be paid by the Tenant. Any such statement delivered pursuant to the provisions of this Section 13.7 may be conclusively relied upon by any purchaser or prospective purchaser or any Mortgagee or prospective Mortgagee of the fee or leasehold or any prospective assignee, sub-lessee or other transferee, save as to any default on the part of the Landlord or the Tenant of which the party giving such statement does not have notice at the date thereof.

13.8 Registration and Property Transfer Tax

The Tenant shall be solely responsible for and shall pay all property transfer tax, duties or similar impositions (if any) which may become payable as a result of this Lease or registration thereof or registration of any options to extend the term hereof or other rights with respect hereto, whether in connection with the registration of a Short Form of Lease or another instrument or otherwise.

13.9 GST Registration

The Landlord covenants that it is a registrant pursuant to the Excise Tax Act (Canada) and shall provide the Tenant with satisfactory evidence thereof prior to the Commencement Date.

13.10 Expropriation

If the respective interests of the Landlord or the Tenant in this Lease or the Demised Premises or any part thereof shall be Expropriated then Rent hereunder shall not abate, and the Landlord shall be entitled to all awards, remedies or compensation available to the Landlord or the Tenant for any loss, cost or damages which may be compensable by any Governmental Authority as a result of the Expropriation by any such Governmental Authority of the respective interests of the Landlord or the Tenant, as applicable, in this Lease and the Demised Premises or any part thereof. Notwithstanding the foregoing, if all or any part of the Demised Premises are Expropriated such that all or substantially all of the business and operations of the Tenant are or will be materially impaired or reduced as a consequence thereof, then the Tenant may, in its sole and absolute discretion, have the right to terminate this Lease by written notice delivered to the Landlord no later than twenty (20) days after receipt of the notice of expropriation, which termination shall be effective on such date as the Tenant determines, but not less than one (1) Business Day

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following such notice of termination is received by Landlord; provided, after receipt of such notice of termination from Tenant the Term of the Lease will terminate no later than the effective date of the Expropriation. In the event that the Tenant elects to terminate this Lease as aforesaid, the Tenant shall be liable for Rent only to the date of such termination. The Tenant and the Landlord each may, upon notice to the other at its sole cost and expense contest any threatened or filed Expropriation proceedings with respect to this Lease and the Demised Premises or any part thereof. The Landlord and the Tenant, each acting reasonably, shall cooperate with each other and keep each informed of all matters relating to any contest of Expropriation proceedings.

13.11 Overholding

If the Tenant remains in the Demised Premises or any part thereof after the expiration or other termination of the Term:

(a) Without the consent of the Landlord, no yearly or other periodic tenancy shall be created but the Tenant shall be bound by the terms and provisions of this Lease insofar as the same are applicable to a month to month tenancy except any options to review hereby granted to the Tenant and except the Annual Rent which shall be one hundred and twenty-five percent (125%) of the rate provided for herein for the then final year of the Term.

(b) With the prior written consent of the Landlord, and agreement as to the Rent payable, the tenancy shall be month to month at one hundred and twenty-five percent (125%) the Rent agreed and otherwise on the terms and conditions of this Lease but without any option to extend, it being understood and agreed that, so long as the Landlord and the Tenant are in good faith negotiating the renewal or extension of the Term or a new lease for a further term, the Tenant shall be deemed to be occupying the Demised Premises with the consent of the Landlord.

13.12 Relationship

Nothing herein shall be deemed or construed by the parties hereto as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of Rent nor any other provision herein shall create or be deemed to create any relationship between the parties other than that of landlord and tenant.

13.13 Delays

Whenever, and to the extent that either party hereto shall be unable to fulfill, or shall be delayed or restricted in the fulfillment of any obligation hereunder, or the doing of any work or the making of any repairs, by reason of Unavoidable Delay, then, except as herein provided, such party shall, so long as any such impediment exists, be relieved from the fulfillment of such obligation and the other party shall not be entitled to compensation for any damage, inconvenience, nuisance or discomfort thereby occasioned. This provision shall not apply in respect of any matters of a financial nature including, without limitation, interim or permanent financing of the Demised Premises or the payment of Rent by the Tenant.

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13.14 Captions

The captions and article numbers appearing in this Lease are inserted only as a matter of convenience of reference only and in no way define, limit, amplify, construe or describe the scope or intent of such articles.

13.15 Confidentiality

The Landlord will keep confidential all information obtained by it from the Tenant with respect to the Demised Premises except such information which:

(a) is generally available to the public, other than as a result of a disclosure by the Landlord;

(b) is made available to the Landlord on a non-confidential basis from a source other than the Tenant or its representatives;

(c) which becomes public through no fault or act of the Landlord;

(d) is required to be disclosed by Law or by the rules, orders or regulations of any stock exchange or governmental regulator or to enforce any of the Landlord’s rights hereunder, at law, in equity or by statute; and/or

(e) is received in good faith from a third party lawfully in possession of the information and not, to the knowledge of the Landlord, in breach of any confidentiality obligations.

The Landlord further agrees that such confidential information will be disclosed only to its Affiliates and to those of its Affiliates and employees, advisors, investors, lenders, and prospective purchasers of the Demised Premises or prospective assignees of the Landlord’s interest in this Lease, and respective representatives thereof who need to know such information for the purposes of evaluating and implementing this Lease and the Tenant’s obligations hereunder. Nothing herein contained shall restrict or prohibit the Landlord from disclosing the confidential information to the Landlord’s advisors in connection with the services of such Persons relating to the Lease including, without limitation, the financing or potential financing or sale or potential sale (as permitted by this Lease), of the Demised Premises, provided the Landlord shall apprise such Person of the confidential nature of the confidential information and the Landlord will use all commercially reasonable efforts to cause the Landlord’s advisors to comply with such confidentiality obligations.

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13.16 Arbitration

Any dispute, controversy or claim arising out of or in connection with, or relating to, this Lease, or the performance, breach, termination or validity thereof, shall be finally settled by arbitration, and the following provisions shall apply:

(a) A Party before instituting arbitration proceedings hereunder shall negotiate and act reasonably with a view to resolving the dispute by agreement between the Parties.

(b) Either Party may initiate arbitration within a reasonable time after any such dispute, controversy or claim has arisen by delivering a written demand for arbitration upon the other Party.

(c) Forthwith after the giving of such Notice, the parties or their designated representatives shall meet in good faith for the purpose of agreeing, or attempting to agree, upon an arbitration procedure. If such agreement is arrived at, the matter in dispute shall be arbitrated and settled in accordance with the agreed procedure (and which agreed procedure shall be reduced to writing signed by each of the parties, failing such agreement the matter shall be arbitrated and settled in accordance with the procedure set out in Section 13.16(d).

(d) The Parties recognize that, in many instances of disputes which might arise under this Lease, the dispute may involve, and depend for its resolution upon, technical matters or matters which involve expert knowledge and judgment, where it is in the interests of a prompt and equitable solution of the matter for the Parties to agree upon an independent experienced and recognized expert having the appropriate specialized knowledge as the sole arbitrator. In any such situation the Parties shall negotiate in good faith and act reasonably with a view to reaching agreement upon an appropriate independent expert as a sole arbitrator. If such a sole arbitrator is agreed upon by the Parties, the dispute shall be arbitrated and determined in accordance with the procedure set forth below in this Section 13.16.

(e) such sole arbitrator shall proceed to determine the dispute, having regard to the provisions of this Lease and the terms of the submission to arbitration and any other agreements the parties may have had respecting the arbitration or the matter in dispute;

(f) the arbitrator shall conduct the arbitration in accordance with the laws of British Columbia and the provisions of the Arbitration Act (British Columbia), except where amended by this Lease or any other agreement of the Parties. Provided, however, that the agreement between the parties is permitted by the Arbitration Act (British Columbia);

(g) the costs of the arbitration shall be awarded in the discretion of the sole arbitrator; and

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(h) the parties agree that it is important to them that any dispute arising under this Lease be determined in an expeditious manner while, at the same time, affording both Parties the opportunity to present their case properly and to respond the case of the other Party. To this end, when the arbitrator has been appointed, the Parties by their counsel shall meet and agree upon the steps and process to be followed leading up to the arbitration hearing and a reasonable but effective Schedule for the completion of each step. In the event that the parties are unable to make such an agreement, they shall seek an interim hearing with the arbitrator, who, after hearing submissions of counsel for both sides, shall make an interim award setting out the procedural steps and process for the conduct of the arbitration, appropriate timelines for the completion of each step by each Party, and setting out the dates when the arbitration hearing shall take place.

(i) The arbitrator shall be appointed jointly by agreement between the Parties, failing which either Party may apply to a judge in accordance with of the Arbitration Act (British Columbia) for an order appointing an arbitrator.

(j) The arbitrator shall have the authority to award any remedy or relief that a court could order or grant in accordance with this Lease, including, without limitation, specific performance or any obligation created under this Lease, the issuance of any interim, interlocutory or permanent injunction, the imposition of sanctions for abuse or frustration of the arbitration process, dismissal of a claim by either party or a defense by either party for want of prosecution or lack of diligence in moving to the arbitration hearing. In particular, an arbitrator shall have authority to award pre-judgment and post-judgment interest on any award for the payment of money and in connection of any award in the nature of a declaration related to payments under this Lease. Such pre-judgment interest in respect of an award in the nature of a declaration relating to payments under this Lease shall accrue on the day on which such payments were payable. Such pre-judgment and post-judgment interest shall be at the Prime Rate plus 2% applicable from time to time. The arbitrator shall include an award for such pre-judgment and post-judgment interest in the final award.

(k) A Party shall be entitled to prejudgment and post judgment interest on any award for the payment of money and in connection with any award in the nature of a declaration relating to payments under this Lease. Such prejudgment interest in respect of an award in the nature of a declaration relating to payments under this Lease shall accrue from the date on which such payments were payable. Such prejudgment and post judgment interest shall be at the Prime Rate plus 2% applicable from time to time. The arbitrator or arbitrators, as the case may be, shall include an award for such prejudgment and post judgment interest in his, her or their final award.

(l) The provisions of this Lease and of this Section 13.16 requiring the determination of certain disputes by arbitration shall not operate to prevent recourse to the courts by any party as permitted by the Arbitration Act (British Columbia) or whenever enforcement of an award by the sole arbitrator or arbitrators, as the case may be,

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reasonably requires access to any remedy (such as mandamus, injunction, specific performance, declaration of right, order for possession, damages or judicial enforcement) which an arbitrator has no power to award or enforce. In all other respects an award by the sole arbitrator or arbitrators, as the case may be, shall be final and binding upon the parties and there shall be no appeal from the award of the arbitrator or arbitrators, as the case may be, on a question of law or any other question. Nothing in this provision or Lease shall be construed as to prevent any party from applying to a judge for interim or interlocutory relief in an urgent situation to preserve the status quo and/or prevent irreparable harm.

(m) Notwithstanding that arbitration proceedings may have been commenced or that a dispute is being negotiated, the Tenant shall continue to pay all Rent, including, without limitation, all amounts which are the subject of dispute, based upon the Landlord’s estimate or re estimate of same (except where otherwise provided in this Lease) until the dispute is finally determined and comply with all its obligations under the Lease.

13.17 OFAC

Tenant represents, warrants and covenants that none of Tenant, Covenantor or any of their respective partners, officers, directors, members (i) is or will be listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, United States Department of the Treasury (“OFAC”) pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (“Order”) and all applicable provisions of Title III of the USA Patriot Act (U.S. Public Law No. 107-56 (October 26, 2001)); (ii) is or will be listed on the Denied Persons List and Entity List maintained by the United States Department of Commerce; (iii) is or will be listed on the List of Terrorists and List of Disbarred Parties maintained by the United States Department of State, (iv) is or will be listed on any other publicly available list of terrorists, terrorist organizations or narcotics traffickers maintained by the United States Department of State, the United States Department of Commerce or any other governmental authority or pursuant to the Order, the OFAC Rules and Regulations (including without limitation the Trading with the Enemy Act, 50 U.S.C. App. 1-44; the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06; the unrepealed provision of the Iraq Sanctions Act, Publ. L. No. 101-513; the United Nations Participation Act, 22 U.S.C. § 2349 as-9; The Cuban Democracy Act, 22 U.S.C. §§ 6001-10; The Cuban Liberty and Democratic Solidarity Act, 18 U.S.C. §§ 2332d and 233; and The Foreign Narcotic Kingpin Designation Act, Publ. L. No. 106-120 and 107-108, all as may be amended from time to time); or any other applicable requirements contained in any enabling legislation or other Executive Orders in respect of the Order (the Order and such other rules, regulations, legislation or orders are collectively called the “Orders”); (v) is or will be engaged in activities prohibited in the Orders; or (vi) has or will be convicted, pleaded nolo contendere, indicted, arraigned or custodially detained on charges involving money laundering or predicate crimes to money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes or in connection with the Bank Secrecy Act (31 U.S.C. §§ 5311 et. Seq.).

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13.18 Financial Reporting

Tenant shall deliver to Landlord, within one hundred twenty (120) calendar days after the close of each fiscal year of Tenant, financial statements of Tenant (and if Tenant has interests in gaming operations or other businesses other than those at the Demised Premises, with a breakdown by location in reasonable detail), including at minimum a balance sheet and statement of income and expense, for such year prepared in accordance with IFRS generally accepted accounting principles consistently applied. Tenant shall cause to be delivered to Landlord, within one hundred twenty (120) calendar days after the close of each fiscal year of Covenantor, consolidated audited financial statements of Covenantor for such year prepared in accordance with IFRS generally accepted accounting principles consistently applied. In addition, Tenant shall deliver (or shall cause to be delivered) to Landlord, within ninety (90) calendar days after the close of each fiscal quarter of Tenant or Covenantor, as applicable:

(a) Tenant’s quarterly financial statements for such fiscal quarter then ended, including a balance sheet, income statement, cash flow statement (on a year-to-date basis), and a copy of any narrative from management of Tenant that is provided to Tenant’s primary lender, if available;

(b) Covenantor’s quarterly financial statements for such fiscal quarter then ended, including a balance sheet, income statement, cash flow statement (on a year-to-date basis), and a copy of any narrative from management of Covenantor that is provided to Covenantor’s lenders;

(c) Quarterly and year-to-date property level performance metrics including gaming revenue, non-gaming revenue, and facility development commissions revenue, property net income, and Adjusted Property EBITDA (as defined below), together with a copy of any narrative from management;

(d) Quarterly financial statements, reporting revenues, expenses and other results of operations by each operating department in customary hotel reporting format for the just-completed quarter and year-to-date and a comparison of actual results to the operating budget and the results for the corresponding quarter and year-to-date in the prior fiscal year; and

(e) Compliance certificates (each in the form attached as Schedule         ) certified by the Chief Financial Officer of the Covenantor for the three month periods ending on each of March 31, June 30, September 30 or December 31 of any year.

In addition to the foregoing, Tenant shall provide to Landlord, within ten (10) Business Days after request, such other information with respect to Tenant’s or Covenantor’s financial condition as Landlord may reasonably request from time to time. All financial statements shall include a complete comparison with the figures for the preceding year (or as to quarterly financial reports, comparisons with the same quarter or the preceding year), and all unaudited financial statements shall be certified by the chief financial officer of Tenant (or such other similar financial officer of Tenant or Covenantor, as applicable) as being true and correct in all material respects. Audited financial statements shall be accompanied by a copy of the audit report from the auditors.

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For purposes hereof, (x) “Adjusted Property EBITDA” means the Adjusted EBITDA for each operating segment before corporate costs; and (y) “Adjusted EBITDA” means EBITDA plus (i) share-based compensation (ii) (gain)/loss on sale of property and equipment, (iii) restructuring, acquisition, transaction, financing and other costs, (iv) write-down of non-financial assets, (v) changes in fair value of the embedded derivatives, (vi) change in fair value of cross currency interest rate swaps, (vii) foreign exchange (gain)/loss, (viii) loss on debt extinguishment, (ix) non-cash deferred rent, and (x) tax adjustments for prior periods.

13.19 Financial Covenant

Commencing with the four (4) trailing Fiscal Quarters (taken as a single period) ending December 31, 2018, the Tenant shall not permit the Covenantor’s Total Net Leverage Ratio, computed as of the last day of any period of four (4) trailing Fiscal Quarters (taken as a single period) to be greater than 7:00:1.00 (the “Financial Covenant”):

For the purposes of this Section 13.19, the following terms shall have the following meanings:

(a) “Cage Cash” means, at any time, the aggregate amount of cash float held by, or for the account of, the Tenant or Covenantor that is maintained for the purpose of making change, redeeming chips and paying winnings to any Person entitled thereto in connection with the slot machines, table games and other lottery and related promotional schemes conducted, managed and operated by the Tenant or Covenantor in its casinos. For certainty, Cage Cash does not include any cash float that is supplied by, or the property of, a Gaming Authority.

(b) “Capital Lease Obligations” means of any Person the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under IFRS and, for purposes hereof, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with IFRS; provided that any obligations that would not be accounted for as Capital Lease Obligations under IFRS as of the date of this Lease shall not be included in Capital Lease Obligations after the date of this Lease due to any changes in IFRS or interpretations thereunder or otherwise.

(c) “Cash Equivalents” means at any date of determination, any of the following:

(i) Canadian dollars, U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by it from time to time in the ordinary course of business;

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(ii) securities issued or directly and fully guaranteed or insured by the U.S. government, the Canadian government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million and whose long-term debt is rated “A” or the equivalent thereof by DBRS, Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(iv) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(v) commercial paper issued by a corporation (other than an Affiliate of the Covenantor) rated at least “Al” or the equivalent thereof by DBRS, Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

(vi) readily marketable direct obligations issued by any state of the United States of America, province of Canada or any political subdivision thereof having one of the two highest rating categories obtainable from either DBRS, Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(vii) Indebtedness issued by Persons (other than any shareholder of the Tenant or the Covenantor or any of their respective Affiliates) with a rating of “A” or higher from S&P, “A2” or higher from Moody’s or “A” or higher from DBRS (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

(viii) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

(d) “Consolidated Adjusted EBITDAR” means the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(i) Consolidated Taxes; plus

(ii) Fixed Charges; plus

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(iii) Consolidated Depreciation and Amortization Expense; plus

(iv) Consolidated Non-cash Charges; plus

(v) the sum of any rent deducted in determining Consolidated Net Income for such period; plus

(vi) any expenses or charges (other than Consolidated Depreciation and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness (including a refinancing thereof) (whether or not successful), including (i) any amendment or other modification of the Secured Notes or other Indebtedness, (ii) any additional interest in respect of the Secured Notes and (iii) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus

(vii) expenses or fees (other than Consolidated Depreciation and Amortization Expense) incurred in connection with restructurings or other non-recurring transactions (including, without limitation, casino opening costs); plus

(viii) the amount of management, monitoring, consulting, transaction and advisory fees, and related expenses paid to the any shareholders of the Tenant or Covenantor (or any accruals relating to such fees and related expenses) during such period; plus

(ix) the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus

(x) any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Covenantor or net cash proceeds of an issuance of Equity Interests of the Covenantor (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; less, without duplication,

(xi) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced Consolidated Adjusted EBITDAR in any prior period and any items for which cash was received in a prior period).

(e) “Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including the depreciation of property, plant and equipment, the amortization of intangible assets, deferred financing fees and amortization of

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unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with IFRS.

(f) “Consolidated Net Income” means , with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that:

(i) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

(ii) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded;

(iii) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Covenantor) shall be excluded;

(iv) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedge Agreements or other derivative instruments shall be excluded;

(v) the Net Income for such period of any Person that is not a Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person thereof in respect of such period;

(vi) any non-cash tax expense arising pursuant to IFRS shall be excluded;

(vii) any impairment charges or asset write-offs, in each case pursuant to IFRS, and Consolidated Amortization Expense shall be excluded;

(viii) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, Preferred Stock or other rights shall be excluded;

(ix) any (a) one-time non-cash compensation charges, (b) costs and expenses after the date of execution of the Lease related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the date of execution of this Lease of officers, directors and employees, in each case of such Person or any of its Subsidiaries, shall be excluded;

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(x) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any realized or unrealized net loss or gain resulting from hedging transactions for currency exchange or interest rate risk, shall be excluded; and

(xi) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded.

(g) “Consolidated Non-cash Charges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with IFRS, but excluding, for the avoidance of doubt, any non-cash rent included in the amount added back pursuant to clause (v) of the definition of Consolidate Adjusted EBITDAR above; provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated Adjusted EBITDAR in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.

(h) “Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) taken into account in calculating Consolidated Net Income.

(i) “Disqualified Stock” means any Equity Interests of such person that, by their terms (or by the terms of any security into which such Equity Interests are convertible or for which such Equity Interests are redeemable or exchangeable), or upon the happening of any event or condition, (a) mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control, Qualified IPO or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control, Qualified IPO or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are convertible or exchangeable for Indebtedness or

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Disqualified Stock, or (c) are redeemable at the option of the holder thereof, in whole or in part, in each case prior to 91 days following the latest Maturity Date at the time of issuance of such Equity Interests; provided, however, that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that if such Equity Interests are issued to any employee or to any plan for the benefit of employees of the Covenantor or its subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by the Covenantor in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided further, however, that any class of Equity Interests of such person that by its terms authorizes such person to satisfy its obligations thereunder by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.

(j) “Earn-Outs” means any consideration in connection with an acquisition that is in any way contingent on the performance of the business being acquired.

(k) “Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

(l) “Fiscal Quarter” means the three month period ending on any of March 31, June 30, September 30 or December 31 of any year.

(m) “Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

(i) Consolidated Interest Expense of such Person for such period, and

(ii) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

(n) “Hedge Agreements” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, in each case, not entered into for speculative purposes.

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(o) “Indebtedness” means, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person issued or assumed as the deferred purchase price of property or services, (d) all guarantees by such Person of Indebtedness described in the other clauses of this definition of other Persons, (e) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of (i) the fair market value (as determined in good faith by the Covenantor) of such asset at such date of determination, and (ii) the amount of such Indebtedness of such other Person, (f) all Capital Lease Obligations of such Person, (g) all net payment that such Person would have to make in the event of an early termination, on the date Indebtedness of such Person is being determined, in respect of outstanding Hedge Agreements, (h) the principal component of all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit, (i) the principal component of all obligations of such Person in respect of bankers’ acceptances, and (j) the principal amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference of such Disqualified Stock and (k) the sum of any rent paid during the period (except for any rent in respect of a Capital Lease Obligation) multiplied by eight (8); provided that Indebtedness shall not include (i) current trade liabilities and current intercompany liabilities (other than any refinancings, extensions, renewals, or replacements thereof) incurred in the ordinary course of business, (ii) prepaid or deferred reserve, (iii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the seller of such asset, (iv) Earn-Outs (until such obligations become a liability on the balance sheet of such Person in accordance with IFRS), (v) Obligations under or in respect of Qualified Receivables Financings, (vi) any amounts relating to employee consulting arrangements entered into in the ordinary course of business, accrued expenses, deferred rent, deferred taxes, obligations under employment agreements and deferred compensation arrangements in each case entered into in the ordinary course of business, or (vii) any Gaming Authority’s share of gaming win arising at any Gaming Facility owned, managed or operated by the Covenantor or any of its Subsidiaries.

(p) “Lien” means with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, encumbrance, charge, assignment by way of security or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities (other than securities representing an interest in a joint venture that is not a subsidiary), any purchase option, call or similar right of a third party with respect to such securities; provided that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.

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(q) “Net Income” means, with respect to any Person, the net income (loss) of such person, determined in accordance with IFRS.

(r) “Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

(s) “Qualified IPO” means an underwritten public offering of the Equity Interests of the Covenantor or any parent entity of the Tenant that generates gross cash proceeds of at least C$50,000,000, other than a public offering pursuant to a registration statement on Form S-4 or Form S 8.

(t) “Qualified Receivables Financings” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(i) the Board of Directors of the Covenantor shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Covenantor and the Receivables Subsidiary;

(ii) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at fair market value (as determined in good faith by the Covenantor); and

(iii) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Covenantor) and may include Standard Securitization Undertakings.

The grant of a security interest in any accounts receivable of the Covenantor or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure the Obligations, Indebtedness in respect of the Secured Notes or any Refinancing Indebtedness with respect to the Secured Notes shall not be deemed a Qualified Receivables Financing.

(u) “Standard Securitization Undertakings” means representations, warranties, covenants, indemnities, guarantees of performance entered into by the Covenantor or any Subsidiary which the Covenantor has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being under that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

(v) “Total Net Leverage Ratio” means the ratio of (i) Indebtedness of the Covenantor and its Subsidiaries (net of unrestricted cash and Cash Equivalents of the Covenantor and its Subsidiaries, except Cage Cash) to (ii) Consolidated Adjusted EBITDAR of the Covenantor for the trailing four Fiscal Quarter period ending on the most recent Fiscal Quarter.

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13.20 Existing Leases

Landlord and Tenant acknowledge that the landlord’s interest in the leases described on Schedule “I” (the “Existing Leases”) were not assigned to Landlord in connection with its acquisition of the Demised Premises. Landlord and Tenant agree that the Existing Leases constitute Permitted Encumbrances. Landlord and Tenant further agree that (i) upon the expiration of the term of each of the Existing Leases (including any extension options set forth therein), any replacement lease with respect to a portion of the Demised Premises that is the subject of an Existing Lease shall be made, if at all in Tenant’s discretion, as a sublease directly with Tenant, and shall not be made as a direct lease of a portion of the Demised Premises with Landlord; (ii) Tenant shall remain liable to the tenants under the Existing Leases for all lessor’s obligations thereunder; and (iii) Tenant shall perform all of the lessor’s obligations thereunder at timely manner.

ARTICLE 14

ENVIRONMENTAL MATTERS

14.1 Environmental Contaminants

(a) The Tenant covenants with the Landlord that the Tenant shall not use or permit or suffer the use of the Demised Premises or any part thereof to generate, manufacture, refine, treat, transport, store, handle, dispose of, transfer, produce or process any Environmental Contaminant except in compliance with all Environmental Laws. In the event any Environmental Contaminant is discovered on or about the Demised Premises that is not in compliance with Environmental Laws (whether or not such Environmental Contaminant existed on the Lease Commencement Date), or the Tenant otherwise fails to comply with any such Environmental Laws (except insofar as such compliance requirement relates to conditions in, on or under the Demised Premises which were caused by the Landlord or those for whom the Landlord is in law responsible from and after the Lease Commencement Date, other than Tenant and other Tenant Parties) following thirty (30) days’ prior Notice or such shorter period as may be prescribed by Law or, in the event of a real or apprehended emergency, without Notice, the Landlord may, but shall not be obligated to, do such things as necessary to effect such compliance, and all reasonable costs and expenses including reasonable consultants fees and solicitors fees on a solicitor and its own client or full indemnity basis incurred by the Landlord in so doing shall be payable forthwith by the Tenant to the Landlord as Additional Rent; provided that if the Tenant at all times uses commercially reasonable efforts to materially comply with Environmental Laws, the Tenant shall be permitted such longer period of time as may reasonably be required in the circumstances if such compliance could not reasonably be effected within such thirty (30) day notice period and provided the Tenant has commenced to effect such compliance within such thirty (30) day notice period and proceeds thereafter diligently and continuously to effect such compliance (and provided that such longer period of time is permitted by the Authorities having jurisdiction).

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(b) If at any time required by any Governmental Authority pursuant to any Environmental Laws (except insofar as such compliance requirements relates to conditions in, on or under the Demised Premises first existed after the Lease Commencement Date and which were caused by the Landlord or those for whom the Landlord is in law responsible, other than Tenant or other Tenant Parties), the Tenant shall take all required remedial action required in respect of any Environmental Contaminant, in, on, under or about the Demised Premises or emanating therefrom that is not in compliance with Environmental Laws, including, without limitation, any repairs or replacements to the Demised Premises or any buildings or other Leasehold Improvements in or on the Demised Premises and the removal, treatment, disposal, restoration and replacement of the soil or any other part of the Premises in order that the Demised Premises shall at all times comply with all Environmental Laws.

(c) The Landlord shall, subject to any Gaming Authority Requirements and the Tenant’s reasonable security and health and safety requirements and subject to reasonable prior Notice being given and during business hours (or at any time and without Notice in the case of a real or apprehended emergency), be entitled from time to time to inspect the Demised Premises and to conduct such other investigations as it reasonably deems necessary for the purpose of satisfying itself as to compliance by the Tenant with all Environmental Laws which the Tenant is required to comply with pursuant to the provisions of this Lease. The Landlord shall, at its sole expense, promptly restore the Demised Premises to the state in which they existed prior to such physical inspections being undertaken by the Landlord, without recovery from the Tenant, unless the Tenant is found to be in breach of Environmental Laws and such inspections shall be at the Landlord’s sole expense unless the Tenant is in breach of Environmental Laws, in which case the Tenant shall be responsible for the cost of such inspection and any required re-inspections to confirm the Tenant’s compliance.

14.2 Notification of Environmental Contaminants

Each Party shall notify the other as soon as reasonably possible in the event that it receives notice from any Governmental Authority of any violation of any Environmental Law in respect of any Environmental Contaminant in, on or near the Demised Premises, and notify the other as reasonably possible of any discharge, release or discovery of any Environmental Contaminant in or on any part of the Demised Premises coming to its attention.

14.3 Ownership of Environmental Contamination

All Environmental Contaminants held, released, spilled, abandoned or placed on or about the Demised Premises or released (whether prior to, on or after the Lease Commencement Date) by the Tenant or any other Tenant Parties or any other Person other than Landlord into the environment shall be and remain the property of the Tenant and not the Landlord regardless of any affixation of such Environmental Contaminants to the Demised Premises.

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14.4 Environmental Indemnity

The Tenant shall indemnify and save harmless the Landlord against any and all liabilities, claims, damages, interest, penalties, fines, monetary sanctions, losses, costs and expenses whatsoever, including without limitation costs of professional advisors and consultants and experts in respect of investigation, remedial action and clean-up costs and expenses, arising in any manner whatsoever out of:

(a) any breach by the Tenant or any other Tenant Party of Article 14 of this Lease; and

(b) any act or omission of any Persons on the Demised Premises prior to or during the Term or any use or occupancy of or anything in, on, under or about the Demised Premises prior to or during the Term resulting in a breach of Environmental Laws, including, without limitation, the generating, manufacture, refinement, treatment, transportation, storage, handling, disposal, transfer, production or processing of any Environmental Contaminants by the Tenant or any other Person in, on, under or about the Demised Premises other than in compliance with Environmental Laws.

ARTICLE 15

INTERPRETATION

15.1 Governing Law

The provisions hereto shall be interpreted according to the laws of the Province of British Columbia.

15.2 Time of Essence

It is understood and agreed by the parties hereto that time shall in all respects be of the essence hereof, provided that the time for doing or completing any matter provided for herein may be extended or abridged by an agreement in writing signed by the Landlord and the Tenant.

15.3 Net Lease

Without limiting the provisions of Section 2.1 above, the Tenant acknowledges that it is intended that this Lease shall be a completely carefree and net lease to the Landlord, save as otherwise provided for in this Lease. The Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature arising from or relating to the Demised Premises, except as covenanted by the Landlord under this Lease, and save as aforesaid, the Tenant shall pay all charges, Taxes, costs and expenses relating to the Demised Premises, including all Taxes legislated from time to time as payable by a tenant or landlord of rental properties and the Tenant covenants with the Landlord accordingly.

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15.4 Severability

The invalidity or unenforceability of any provision of this Lease shall not affect the validity or enforceability of any other provision, but shall be deemed to be severable, except where such invalid or unenforceable provision or covenant is a material obligation of a party hereto or a material condition hereof.

15.5 Modifications

No supplement, modification or amendment to this Lease or purported waiver of any provision of this Lease shall be binding, unless executed by the party to be bound thereby, and no such waiver shall constitute a waiver by such party of any other provision or a continuing waiver, unless otherwise expressly provided.

15.6 Set-Off

The Tenant may not set-off, deduct, withhold, abate or compensate against the Rent, or against any other sum payable by the Tenant to the Landlord, any amount payable by the Landlord hereunder or under any other lease or agreement to the Tenant.

15.7 Currency

All references in this Lease to dollar amounts shall be deemed to be expressed in Canadian dollars.

15.8 Entire Agreement

This Lease contains the entire agreement between the parties hereto and there is no condition, warranty or covenant between the parties hereto affecting the Demised Premises, except as otherwise set out herein.

15.9 Further Assurances

Each party will from time to time at the reasonable request of the other party hereto execute and deliver such instruments and take such further action as may be required to accomplish the purposes of the Lease.

15.10 Successors

This Lease shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

ARTICLE 16

STRATA PROPERTY PROVISIONS

[NTD: This Article 16 is for the Cascades Lease only.]

[NTD: Boughton to review strata property provisions on behalf of Mesirow and to provide comments, ensuring the mutual agreement of the parties (i) that all costs

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associated with Cascades are the responsibility of the Tenant; (ii) that to the extent that authority is delegated to the Tenant for governance purposes, such authority is used in a manner consistent with requirements of the lease, including using commercially reasonable efforts to cause the Strata Corporation to take actions as would be required of Tenant if the property were not subject to the strata regime; and to refrain from acting in any way that would, if it were Tenant and the property were not subject to the strata regime, constitute a default hereunder; (iii) as to the manner in which insurance/expropriation proceeds for the strata corporation are to be applied; (iv) as to the insurance policies carried by the Strata Corporation; (v) that notwithstanding delegated authority, the documents governing the strata corporation are not to be amended without Landlord’s prior written consent; (vi) that the standards of maintenance and replacement comports with the standards otherwise applicable hereunder, (vii) that the Tenant shall not exercise its rights so as to obligate Landlord with respect to any period after the then scheduled expiration or termination of this Lease, and (viii) Tenant shall, at its expense, cause the Demised Premises to be in compliance with the strata regime and the Landlord to be in compliance with the strata regime (absent the willful misconduct or gross negligence of the Landlord or other Landlord Parties).]

16.1 Cascades Lands Strata Lots

The provisions of this Article 16 apply only to the tenancy of the Cascades Lands Strata Lots and not to the tenancy of the Cascades Office Building Lands.

16.2 Cascades Lands Strata Lots Landlord’s Assignment

(a) The Landlord confirms that it has executed and delivered to the Tenant the Cascades Lands Strata Lots Landlord’s Assignment. Except to Landlord’s Mortgagee (or its designee), the Landlord shall not assign, delegate or otherwise grant any power, duty or right, including a voting right, to any Person, including without limitation a mortgagee, that conflicts with or derogates from the terms of the Cascades Lands Strata Lots Landlord’s Assignment [NTD: if an Event of Default exists, voting must revert to Landlord (or its designee) upon Landlord’s election].

(b) If the Tenant effects a Transfer, in accordance with Article 8, the Landlord shall on the Tenant’s request execute and deliver in favour of the applicable Transferee an assignment of landlord’s powers and duties under the Strata Property Laws substantially in the form of the Cascades Lands Strata Lots Landlord’s Assignment.

(c) The Tenant shall comply with all applicable Strata Property Laws and the Bylaws concerning the Tenant’s use of the Demised Premises and Common Property (including the Limited Common Property).

(d) If the Landlord’s consent or approval is required under this Lease, then it shall be reasonable for Landlord to withhold such consent or approval if consent or

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approval is also required of the Strata Corporation in accordance with Strata Property Laws or the Bylaws and the Landlord is unable to obtain such consent or approval after using good faith efforts to obtain such consent. [NTD: the only scenario in which this should arise is where there is a requirement for a ³⁄₄ or unanimous vote at a AGM or SGM and the City of Langley, as the owner of the convention centre (SL3), votes against the Landlord.]

16.3 Common Property

Subject to the provisions of the Strata Property Laws and the Bylaws, the Tenant shall have for itself, its guests and invitees, and any Person for whom the Tenant is legally responsible, the non-exclusive right to use the Common Property (including any Limited Common Property designated for the use of a Cascades Lands Strata Lot), in common with all other Persons entitled thereto.

16.4 Strata Fees and Special Levies

(a) The Tenant shall pay to the Strata Corporation on a timely basis the Strata Fees then payable by the Landlord, but without duplication to any other Additional Rent paid or payable by the Tenant to the Landlord.    

(b) The Tenant shall also be responsible for paying (or causing to be paid) on a timely basis any Special Levy or other amounts due to the Strata Corporation from the Landlord or the Tenant or any of the other Tenant Parties.

(c) If any amounts paid by Tenant could be deemed to give rise to Sales Tax obligations, Tenant to pay that as well to the Person receiving or which is deemed to have received such payment, as applicable.

16.5 Expansion Facility

The Tenant may only construct an Expansion Facility on the Cascades Lands Strata Lots or Common Property (including the Limited Common Property) in accordance with and subject to Section 2.2, if and to the extent permitted to do so under the Strata Property Laws and the Bylaws.

16.6 Repairs and Maintenance

(a) The Tenant’s rights under Article 6 are all subject to applicable Strata Property Laws and the Bylaws, including obtaining at the Tenant’s expense all required Strata Corporation approvals. [Are not all of Tenant’s rights under this Lease subject to applicable Strata Property Laws and the Bylaws?]

(b) If and to the extent that the Strata Corporation is required to perform any maintenance, repairs or replacements to the Demised Premises, then the Tenant shall be relieved of its obligations under Article 6 to effect the applicable maintenance, repairs or replacements to the Demised Premises, provided that the Tenant has used diligent efforts and provided adequate funds to cause the Strata

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Corporation to effect any such maintenance, repair or replacement (including without limitation, through exercise of governance rights), and in such event the failure of or delay by the Strata Corporation to fulfill its maintenance, repair or replacement obligations shall not be considered a default by the Tenant of its obligations under this Lease so long as Tenant continues such diligent efforts and funding.

16.7 Alterations

The Tenant’s rights and obligations under Article 7 are subject to the applicable Strata Property Laws and the Bylaws, including obtaining at the Tenant’s expense all required Strata Corporation approvals.

16.8 Insurance

(a) The Tenant’s rights and obligations under Article 9 are all subject to applicable Strata Property Laws and the Bylaws.

(b) If and to the extent that the Strata Corporation is responsible, under Applicable Laws and the Bylaws, for obtaining any of the insurance described in Article 9, then the Tenant shall be relieved of its obligations under Article 9 to obtain the corresponding insurance coverage and in such event the failure of the Strata Corporation to obtain and maintain such insurance coverage shall not be considered a default by the Tenant of its obligations under this Lease.

16.9 Destruction and Damage

(a) The Tenant’s obligations under Article 10 are all subject to Strata Property Laws and the Bylaws.

(b) If and to the extent that the Strata Corporation is required to repair or rebuild any of the Damaged Premises, the Tenant shall be relieved of its obligations under Article 10 to effect the applicable repairs or rebuilding of the Damaged Premises provided that the Tenant has used diligent efforts, and provided adequate funds to cause the Strata Corporation to effect any such repairs and rebuilding (including without limitation, through exercise of governance rights), and in such event the failure of or delay by the Strata Corporation to fulfill its repair and rebuilding obligations shall not be considered a default by the Tenant of its obligations under this Lease so long as Tenant continues such diligent efforts and funding to cause Strata Corporation to timely repair and rebuild in a manner and timing consistent with this Lease for the portion of the Demised Premises not subject to [the Strata regime].

(c) If only Common Property (including Limited Common Property) is damaged or destroyed, in whole or in part, by fire or any other occurrence (the “Damaged Common Property”), then this Lease shall not be terminated and it shall

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nonetheless continue in full force and effect and there shall be no abatement of any item included in Rent, except to the extent that the Landlord receives insurance proceeds in respect thereof, either directly, or through amounts collected by the Strata Corporation and paid to Landlord (which payments Tenant shall have no right to receive).

(d) The Tenant shall have no responsibility to repair or rebuild any Damaged Common Property, unless the Tenant is required to do so pursuant to Strata Property Laws or the Bylaws and if so required then Section 10.2 shall apply as if the Damaged Common Property were Damaged Premises. [Again, to the extent tenant has practical control, this can’t be an “out” for Tenant.] .

(e) [Tenant cannot terminate this Lease (or have an abatement of Rent) if the Property is rebuilt, without regard to time limits or severity of destruction.]

16.10 Paramountcy

In the event of any conflict or inconsistency:

(a) firstly, between the terms of this Lease and Strata Property Laws or the Bylaws, the Strata Property Laws and the Bylaws shall prevail [subject to . . . use of Tenant’s governance rights, etc.]; and

(b) secondly, between the provisions of this Article 16 and the provisions included in the remainder of this Lease, the provisions of this Article 16 shall prevail.

[●LANDLORD]
Per:
	Name:
	Title:
Per:
	Name:
	Title:

- 73 -

[●TENANT]
Per:
	Name:
	Title:
Per:
	Name:
	Title:

- 74 -

SCHEDULE “A”

LEGAL DESCRIPTION FOR DEMISED PREMISES

[●NTD: There will be three separate leases, one for each of the three properties. Applicable legal description to be inserted into each applicable lease]

Part A

A-1 Grand Villa Casino / Hotel - 4331 Dominion Street, Burnaby, BC

Parcel Identifier: 026-658-038

Lot 1 District Lot 70 Group 1 NWD Plan BCP21069

A-2 Grand Villa Casino Parking Structure - 4320/4350 Dominion Street, Burnaby

Parcel Identifier: 003-517-918

Lot A, Except: Firstly; The East 569.25 feet, Secondly; Portions in Plan LMP32853, Thirdly; Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 9892

Part B

B-1 Star Light Casino - 350 Gifford Street, New Westminster, BC

Parcel Identifier: 026-069-903

Lot 1 District Lot 758 Group 1 NWD Plan BCP13760 Except Part Subdivided by Plan BCP35830

B-2 Vacant Lot Next To Starlight Casino - 3811 Boundary Road, Richmond, BC

Parcel Identifier: 001-109-022

Parcel 61 District Lot 757, 758 and 6883 Group 1 NWD Plan 64783, Except: Firstly; Part Highway on Plan 74380, Secondly; Part shown as 0.0802 hectares on Plan 74467, Thirdly; Part Highway on Plan LMP23314, Fourthly: Part shown as 0.4163 hectares on Plan 74467, Fifthly; Part in Plan BCP13760; Sixthly; Part Subdivided by Plan BCP43137

Part C

C-1 Cascades Casino - #1 - 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-552

Strata Lot 1 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-2 Cascades Casino Hotel #2 - 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-561

Strata Lot 2 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-3 Office Building next to Cascade Casino/Hotel - 20389 Fraser Highway, Langley, BC

Parcel Identifier: 024-760-579

Parcel A District Lot 309 Group 2 NWD Plan LMP45619

- 2 -

SCHEDULE “B”

FIXTURES TO BE EXCLUDED FROM LEASEHOLD IMPROVEMENTS

1. Specialty light fixtures

2. Office cubicles and fixtures

3. Telecommunications antennas, servers and related equipment owned by third parties including such items owned by Telus, Rogers, Wind Mobile, Shaw Cablesystems and Netcetera.

4. Garbage compactors leased from third parties (including Envirowaste Solutions)

5. Table games and systems, slot machines, servers and systems, signage and all other property owned by BCLC as set out in the relevant casino operating agreement from time to time (excluding any cabling infrastructure)

6. ATMs and similar cash dispensing machines, including, without limitation, ticket redemption machines, change machines and similar

7. leased food services equipment, quick service food equipment, dishwashers, ice machines, glass washers, vending machines, beverage dispensing or other equipment that are owned by third parties or is subject to proprietary rights (including license or franchise rights) of third parties (such as Starbucks)

8. Computers, key cabinets, data switching equipment, AV Equipment, AV production equipment, and servers, including without limitation, those that constitute a part of the security/surveillance systems (excluding data and server racks and cabling/wiring infrastructure)

9. Exterior signage

10. For clarity, all vaults that are bolted to or physically integrated into the Building shall be considered Leasehold Improvements

SCHEDULE “C”

MAJOR SUPPLIER, MAJOR CUSTOMER OR COMPETITOR OF THE TENANT

“Competitor” means any competitor (whether direct or indirect) of Gateway Casinos & Entertainment Limited (or any successor thereof) that exists from time to time, including, but not limited to, the following Persons:

Gaming & Entertainment Operators:

1. Great Canadian Gaming Corporation

2. Paragon LLC

3. Gaming & Leisure Properties Inc.

4. Caesars Entertainment

5. River Cree Casino

6. Gamehost Inc.

7. Pure Canadian Gaming

Hotel Owners or Hotel Operators:

1. InterContinental Hotels Group.

2. Fairmont Raffles Hotel International

3. Hilton Canada Co.

4. Starwood Hotels & Resorts Worldwide

5. Wyndham Hotel Group.

6. Best Western International

7. Choice Hotels Canada Inc.

8. Four Seasons Hotels and Resorts

9. Innvest REIT

10. American Hotels Income Properties REIT

11. Crescent Hotels & Resorts Canada

12. Hyatt Hotels

13. Marriott Hotels

“Major Supplier” means any significant supplier of gaming supplies and/or gaming services to Gateway Casinos & Entertainment Limited (or any successor thereof) that exists from time to time, including, but not limited to, the following Persons:

Major Suppliers:

1. Scientific Games

2. International Gaming Technology

- 2 -

SCHEDULE “D”

FORM OF LANDLORD LENDER AGREEMENT

TO:	BNY TRUST COMPANY OF CANADA, in its capacity as collateral agent (the “First Lien Collateral Agent”) pursuant to the Credit Agreement (as defined below)
AND TO:	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as collateral agent (the “Second Lien Collateral Agent” and collectively with the First Lien Collateral Agent, the “Collateral Agents”) pursuant to the Note Indenture (as defined below)
AND TO:	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as indenture trustee (the “Canadian Trustee”) pursuant to the Note Indenture
AND TO:	COMPUTERSHARE TRUST COMPANY, N.A., in its capacity as indenture trustee (together with the Canadian Trustee, the “Trustees”) pursuant to the Note Indenture
AND TO:	[●] (the “Tenant”)
AND TO:	GATEWAY CASINOS & ENTERTAINMENT LIMITED, in its capacity as the beneficial tenant under the Lease (as defined below) (“Gateway”)
AND TO:	BRITISH COLUMBIA LOTTERY CORPORATION (the “BCLC”)

WHEREAS:

A.        The Tenant is the tenant under the lease described in Schedule “A” (the “Lease”) and [●] (the “Landlord”) is the Landlord, which Lease is held by the Tenant for the purposes of carrying on the business operations located on the leasehold premises as described in the Lease (the “Leased Premises”).

B.        Pursuant to a credit and guaranty agreement dated as of February 22, 2017 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among, inter alios, Gateway, the sole shareholder of the Tenant, as borrower, Bank of Montreal, as the Administrative Agent (as defined in the Credit Agreement), the First Lien Collateral Agent, as collateral agent, the subsidiary guarantors named therein, the initial lender parties named therein, and the other parties from time to time party thereto, Gateway obtained financing by way of first lien credit facilities and, as required thereunder, the Tenant granted a mortgage or mortgages by way of sublease of the leasehold interest of the Tenant to the First Lien Collateral Agent, for and on behalf of the Secured Parties (as defined in the Credit Agreement) by way of a debenture dated [·], 20[●] in the principal sum of US$1,000,000,000 granted by the Tenant in favour of the First Lien Collateral Agent (the “First Lien Mortgage”).

C.        Pursuant to a note indenture dated as of February 22, 2017 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Note Indenture”) among, inter alios, Gateway, the Second Lien Collateral Agent and the Trustees, Gateway obtained financing by way of a second lien note offering and, as required thereunder, the Tenant granted a mortgage or mortgages by way of sublease of the leasehold interest of the Tenant to the Second Lien Collateral Agent, for and on behalf of the noteholders under the Note Indenture, by way of a debenture dated [●], 20[●] in the principal sum of US$1,000,000,000 granted by the Tenant in favour of the Second Lien Collateral Agent (the “Second Lien Mortgage” and together with the First Lien Mortgage, the “Mortgages”).

D.        Pursuant to that certain Landlord BCLC Agreement made as of [●], 20[●] (as amended, amended and restated, supplemented, modified, assigned or replaced from time to time, including any New Tri Party Agreement (as defined therein), the “Tri Party Agreement”) between the Tenant, Gateway, the BCLC and the Landlord, the parties thereto, among other things, acknowledged the BCLC’s ownership of the BCLC Property (as defined therein) and agreed to certain step-in rights and remedies and assumption of Lease rights and options in favour of the BCLC and certain other covenants with respect to the BCLC Property (the “Step-in Rights”) with respect to the Lease and the Leased Premises.

E.        In consideration of, and as a condition of, the Landlord granting its consent to the Mortgages, the Trustees, the Collateral Agents, Gateway and the Tenant have agreed to enter into this Agreement with the Landlord.

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the Landlord hereby:

1. Consents

The Landlord:

(a) hereby consents to the granting by the Tenant of the First Lien Mortgage to the First Lien Collateral Agent, and any trustees, co-trustees, collateral co-agents, collateral subagents or attorney-in-fact appointed by the First Lien Collateral Agent pursuant to the terms of the Credit Agreement, for and on behalf of the Secured Parties (as defined in the Credit Agreement), such First Lien Mortgage to be registered on title to the Leased Premises, in the principal sum of U.S.$1,000,000,000.00 granted by the Tenant in favour of the First Lien Collateral Agent, on the terms and conditions set out in this Agreement; and

(b) hereby consents to the granting by the Tenant of the Second Mortgage to the Second Lien Collateral Agent, and any trustees, co-trustees, collateral co-agents, collateral subagents or attorney-in-fact appointed by the Second Lien Collateral Agent pursuant to the terms of the Note Indenture, for and on behalf of the purchasers under the Note Indenture, such Second Lien Mortgage to be registered on title to the Leased Premises, in the principal sum of U.S.$1,000,000,000.00 granted by the Tenant in favour of the Second Lien Collateral Agent, on the terms and conditions set out in this Agreement.

2. Controlling party

As used herein, “Controlling Party” means the First Lien Collateral Agent; provided however that at such time as the First Lien Collateral Agent has provided the Landlord with a written notice that the First Lien Collateral Agent has ceased to be the “Controlling Party” hereunder (such notice to be given in accordance with an intercreditor agreement dated as of on or about February 22, 2017 (as amended, amended and restated, supplemented, modified, assigned or replaced from time to time) between the First Lien Collateral Agent and the Second Lien Collateral Agent, being the “Controlling Party Notice”), “Controlling Party” means the Second Lien Collateral Agent. It is understood and agreed that the Landlord shall rely exclusively on a Controlling Party Notice as to the determination whether the First Lien Collateral Agent or the Second Lien Collateral Agent is the Controlling Party hereunder and shall be under no obligation to make any independent investigation thereof

3. Representations and Warranties

The Landlord warrants and represents to the Collateral Agents that as of the date hereof:

(a) the Lease is in good standing and has not been amended other than as set forth in the attached Schedule “A”;

(b) there has been no prepayment of rent under the Lease except in accordance with the terms thereof, if any;

(c) there are no rental arrears outstanding under the Lease; and

(d) the Landlord has not determined to act or given notice of its intention to act upon any default under the Lease.

4. Covenants

The Landlord covenants and agrees to and with the Collateral Agents that notwithstanding anything to the contrary contained in the Lease:

(a) until the Collateral Agents advise the Landlord that the Mortgages are no longer in effect, the Landlord will give notice to the Collateral Agents of any breach by the Tenant or default of or under the terms of the Lease (which notice shall include copies of any notices sent to the Tenant in respect of such breach or default) upon which the Landlord proposes to act and which would give rise to a right in the Landlord to terminate the Lease or otherwise forfeit the term thereof;

(b) the Landlord will allow the Controlling Party a period of not less than ten days after receipt of notice pursuant to paragraph 4(a) hereof to cure any such breach or default (provided that nothing in this Agreement will obligate the Controlling Party to cure any such breach or default, and further provided that the Controlling Party will have no liability to cure any default of the nature described in paragraph 4(d) hereof, and the provisions of that paragraph will apply to any such

default), and no exercise by the Landlord of any of its rights or remedies against the Tenant consequent upon such breach or default will be effective against the Tenant or the Collateral Agents or deprive the Collateral Agents of their security unless the Landlord has given such notice and allowed such curing period;

(c) with respect to breaches or defaults other than defaults of the nature described in paragraph 4(d) hereof, if such breach or default is remedied within the period referred to in paragraph 4(b) hereof, the Landlord will not by reason thereof terminate the Lease, and the Landlord will have no other rights with respect to such breach or default. The Landlord acknowledges that any such remedy by the Controlling Party shall be without further obligation or liability of such Controlling Party with respect to any of the obligations of the Tenant under the Lease;

(d) in the event of the bankruptcy, insolvency, receivership or winding-up of the Tenant, appointment of a receiver of all or substantially all of the property mortgaged under the Mortgages or of any assignment for the benefit of the creditors of the Tenant or of any execution, attachment or distress or similar process taking effect against any of the assets of the Tenant or upon the occurrence of any similar event or in the event of any other default of a similar nature under the terms of the Lease, the Landlord will not exercise any right under the Lease to terminate the Lease or otherwise forfeit the term thereof if, within ten days of notice of any such events, the Controlling Party or any receiver or receiver-manager appointed by the Controlling Party or any permitted assignee of the Lease brings any rental arrears into good standing and thereafter maintains the Lease in good standing and cures any breach of any of the covenants in the Lease upon which the Landlord had given notice to the Collateral Agents and undertakes to be bound under the Lease as Tenant until the Lease is assigned, transferred, surrendered, cancelled or terminated;

(e) the Controlling Party shall have no obligation to notify the Landlord before taking enforcement proceedings under its Mortgage, provided in the event of the Controlling Party taking enforcement proceedings under its Mortgage and advising the Landlord of its intention to maintain the Lease, the Controlling Party shall only be liable for:

(i) the payment of any rental arrears that are outstanding and remedying of any other breach of any of the covenants in the Lease of which the Landlord had given notice to the Collateral Agents; and

(ii) the performance of the Tenant’s covenants and obligations under the Lease from the time of commencement of enforcement proceedings until any assignment or transfer of the Lease pursuant to the terms thereof or any surrender, cancellation or other termination of the Lease, and the Controlling Party agrees to enter into an agreement in writing with the Landlord agreeing to be bound by the terms of the Lease during such period of time as if the Controlling Party had executed the Lease as tenant,

and nothing contained herein or in the Lease shall render the Collateral Agents or the Secured Parties (as defined in the Credit Agreement), as the case may be, liable for the performance of any of the covenants or other provisions of the Lease, including without limitation the covenants for the payment of rent, with respect to any period of time subsequent to the period of any actual possession of the leasehold premises by the Controlling Party or in the absence of such possession, subsequent to any assignment or transfer of the Lease pursuant to the terms thereof or any surrender, cancellation or other termination of the Lease, and the Controlling Party (if the Controlling Party takes possession of the leasehold premises) or any receiver-manager appointed by the Controlling Party shall be entitled to the same rights of assignment as are available to the Tenant under the Lease;

(f) the Landlord will not, without the written consent of the Controlling Party:

(i) accept the surrender of the Lease unless required to do so pursuant to the terms thereof; or

(ii) terminate the Lease except in accordance with its terms;

(g) as long as the Lease is charged by either of the Mortgages, the Landlord will not sell or transfer the premises demised by the Lease, or any part thereof, unless the purchaser or transferee concurrently agrees with the Collateral Agents to be bound by the terms of this Agreement;

(h) the Landlord will give notice to the Collateral Agents in writing and may be delivered personally or sent by prepaid registered mail or by facsimile, to the address or facsimile number as follows:

If to the First Lien Collateral Agent:

BNY Trust Company of Canada

320 Bay Street, 11^th Floor

Toronto, Ontario, M5H 4A6

Attn: Farhan Mir

Fax: 416-360-1711

If to the Second Lien Collateral Agent:

Computershare Trust Company of Canada

100 University Ave, 11th Floor

Toronto, Ontario M5J 2Y1

Attn: Manager, Corporate Trust

Fax: 416-981-9777

(i) any notice shall be deemed to have been given if:

(i) delivered personally, when received;

(ii) mailed on the 5^th business day following the date of mailing;

(iii) if sent by facsimile on the business day when the confirmation of receipt has been received if the confirmation of receipt has been received before 3:00 p.m. on that business day or, if the confirmation of receipt has been received after 3:00 p.m. on the next succeeding business day.

5. Collateral agents’ covenants

(a) The First Lien Collateral Agent covenants and agrees with the Landlord that:

(i) unless paragraph 5(a)(iii) hereof is complied with, it will not assign the First Lien Mortgage or the Lease or further sublet the Leased Premises or any part of the Leased Premises or part with possession of the Leased Premises without the prior written consent of the Landlord on the terms set out in the Lease;

(ii) at any time that the Controlling Party (when it is the First Lien Collateral Agent) or its agents (including a receiver or receiver-manager) occupies or has possession of the Leased Premises, it will be bound by and will observe and perform all of the terms and conditions contained in the Lease, and will indemnify and save the Landlord harmless from any and all claims, cost, loss or damage arising in any way in respect of such occupation or possession; and

(iii) it will require any transferee of its interest in the Lease, the Leased Premises or the First Lien Mortgage to agree by way of written agreement, to assume and, for as long as it holds the interest, to perform each of the covenants, obligations and agreements of the First Lien Collateral Agent under this Agreement in the same manner and to the same extent as if originally named as the party to this Agreement.

(b) The Second Lien Collateral Agent covenants and agrees with the Landlord that:

(i) unless paragraph 5(b)(iii) hereof is complied with, it will not assign the Second Lien Mortgage or the Lease or further sublet the Leased Premises or any part of the Leased Premises or part with possession of the Leased Premises without the prior written consent of the Landlord on the terms set out in the Lease;

(ii) at any time that the Controlling Party (when it is the Second Lien Collateral Agent) or its agents (including a receiver or receiver-manager) occupies or has possession of the Leased Premises, it will be bound by and will observe and perform all of the terms and conditions contained in the

Lease, and will indemnify and save the Landlord harmless from any and all claims, cost, loss or damage arising in any way in respect of such occupation or possession; and

(iii) it will require any transferee of its interest in the Lease, the Leased Premises or the Second Lien Mortgage to agree by way of written agreement, to assume and, for as long as it holds the interest, to perform each of the covenants, obligations and agreements of the Second Lien Collateral Agent under this Agreement in the same manner and to the same extent as if originally named as the party to this Agreement.

(c) Each Collateral Agent covenants and agrees in favour of the Tenant, Gateway, the BCLC and the Landlord that nothing in the Lease, the Mortgages or this Agreement will affect, fetter or otherwise interfere with or limit or restrict the exercise or enforceability of the BCLC’s Step-in Rights under the Tri Party Agreement (and the rights and remedies of each Collateral Agent under their respective Mortgage are hereby subordinated and postponed to the BCLC Step-in Rights under the Tri Party Agreement). In the event that the BCLC desires to exercise or enforce, or is exercising or enforcing, its Step-in Rights and provides written notice thereof to the Collateral Agents, each Collateral Agent hereby agrees to promptly discharge its respective Mortgage (at the sole expense of Gateway) and promptly provide evidence of such discharge to the Tenant, Gateway, the BCLC and the Landlord.

6. New Lease

The Landlord covenants and agrees with the Controlling Party that the Landlord will, at the Controlling Party’s written request, enter into a new lease (the “New Lease”) with the Controlling Party or with the nominee of the Controlling Party approved by the Landlord, such approval not to be unreasonably withheld, only if:

(a) the Landlord terminates the Lease by reason of the occurrence of a Non-curable Default (as defined below);

(b) the Controlling Party delivers written notice to the Landlord, within 15 days of the Controlling Party’s receipt of the Landlord’s notice of the Non-curable Default, that the Controlling Party (or its nominee) wants to enter a New Lease; and

(c) if the Controlling Party or its nominee approved by the Landlord pays the arrears of rent payable under the Lease and remedies all other defaults of the Tenant under the Lease (except for a Non-curable Default).

The New Lease will be for the balance of the Lease term commencing immediately upon receipt by the Landlord of the Controlling Party’s written request for a New Lease and otherwise will be on the same terms and conditions as are contained in the Lease.

For the purposes of this Agreement, “Non-curable Default” means any of the following:

(d) an execution, attachment, distress or similar process is taken against any of the assets of the Tenant;

(e) a trustee, receiver or receiver-manager is appointed for the business or assets of the Tenant;

(f) the Tenant makes an assignment for the benefit of creditors;

(g) the Tenant makes a bulk sale of all or a substantial portion of its assets;

(h) the Tenant becomes bankrupt or insolvent or takes the benefit of any law now or hereafter in force for bankrupt or insolvent debtors;

(i) an order is made for the winding up or termination of the corporate existence of the Tenant; or

(j) any other default by the Tenant under the Lease that cannot be remedied by the Controlling Party.

7. Landlord Disclaimer

Notwithstanding anything to the contrary contained in the Lease the Landlord:

(a) consents to the security interest granted by the Tenant in favour of the Collateral Agents pursuant to the Mortgages;

(b) disclaims any interest in any goods or fixtures of the Tenant mortgaged, assigned or transferred by the Tenant pursuant to the Mortgages which may now be or may hereafter be located on or affixed to the lands and premises demised by the Lease for so long as the Mortgages shall be in effect or until surrender, cancellation or termination of the Lease.

8. ENUREMENT

No party hereto may assign this Agreement without the prior written consent of each other party hereto and the BCLC. This Agreement shall be binding upon each of the undersigned and their respective successors and assigns and enure to the benefit of each of the undersigned and the BCLC and each of their respective successors and assigns, and may be relied upon by the BCLC and its successors and assigns notwithstanding that the BCLC is not a party hereto (and each party hereto shall cause its successors and assigns to become bound to this Agreement in its place by written agreement delivered to each other party hereto and the BCLC).

9. General

It is a condition of this Agreement that nothing herein contained shall be deemed to diminish, waive or modify any of the rights of the Landlord under the Lease except as expressly provided herein or to release the Tenant from the observance or performance of

any term, condition or covenant contained therein. This Agreement may be executed and delivered in counterparts, each of which, when so executed and delivered, shall be deemed an original, and delivery of an executed counterpart of this Agreement by facsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart. Each of the parties hereto will execute and deliver all such further documents, do or cause to be done all such further acts and things and give all such further assurances as may be necessary or desirable to give full effect to the provisions and intent of this Agreement. This Agreement will be governed and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

[Remainder of the page intentionally left blank]

IN WITNESS WHEREOF this Agreement has been executed on this [●] day of [●], 20[●].

[LANDLORD]
Per:
	Name:
	Title:
Per:
	Name:
	Title:

Gateway and the Tenant hereby acknowledges and agrees to the provisions set forth above.

Dated this [●] day of [●], 20[●].

[TENANT]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
GATEWAY CASINOS & ENTERTAINMENT LIMITED
Per:
	Name:
	Title:
Per:
	Name:
	Title:

The Collateral Agents and Trustees hereby acknowledge and agree to the provisions set forth above.

Dated this [●] day of [●], 20[●].

BNY TRUST COMPANY OF CANADA, as First Lien Collateral Agent
Per:
	Name:
	Title:
Per:
	Name:
	Title:
COMPUTERSHARE TRUST COMPANY OF CANADA, as Second Lien Collateral Agent
Per:
	Name:
	Title:
Per:
	Name:
	Title:
COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
Per:
	Name:
	Title:
Per:
	Name:
	Title:

COMPUTERSHARE TRUST COMPANY, N.A., as Trustee

Name:

Title:

Name:

Title:

SCHEDULE “A”

Master Lease Agreement dated [●], 20[●] between [●], as landlord, and [●], as tenant.

SCHEDULE “E”

PERMITTED ENCUMBRANCES

1. Subdivision, site plan control, development, reciprocal, servicing, facility, facility cost sharing or similar agreements with a Governmental Authority, neighbouring land owner or public or private utility from time to time in respect of the Demised Premises or any part thereof that do not materially impair the use (or potential use), operation or marketability of the Demised Premises or such part thereof, or increase the net cost of ownership or operation of the Demised Premises in any material respect; and

2. Permits, licenses, agreements, easements, restrictions, restrictive covenants, rights of way, public ways, rights in the nature of an easement and other similar rights in land granted to or reserved by other Persons (including, without in any way limiting the generality of the foregoing, permits, licenses, agreements, easements, rights of way, sidewalks, public ways, and rights in the nature of easements or servitudes for sewers, drains, steam, gas and water mains or electric light and power or telephone and telegraph conduits, poles, wires and cables) that do not materially impair the use (or potential use), operation or marketability of the Demised Premises or such part thereof, or increase the net cost of ownership or operation of the Demised Premises in any material respect.

SCHEDULE “F”

ALTERATIONS

[Grand Villa- Burnaby]

1. Hotel room refresh - including replacement of room PTACs, replacement of wall covering, carpets, casegoods for all rooms and replacement of all corridor carpets and renovation of all in-room washrooms. Renovation commenced Nov 28, 2017.

2. Buffet Patio Expansion - completion of Buffet renovation with the addition of a patio space. Currently awaiting Municipal approval.

3. Completion of renovations to Poker and proposed VIP gaming area. Currently in progress.

4. Renovation of the hotel fitness centre. Anticipated to start in 2018.

5. Replacement of all fabric wall/window coverings in the hotel lobby and convention spaces. Anticipated start in 2018.

6. Gaming floor carpet replacement on top floor. Anticipated start 2018.

7. Relocation of entry stairway for Lion’s Room in casino. Anticipated start 2018.

[Cascades-Langley]

1. Completion of the Match Kitchen renovation. Work has commenced, expected completion in February 2018.

2. Completion of the expanded Match Patio and associated renovation to the existing Match Patio. Work has commenced, expected completion February 2018.

3. Completion of the renovation of the overflow buffet space adjacent to the current Starbucks to introduce ‘CHOW noodle’. Anticipated start 2018.

4. Full renovation of the existing 77 hotel rooms. Anticipated start 2018.

5. Carpet replacement and wall refresh to the existing ballrooms. Anticipated start 2018.

6. Renovations to the Summit Theatre to allow for the relocation of the Bingo Operations. Work has commenced, completion anticipated February 2018.

7. A 22,000 sq. ft. expansion of south side of the existing building to accommodate the following components (anticipated start 2018):

a. Additional gaming space.

b. Construction of an “Atlas Steak and Fish” with an enclosed ground level patio

c. The construction of a rooftop Atlas Lounge

d. The construction of a flexible patio event space.

[Starlight New Westminster]

1. Carpet replacement for the main gaming floor. Anticipated start 2018.

2. Renovation to the VIP slot area. Anticipated start 2018.

SCHEDULE “G”

FORM OF SUBORDINATION/NON-DISTURBANCE AGREEMENT

THIS AGREEMENT dated for reference the          day of [●], 20[●] is made

BETWEEN:

	[●]
	(the “Lender”)
AND:
	[●]
	(the “Tenant”)
AND:
	BNY TRUST COMPANY OF CANADA, in its capacity as collateral agent pursuant to the Credit Agreement (as defined below)
	(the “First Lien Collateral Agent”)
AND:
	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as collateral agent pursuant to the Note Indenture (as defined below)
	(the “Second Lien Collateral Agent”, and together with the First Lien Collateral Agent, the “Agents”)

WHEREAS:

A. [●] (the “Landlord”) is the owner of certain lands and premises located in [•], British Columbia, and legally described as:

[●]

(the “Land”).

B. The Lender is the holder of a mortgage dated [●], 20[●] and registered against title to the Land in the [●] Land Title Office under registration number [●] (the “Mortgage”).

C. Pursuant to a lease dated [●], 20[●] made between the Tenant and the Landlord, the Landlord did demise to the Tenant the premises (the “Premises”) in a certain building located on the Land, as more particularly described in the Lease.

D. Pursuant to a credit and guaranty agreement dated as of February 22, 2017 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among, inter alios, Gateway Casinos & Entertainment Limited (“Gateway”), the sole shareholder of the Tenant, as borrower, Bank of Montreal, as the Administrative Agent (as defined in the Credit Agreement), the First Lien Collateral Agent, as collateral agent, the subsidiary guarantors named therein, the initial lender parties named therein, and the other parties from time to time party thereto, Gateway obtained financing by way of first lien credit facilities and as required thereunder, the Tenant granted a mortgage or mortgages by way of sublease of the leasehold interest of the Tenant to the First Lien Collateral Agent, for and on behalf of the Secured Parties (as defined in the Credit Agreement) by way of a debenture dated [●], 20[●] in the principal sum of US$1,000,000,000 granted by Gateway in favour of the First Lien Collateral Agent (the “First Lien Collateral Agent’s Security”).

E. Pursuant to a note indenture dated as of February 22, 2017 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Note Indenture”) among, inter alios, Gateway, the Second Lien Collateral Agent and the Trustees, Gateway obtained financing by way of a second lien note offering and as required thereunder, the Tenant granted a mortgage or mortgages by way of sublease of the leasehold interest of the Tenant to the Second Lien Collateral Agent, for and on behalf of the noteholders under the Note Indenture, by way of a debenture dated [●], 20[●] in the principal sum of US$1,000,000,000 granted by the Tenant in favour of the Second Lien Collateral Agent (the “Second Lien Collateral Agent’s Security” and together with the First Lien Collateral Agent’s Security, the “Security”).

F. The Tenant and the Agents want to be assured of continued occupancy of the Premises under the terms of the Lease.

THEREFORE, for good and valuable consideration, the receipt and sufficiency of which each party acknowledges, the parties to this Agreement agree as follows:

REPRESENTATIONS AND WARRANTIES OF THE TENANT

The Tenant represents and warrants to the Lender that, as at the date of this Agreement:

the Lease is in full force and effect and has not been modified or amended;

the Tenant has accepted possession of the Premises, and all improvements required by the Lease or otherwise to be made by the Landlord have been completed to the satisfaction of the Tenant, and the Tenant is now in possession of the Premises and is operating its business from the Premises and paying rent to the Landlord;

the Tenant has no charge, lien, defense, right of abatement or claim under the Lease or claim of set-off against the rents or other charges due or to become due under the Lease;

the rent reserved by the Lease has not been and shall not be demanded, collected, accepted or paid in advance of the time for payment thereof other than in the manner set forth in the Lease; and

there is no default by either the Landlord or the Tenant of any of the obligations under the Lease.

TENANT’S COVENANTS

The Tenant covenants and agrees with the Lender that, notwithstanding anything to the contrary in this Agreement:

the Tenant will, upon request by the Lender, attorn to the Lender and become its tenant and thereafter pay all rent and other charges provided for in the Lease to the Lender;

the provisions of this Agreement will apply despite the date of execution of this Agreement preceding the date of execution of the Mortgage;

the Tenant shall not prepay any rents reserved under the Lease and will not surrender the Lease to the Landlord or its successors or assigns except as provided in the Lease;

except as expressly provided in Article 8 of the Lease, the Tenant shall not assign the Lease or sublet the Premises;

except as expressly provided in the Lease, the Tenant shall not exercise any power, privilege or right to terminate the Lease by reason of the bankruptcy or insolvency of the Landlord;

the Tenant shall observe and perform all of its obligations under the Lease; and

the Tenant shall, upon receipt of a direction from the Landlord, make all rental payments under the Lease to the Lender.

FURTHER COVENANTS OF THE TENANT

The Lease is now, and shall at all times continue to be subject and subordinate in every respect to the Mortgage and to any and all renewals, modifications, extensions, substitutions, replacements, or consolidations of the Mortgage, and to any present or future mortgage or mortgages which may now or hereafter affect the Lands. Any and all such renewals, modifications, extensions, substitutions, replacements or consolidations, or any such other mortgages, shall nevertheless be subject to and entitled to the benefits of the terms of this Agreement.

The Tenant agrees to provide notice to the Lender of any material default by the Landlord that becomes actually known by the Tenant which would (if same remains uncured beyond any cure period provided for in the Lease) give the Tenant a right to terminate the Lease. In addition, the Tenant hereby agrees to give to the Lender a reasonable period of time within which to remedy such default prior to terminating the Lease and the Lender may, but shall not be obliged to remedy such default on behalf of the Landlord, in which event the Tenant shall not terminate the Lease.

NON-DISTURBANCE

The Lender and the Tenant each covenant and agree with the other and the Agents as follows:

if it becomes necessary to foreclose the Mortgage, the Lender agrees that it will not join the Tenant or the Agents in such foreclosure proceedings or enforce any rights of the Lender under the Mortgage to disturb the Tenant’s quiet possession of the Premises or to foreclose the First Lien Collateral Agent Security or the Second Lien Collateral Agent Security so long as the Tenant is not in default under any of the terms, covenants, or conditions of the Lease;

if the Lender succeeds to the interest of the Landlord under the Lease for any reason, the Lender and the Tenant covenant with each other and with the Agents that the Lender will be bound to the Tenant under all of the terms, covenants, and conditions of the Lease and any Ancillary Agreements;

except as provided in the Lease, if the Lease is terminated by the Lender before the expiry of the term of the Lease or any extension or renewal of the Lease during the exercise of its rights or remedies under the Mortgage or if the Lender becomes the owner of the Premises by reason of foreclosure of the Mortgage or otherwise or if the Premises are sold as a result of any action or proceeding to foreclose the Mortgage, and if at the date of such termination or change in ownership the Tenant is not in default of the Lease, then the Lender will, on receipt of the written notice of the Tenant (or either Agent, or any third party of either of the Agents or any third party succeeds to the interest of the Tenant under the Lease for any reason including the exercise of its rights and remedies under the Security or otherwise) to do so, grant (or cause to be granted to) the Tenant (or the either Agent or any third party purchaser) a new lease (the “New Lease”) of the Premises for the portion of the term of the Lease remaining unexpired and new Ancillary Agreements and otherwise on the same terms and conditions as the Lease and the Ancillary Agreements except that in the New Lease, the landlord will be the Lender or the then owner of the Premises;

if the Lender at any time sells, assigns or otherwise transfers the Mortgage, the Lender will require, as a condition precedent of such sale, assignment or transfer, that the purchaser, assignee, or transferee agree in writing with the Tenant and each Agent to assume and be bound by the terms of this Agreement as if such purchaser, assignee, or transferee had executed this Agreement in place of the Lender;

upon the assumption of the obligations set out in this Agreement by a purchaser or assignee of the Lender’s interest, the Lender shall be released from all obligations under this Agreement and the Lease;

this Agreement will terminate upon the earlier of:

the expiry of the Lease and all Ancillary Agreements or if renewed or extended, the expiry of such renewal or extension, in accordance with the terms of the Lease and all Ancillary Agreements or as provided in this Agreement; and

the discharge of the Mortgage; and

the Mortgage does not create a security interest in the Tenant’s Trade Fixtures (as such term is defined in the Lease) or any personal property of the Tenant and that the Tenant’s Trade Fixtures shall remain the personal property of the Tenant.

NOTICE

5.1 Means of Giving Notice

Any notice under this Agreement must be given in writing and may be sent by fax or may be delivered or mailed to the party to which notice is to be given at the recipient party’s address or fax number set out below (or to such other address or fax number as a party may specify by notice given in accordance with this clause):

If to the Lender:

[●]

If to the Tenant:

[●]

4331 Dominion Street

Burnaby, British Columbia V5G 1C7

Attn:     Chief Financial Officer

Fax:      604-412-0117

If to the First Lien Collateral Agent

BNY Tryst Company of Canada

320 Bay Street, 11th Floor

Toronto, Ontario M5H 4A6

Attn:     Vice President – Relationship Manager

Fax:      416-360-1711

If to the Second Lien Collateral Agent:

Computershare Trust Company of Canada

100 University Ave, 11th Floor

Toronto, Ontario M5J 2Y1

Attn:      Manager, Corporate Trust

Fax:       416-981-9777

5.2 Receipt of Delivered Notice

If notice is sent by fax, or is delivered, it will be deemed to have been given at the time of transmission or delivery.

5.3 Receipt of Mailed Notice

If notice is mailed, it will be deemed to have been received on the second working day following the date of mailing of the notice.

5.4 Interruption of Mail Service

If there is an interruption in normal mail service due to strike, labour unrest, or other cause at or before the time a notice is mailed, the notice must be sent by fax, or be delivered.

GENERAL

6.1 Time of Essence.

Time is of the essence of this Agreement.

6.2 Enurement

This Agreement enures to the benefit of and is binding on the parties and their heirs, executors, administrators, successors, and permitted assigns.

6.3 Entire Agreement

This Agreement contains the entire agreement between the parties to it and will not be modified, waived, or cancelled except by an agreement in writing executed by the party against whom enforcement of such modification, waiver, or cancellation is sought.

6.4 Further Assurances

Each of the parties to this Agreement will do all such further acts and things and execute and deliver all such further documents or instruments as may be reasonably required by any other party or as may be reasonably necessary to effect the purpose of and to carry out the provisions of this Agreement.

6.5 Invalidity

If any covenant, obligation or agreement of this Agreement, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such covenant, obligation or agreement to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each covenant, obligation and agreement of this Agreement shall be separately valid and enforceable to the fullest extent permitted by law.

6.6 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of Alberta and the laws of Canada applicable therein and shall be treated in all respects as an Alberta contract.

6.7 Covenants

Each obligation and agreement contained in this Agreement is deemed to be a covenant and each such covenant is deemed to be a covenant running with the Lands.

6.8 Interpretation

Wherever the singular or masculine is used throughout this Agreement, the same shall be construed as meaning the plural or the feminine or body corporate, where the context so requires. The term “Lease” also includes all renewals and extensions of the Lease.

6.9 Counterparts

This Agreement may be executed in counterparts, each of which together will constitute one and the same agreement.

7.0 Ancillary Agreements

For the purposes of this Agreement, “Ancillary Agreements” means ●.

IN WITNESS WHEREOF, the Lender, the Tenant and the Agents have executed this Agreement as of the date first above written.

[●]

Per:
	Authorized Signatory

[●]

Per:
	Authorized Signatory
BNY TRUST COMPANY OF CANADA
Per:
	Authorized Signatory
COMPUTERSHARE TRUST COMPANY OF CANADA
Per:
	Authorized Signatory

SCHEDULE “H”

FORM OF SUBLEASE ACKNOWLEDGMENT

made as of the ● day of ●

BETWEEN:

●

(the “Head Landlord”)

AND:

●

(the “Tenant”)

WITNESS THAT for good and valuable consideration, the receipt and sufficiency of which is acknowledged by all Parties hereto, the Parties covenant and agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Defined Terms. In these Terms:

(a) “Agreement”, “this Agreement”, and “the Agreement” refer to this agreement as it may be amended or supplemented from time to time;

(b) “Head Lease” means the lease dated ● between the Head Landlord, as landlord, and the Landlord, as tenant, pursuant to which the Landlord agreed to lease ● to the Landlord;

(c) “Landlord” means ●;

(d) “Lease” means the lease dated ● between the Landlord and the Tenant, pursuant to which the Landlord agreed to lease the Leased Premises to the Tenant;

(e) “Leased Premises” means the Leased Premises as defined in the Lease;

(f) “Parties” means the Head Landlord, the Tenant and the Landlord, and their respective successors and assigns, and “Party” means either one of the Parties; and

(g) “Person” means an individual, a corporation, a society, a partnership, a government or any government department or agency, a trustee, any unincorporated organization, and includes the heirs and legal representatives of an individual.

1.2 Gender and Number. Words in one gender include all genders, and words in the singular include the plural and vice versa.

1.3 Interpretation Not Affected. In this Agreement, using separate Articles and inserting headings are for convenient reference only and will not affect how this Agreement is interpreted.

1.4 Severability. If any term of this Agreement is partially or wholly invalid or unenforceable, the remainder of this Agreement will not be affected, and each remaining term will be separately valid and enforceable.

1.5 Governing Law and Jurisdiction. This Agreement will be governed by and construed in accordance with British Columbia law and applicable Canadian law.

1.6 Time. Time will be of the essence.

1.7 Expiry of Time Period. In this Agreement, if any period ends on a day other than a Business Day, that period will be extended to the next following Business Day.

1.8 Communications. Any communication to be given under this Agreement will be in writing and either delivered by hand, or transmitted by facsimile transmission, to the address or fax number of each Party set out below:

(a) If to the Landlord:

●

(b) If to the Tenant:

●

(c) If the Head Landlord:

●

or to such other addresses or fax number as any Party may designate in the manner set out above. Any communication will be considered to have been given and received on the day of delivery or the day of transmission as the case may be.

1.9 Amendment. This Agreement may be amended or supplemented only by a written agreement signed by each Party and that agreement need not be executed under seal.

ARTICLE 2

AGREEMENTS

2.1 Head Landlord’s Agreement Not to Disturb Tenant. So long as the Tenant is not in material default (beyond any applicable cure period) in the payment of any rent, or additional rent, or in the performance of any material term of the Lease on the Tenant’s part to be performed:

(a) the Tenant’s possession of the Leased Premises; and

(b) all of the Tenant’s rights and privileges under the Lease or any extension or renewal of the Lease (including without limitation the benefit of all personal rights in favour of the Tenant and contractual obligations of the Landlord in favour of the Tenant contained in the Lease, and the benefit of all easements and restrictive covenants created in favour of the Tenant and the Leased Premises pursuant to the Lease),

will not be diminished or interfered with by the Head Landlord, or any party claiming through the Head Landlord, and the Tenant’s occupancy of the Leased Premises will not be disturbed by the Head Landlord during the term of the Lease, or any extension or renewal of the Lease.

2.2 Tenant Not a Party to Any Action. So long as the Tenant is not then in material default (beyond any applicable cure period) in the payment of rent, or additional rent, or in the observance or performance of any material term of the Lease on the Tenant’s part to be performed, the Head Landlord will not join the Tenant as a defendant in any action or proceeding, for the purpose of terminating or otherwise affecting the Tenant’s interest, estate or personal rights under the Lease, or the Landlord’s contractual obligations to the Tenant contained in the Lease because of any default under the Head Lease.

2.3 Termination of Head Lease and Attornment. If, at any time prior to the expiration of the term of the Lease, the Head Lease shall expire or be terminated for any reason (or the Landlord’s right to possession shall terminate without termination of the Head Lease), the Head Landlord and the Tenant agree that the Tenant shall be deemed to have attorned to the Head Landlord and entered in a new lease (the “New Lease”) for the remainder of the term of the Lease (the “Remainder Term”). The New Lease and such attornment shall be upon all of the same terms and conditions as the Lease as they pertain to the Leased Premises. The foregoing provisions of this Section 2.3 shall apply notwithstanding that, as a matter of law, the Lease may be terminated upon the expiry or termination of the Head Lease, and no further instrument shall be required to give effect to the provisions contained in this Section 2.3. The New Lease shall commence and be effective upon the date the Head Lease expires or is terminated (or the date the Landlord’s right to possession shall terminate without termination of the Head Lease), as the case may be, and the Tenant shall be liable to make all readjustments necessary to give effect to the New Lease within 5 days of written notice from the Head Landlord. Upon the demand of the Head Landlord, however, the Tenant agrees to execute, from time to time, documents confirming the foregoing provisions of this Section 2.3 to the satisfaction of the Head Landlord, acting reasonably, and in which the Tenant shall acknowledge such attornment and the terms and conditions of the New Lease. Nothing contained in this Section 2.3 shall be construed to impair or modify any right otherwise exercisable by the Head Landlord, whether under the Head Lease, this Agreement or under any other agreement or in law or equity.

2.4 Binding Agreement. This Agreement will bind and benefit each of the Parties including their respective successors and permitted assigns.

2.5 Collateral Representations and Agreements. This Agreement is the entire agreement between the Parties with respect to the subject matter contained herein and supersedes any prior agreement dealing with the same subject matter. No Party is bound by any warranty or agreement not included in this Agreement, and in particular, no warranty of a Party not expressed in this Agreement is to be implied.

2.6 No Partnership. Neither the execution of this Agreement nor the performance by a Party of any of its rights and obligations under this Agreement will create any partnership between the Parties.

2.7 Assignment. No Party may assign this Agreement without the prior consent of the other Parties.

2.8 Counterparts. This Agreement may be executed in any number of counterparts, and each executed counterpart will be considered to be an original. All executed counterparts taken together will constitute one agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

●		●
Per:		Per:
	Name:		Name:
	Title:		Title:
Per:		Per:
	Name:		Name:
	Title:		Title:
I/we have authority to bind the Corporation.		I/we have authority to bind the Corporation.

SCHEDULE “I”

EXISTING LEASES

1. Lease Agreement dated August 1, 2016 between Gateway Casinos & Entertainment Limited, as landlord, Spa Tru Holdings Inc., as tenant, and Michael Quinn and Jonas Laforge, collectively as indemnifiers, as amended by an amending agreement dated February 15, 2017, as further amended, extended, renewed and assigned from time to time.

2. Lease Agreement dated January 6, 2010 between Gateway Casinos & Entertainment Inc., as landlord, 0870328 B.C. Ltd, as tenant, and Tropika Malaysian Cuisine Inc., as indemnifier, as amended by amending agreements dated January 14, 2011 and October 12, 2017, as further amended, extended, renewed and assigned from time to time.

3. Lease Agreement dated January 10, 2006 between Star of Fortune Gaming Management (B.C.) Corp, as landlord, and Lysias Enterprises (Canada) Ltd. doing business as Kirin Restaurants, as tenant, as amended, extended, renewed and assigned from time to time.

4. Lease Agreement dated August 13, 2010 between Can west Equities Ltd. And David Arthur Seller, executor of the Estate of Arthur Elmer Seller, as landlord, and Fraser Health Authority, as tenant, as amended, extended, renewed and assigned from time to time.

5. Lease Agreement dated February 11, 1998 between Villa Hotels Ltd., as landlord, and Clearnet PCS Inc., as tenant, as amended, extended, renewed and assigned from time to time.

6. Lease Agreement dated November 30, 2015 between Gateway Casinos & Entertainment Limited, as landlord, and IVS Holdings Ltd., as tenant (on a joint and several basis), as amended, extended, renewed and assigned from time to time.

7. Master Licensing Agreement dated October 28, 2008 between Gateway Casinos & Entertainment Inc., as licensee, and Starbucks Corporation, as licensor, as amended by amending agreements dated March 26, 2010 and July 19, 2012, as further amended, extended, renewed and assigned from time to time.

8. Assignment, Assumption and Consent Agreement dated January 14, 2011 between Gateway Casinos & Entertainment Limited, as assignee, and Gateway Casinos & Entertainment Inc., as assignor, as amended, extended, renewed and assigned from time to time (in respect of master licensing agreement in #7 above).

9. Statutory Right of Way Agreement dated April 1, 2004 between Gateway Casinos Ltd. Partnership Inc., as grantor, and Microcell Connexions Inc., as grantee, as amended by an addendum dated September 28, 2004, as renewed by letter agreement dated January 17, 2004, and as further amended, extended, renewed and assigned from time to time.

10. Letter Agreement dated May 23, 2007 between Rogers and Gateway (Villa Casino, Hotel & Convention Centre) and related subsequent email correspondence (in respect of statutory right of way agreement in #9 above).

11. Site Lease dated October 1, 1997 between Villa Hotels Ltd., as lessor, and Clearnet Inc., as lessee, as amended, extended, renewed and assigned from time to time.

12. Agreement for Roof Usage dated June 1, 2002 between Radisson Hotel Burnaby, as grantor, and Net-Conex Business Solutions Inc., as grantee, as amended, extended, renewed and assigned from time to time.

13. Building Lease Agreement dated July 6, 2009 between Gateway Casinos & Entertainment Inc., as landlord, and Globalive Wireless Management Corporation, as tenant, as amended, extended, renewed and assigned from time to time.

14. Building Lease Agreement dated November 13, 2009 between Gateway Casinos & Entertainment Inc., as landlord, and Globalive Wireless Management Corporation, as tenant, as amended, extended, renewed and assigned from time to time.

SCHEDULE “J”

LANDLORD BCLC AGREEMENT

THIS AGREEMENT made as of ·.

BETWEEN:

·

(“Landlord”)

- and -

BRITISH COLUMBIA LOTTERY CORPORATION

(“BCLC”)

- and -

GATEWAY CASINOS & ENTERTAINMENT LIMITED

(the “Beneficial Tenant”)

- and -

·

(the “Nominal Tenant”)

RECITALS:

A. The Landlord and the Nominal Tenant are parties to a Lease dated [·] (the “Lease”) with respect to certain premises (the “Premises”) located at [·] dated [·], British Columbia, as more particularly described in the Lease.

B. The Beneficial Tenant and BCLC are parties to an operational services agreement dated [·] providing for Services to be performed at the Premises (as amended, supplemented, restated, modified, supplemented, assigned or replaced from time to time, collectively, the “Tenant OSA”).

C. The Landlord, the Nominal Tenant and the Beneficial Tenant are parties to the Covenant Agreement with respect to the Lease. For the sake of clarity, references in this Agreement to the covenants and obligations of the Nominal Tenant under the Lease shall include the covenants and obligations of the Beneficial Tenant (as the beneficial owner of the tenant’s interest in the Lease) as provided in the Covenant Agreement.

D. Pursuant to Section [·] of the Lease, the Nominal Tenant is obligated to maintain the Tenant OSA in good standing.

E. Pursuant to the Tenant OSA, the Beneficial Tenant and BCLC have agreed to enter into this Agreement.

FOR VALUE RECEIVED, the Parties agree as follows:

1. Interpretation

(a) Definitions

In this Agreement all defined terms not otherwise defined have the respective meanings set out below:

“Affiliate” of any person or entity means, at the time this determination is being made, any other person or entity controlling, controlled by or under common control with such person or entity in each case, whether directly or indirectly, and “control” and any derivation thereof, means in possession, directly or indirectly, of the powers to direct the management and policies of a person or entity, whether through the ownership of voting securities or otherwise.

“Agreement” means this agreement, including all schedules and all amendments or restatements as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement.

“BCLC” has the meaning ascribed above, and includes its permitted assigns hereunder.

“BCLC Exercise” has the meaning ascribed thereto in Section 6(a)(i).

“BCLC Property” means the Revenue, the Net Win, the Chip Liability and any account in which the Corporation may permit the deposit of the Chip Liability, the Corporation Data, the Computer System, the Corporation’s Confidential Information, the BCLC IP and the Gaming Supplies, all as defined in the Tenant OSA.

“Business Day” means any day, other than a Saturday or Sunday or statutory holiday in the Province of British Columbia.

“Covenant Agreement” means a covenant agreement dated as of [·] between the Tenant and the Landlord, which confirms that the Beneficial Tenant is the beneficial owner of the leasehold interest demised pursuant to the Lease and that the Nominal Tenant holds all rights and obligations thereunder as nominee and bare trustee for the Beneficial Tenant; and pursuant to which the Beneficial Tenant covenants and agrees in favour of Landlord that the Beneficial Tenant is bound by all obligations, covenants and liabilities of Nominal Tenant under the Lease as if the Beneficial Tenant were the tenant thereunder.

“Default Notice” has the meaning ascribed to it in the Tenant OSA.

“Gaming Laws” means any applicable federal, provincial, or local statutes, ordinances, regulations, rules, codes, orders, judgments, decrees, licenses or other

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requirements including approvals by applicable governmental authorities pursuant to which casino or other gaming activities are conducted.

“Lease” has the meaning given to it in Recital A.

“Lease Assumption Date” has the meaning ascribed thereto in Section 6(a)(ii). “Lease Cure Period” has the meaning ascribed thereto in Section 5(c). “Lease Default Notice” has the meaning ascribed thereto in Section 5(c).

“Monetary Lease Default Notice” has the meaning ascribed thereto in Section 2.

“New Tri Party Agreement” has the meaning ascribed thereto in Section 6(c)(iii).

“OSA Termination Notice” has the meaning ascribed thereto in Section 5(a).

“OSAs” means all operational services agreements (including the Tenant OSA) between the Tenant or any of its Affiliates and BCLC from time to time.

“Parties” means BCLC, Landlord and the Tenant; and “Party” means any one of them.

“Permitted Assignee” means BCLC or an entity that is permitted to take an assignment of the Beneficial Tenant’s interest in the Lease in accordance with the terms and provisions of the Lease.

“Premises” has the meaning given to it in Recital A.

“Rent” has the meaning ascribed thereto in the Lease.

“Rental Arrear” has the meaning ascribed thereto in Section 2.

“Services” has the meaning ascribed thereto in the Tenant OSA as it pertains only to the Premises.

“Step In Period” has the meaning ascribed thereto in Section 4.

“Step In Remedy” has the meaning ascribed thereto in Section 4.

“Tenant” means the Nominal Tenant and the Beneficial Tenant, and from and after any valid assignment of the Nominal Tenant’s or the Beneficial Tenant’s interest in the Lease and/or the Covenant Agreement, as applicable, means (or includes, as applicable) such assignees, so that at all times the reference to Tenant hereunder includes both any entity that has a beneficial interest in the tenant’s interest in the Lease, as well as any entity that is acting as a nominee and bare trustee as tenant under the Lease.

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“Tenant OSA” has the meaning given to it in Recital A.

“Third Party Operator” has the meaning ascribed thereto in Section 4.

“Undistributed Provincial Gaming Revenue” means amounts that are due, owing and payable by BCLC to a Tenant pursuant to the Tenant OSA after BCLC’s set offs, adjustments and withheld amounts, from time to time in accordance with the Tenant OSA, provided, however, if all gaming operations in the Province of British Columbia in which a Tenant or any of its Affiliates has an interest are not included in such amounts, then Undistributed Provincial Gaming Revenue shall also include all amounts that are due, owing and payable by BCLC to a Tenant or any of its Affiliates pursuant to all OSAs after BCLC’s set offs, adjustments and withheld amounts in accordance with such OSAs.

(b) Headings

Headings are inserted for convenience of reference only and do not affect the construction or interpretation of this Agreement.

(c) Number and Gender

Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

(d) Severability

If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable the provision shall, as to that jurisdiction, be ineffective only to the extent of the restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement.

(e) Entire Agreement

This Agreement constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise. There are no covenants, promises, warranties, representations, conditions or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and any document required to be delivered pursuant to this Agreement.

(f) Time

Time is of the essence in the performance of the Parties’ respective obligations.

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(g) Time Periods

Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

2. Payment of Rent under the Lease from Undistributed Provincial Gaming Revenue

(a) If BCLC receives written notice from the Landlord (a “Monetary Lease Default Notice”) that any Rent or any other monetary amount under the Lease is then due and unpaid beyond any applicable cure period provided for in the Lease (a “Monetary Default”, the dollar amount so set out in the Monetary Lease Default Notice being the “Rental Arrear”) and a reference to the direction provided in this Section 2, then BCLC is hereby irrevocably authorized and directed by the Beneficial Tenant to pay to the Landlord funds available from the Tenant’s interest in any Undistributed Provincial Gaming Revenue that are in its possession after the date of receipt of such Monetary Lease Default Notice, until such Rental Arrear has been paid in full. BCLC acknowledges and accepts that the foregoing direction by the Tenant to BCLC is irrevocable by the Tenant. Provided such payments are permitted by applicable law (including without limitation bankruptcy and insolvency, fraudulent preference and conveyance laws) and BCLC has not received a notice from any third party of any other claims to such amounts, BCLC hereby agrees to comply with such irrevocable direction. In the event of any such competing claims or disputes over such amounts, BCLC shall pay the funds into court or shall pay the Rental Arrears to the Landlord. For greater certainty, despite the termination of this Agreement, if the Landlord was prevented by court order or other applicable law from delivering a Monetary Lease Default Notice for Rental Arrear that accrued prior to such termination, at such time that BCLC does receive a Monetary Lease Default Notice for such Rental Arrear, BCLC will comply with this Section 2. If a Rental Arrear exists at such time as this Agreement terminates, the provisions of Section 2 hereof shall continue to apply to the Parties until such time as such Rental Arrear has been paid in full.

3. Suspension of Services

The parties acknowledge that BCLC may, in its sole discretion, suspend Beneficial Tenant’s right to perform Services in whole or in part. In the event BCLC suspends all or substantially all of the Services, BCLC will promptly provide written notice thereof to the Landlord.

4. BCLC Step In Remedy

(a) The parties acknowledge that BCLC may, in its sole discretion, either by itself or by engaging a third party service provider selected by BCLC (a “Third Party

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Operator”), take such steps as it considers necessary or expedient to mitigate, rectify or protect against a default of the Tenant OSA, including performing any of the Services (the “Step In Remedy”), for such period as BCLC determines in its sole discretion (the “Step In Period”). For the sake of clarity, the parties acknowledge that during any Step In Period, the Tenant OSA shall continue in full force and effect and the provisions of Sections 2 hereof shall continue to be in effect as to any Rental Arrear as to which a Monetary Lease Default Notice has been given to BCLC.

(b) In connection with BCLC exercising any Step In Remedy where it is performing or causing to be performed, all or substantially all of the Services at the Premises from time to time, BCLC shall, in accordance with its rights under the Tenant OSA, treat payment of Rent and Sales Tax (each as defined in the Lease) due from time to time during such Step In Period in the same manner as BCLC treats other third-party costs and expenses incurred in exercising its rights under the Tenant OSA during the same period (excluding, for clarity, any Rent or associated Sales Tax accruing in any period prior to such Step In Period).

(c) BCLC agrees to provide written notice to the Landlord promptly after exercising a Step In Remedy that includes BCLC or any Third Party Operator performing Services at the Premises.

5. Covenants to Provide Notice

(a) The parties acknowledge and agree that, pursuant to and in accordance with the terms and conditions of the Tenant OSA, BCLC may terminate the Tenant OSA by notice to the Tenant. If BCLC terminates the Tenant OSA then it will concurrently with providing notification of such termination to the Tenant, provide notice to the Landlord (an “OSA Termination Notice”).

(b) If an Event of Default (as defined in the Tenant OSA) has occurred, all applicable cure periods have expired without Tenant remedying such Event of Default, and BCLC provides notice to the Tenant that it is exercising any of its remedies under the Tenant OSA as a result thereof, then BCLC will concurrently with the provision of such notice to the Tenant, provide such notice to the Landlord.

(c) If at any time or times a Tenant is in default under the Lease (for greater certainty, including without limitation a Monetary Default), the Landlord will concurrently with the delivery of notice of such default to the Tenant, deliver such default notice to the BCLC (the “Default Notice”). If at any time or times an Event of Default (as such term is defined in the Lease) under the Lease has occurred, the Landlord may elect to commence the Option Period (as defined below) by providing written notice to BCLC (the “Option Period Notice”). If the Landlord terminates the Lease then it will concurrently with providing notification of such termination to the Tenant, provide notice to BCLC (a “Lease Termination Notice”).

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6. Option

(a) Upon the earliest time that (i) BCLC delivers an OSA Termination Notice to the Landlord pursuant to Section 5(a) above, or (ii) BCLC receives an Option Period Notice or Lease Termination Notice pursuant to Section 5(c) above, then BCLC shall have the exclusive and irrevocable option to assume the Lease (the “Option”), which Option is exercisable within 30 Business Days (the “Option Period”) of the earliest of BCLC’s receipt of the Option Period Notice or the Lease Termination Notice or BCLC’s delivery of the OSA Termination Notice, as applicable. If BCLC wishes to exercise the Option, then:

(i) within the Option Period, BCLC must deliver to the Landlord and the Tenant written notice (the “BCLC Exercise”) that it has irrevocably exercised its Option; and

(ii) within 30 Business Days the BCLC Exercise, BCLC and Landlord shall enter into an assumption agreement in favour of the Landlord (the date of such agreement being the “Assumption Date”), assigning the Lease to BCLC and confirming that BCLC agrees to be bound by all terms of the Lease arising in the period from and after the Assumption Date, provided that (other than as set out below) (A) it shall not be a condition that defaults under the Lease shall be cured concurrently or prior to such assumption becoming effective, and (B) neither BCLC nor any Permitted Assignee shall be liable for any act or omission of the Tenant, nor any default of the Tenant under the Lease occurring prior to the Assumption Date, including without limitation a Monetary Default, nor subject to any set-offs or defences which the Landlord might have against the Tenant, and the Landlord shall provide BCLC and any Permitted Assignee with a release of such acts, omissions and defaults; and (C) the Tenant shall remain solely liable to the Landlord for all such defaults, acts, omissions occurring prior to the Assumption Date. Notwithstanding the foregoing, (1) BCLC acknowledges and agrees that upon the delivery of the BCLC Exercise, it shall be obligated to the Landlord to pay all Rents and applicable Sales Tax accruing under the Lease from and after the BCLC Exercise (and not only from and after the Assumption Date); and (2) nothing in this clause (ii) of Section 6(a) shall negate or limit Landlord’s rights under Section 2 hereof.

(b) Landlord will not terminate the Lease prior to or during the Option Period, and BCLC may exercise, or continue to exercise, the Step In Remedy during the Option Period and, if it exercises the Option, until the Assumption Date.

(c) At any time following the Assumption Date, BCLC shall be permitted to designate a Permitted Assignee, and such Permitted Assignee shall, on the assumption of the lease by such Permitted Assignee (the “Lease Assumption Date”) enter into:

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(i) a new operating services agreement with BCLC for the balance of the term of the Tenant OSA, on substantially the same terms as the Tenant OSA, which shall thereafter be the Tenant OSA for the purposes of the New Tri Party Agreement and the Lease;

(ii) an assumption agreement in favour of the Landlord, agreeing to be bound by all terms of the Lease arising in the period from and after the Lease Assumption Date; provided that (except as set forth in clause (ii) of Section 6(a) above) (A) it shall not be a condition that defaults under the Lease shall be cured concurrently or prior to such assumption becoming effective, and (B) neither BCLC nor any Permitted Assignee shall be liable for any act or omission of the Tenant, nor any default of the Tenant under the Lease occurring prior to the Assumption Date, including without limitation a Monetary Default, nor subject to any set-offs or defences which the Landlord might have against the Tenant and the Landlord shall provide BCLC and any Permitted Assignee with a release of all such acts, omissions and defaults; (C) the Tenant shall remain solely liable to the Landlord for all such defaults, acts, omissions occurring prior to the Assumption Date; and (D) the Permitted Assignee shall be solely liable to the Landlord for all obligations under the Lease after the date of the assumption, and the Landlord shall provide BCLC with a release of all such obligations.

(iii) an agreement, on the same terms and conditions as this Agreement (a “New Tri Party Agreement”), with each of the Landlord and BCLC which Agreement shall govern (and replace this Agreement) with respect to the period from and after (but not prior to) the Lease Assumption Date.

(d) If BCLC does not exercise the Option within the Option Period, then BCLC will remove the BCLC Property from the Premises within 30 Business Days of the earlier of: (i) the date of termination set out in the OSA Termination Notice, or (ii) the end of the Option Period, as applicable.

7. Insolvency Provisions

Each Tenant agrees that in the event it seeks relief under the Companies’ Creditors Arrangement Act, the Bankruptcy and Insolvency Act, or any other bankruptcy, insolvency, or liquidation laws of Canada (or if applicable, any other jurisdiction), it will, to the extent practicable, seek to permit the Landlord and BCLC to exercise their rights under this Agreement, including, without limitation, the right of the Landlord in Section 2 hereof and the rights of BCLC hereunder in Section 4, Section 5 and Section 6 hereof.

8. General BCLC Access Rights

The Landlord acknowledges that, pursuant to the Tenant OSA, the Tenant has granted to BCLC a license to enter into the Premises for the purposes of conducting and managing gaming at the Premises, and, subject to the provisions of this Agreement, including but

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not limited to Section 4, and of the Lease, the Landlord agrees that BCLC may exercise such license and enter into the Premises for the purposes of and in accordance with the terms and conditions of the OSA.

9. BCLC’s Property

Landlord hereby acknowledges that BCLC is the legal and beneficial owner of BCLC’s Property. Landlord hereby waives and releases in favour of BCLC:

(a) any and all rights, including without limitation, rights of distraint, levy and execution which Landlord may now or hereafter have against BCLC’s Property;

(b) any and all statutory liens, security interests or other liens which Landlord may now or hereafter have in the BCLC’s Property; and

(c) all other interests or claims of every nature whatsoever which Landlord may now or hereafter have in or against BCLC’s Property for any rent, storage charges, or other sums due, or to become due, to Landlord pursuant to this Agreement.

BCLC’s Property may be stored, utilized and/or installed at the Premises and shall not be deemed a fixture or part of the real estate but shall at all times be considered personal property. The Parties hereto acknowledge that BCLC shall, and shall be permitted to, remove the BCLC Property from the Premises in accordance with the OSA, so long as BCLC promptly repairs any damage to the Premises caused thereby.

10. BCLC Rights and Obligations

Except as specifically provided for in this Agreement, BCLC has no obligations (whether express, implied, collateral or otherwise) to the Landlord in connection with this Agreement or the Tenant OSA. All of the obligations and liabilities given, undertaken or arising on the part of BCLC under this Agreement are given solely to the Landlord (together with its successors and permitted assigns) and do not confer any rights on or in favour of either Tenant or any other Person. The parties acknowledge that nothing in this Agreement will, except as between Landlord and BCLC as expressly set out in this Agreement, affect the rights of BCLC under the Tenant OSA. Except where it would cause BCLC to be in default of its express obligations hereunder, nothing in this Agreement will fetter or otherwise interfere with or limit the rights, powers and authority of BCLC to enact, amend, administer, comply with, and enforce, the Tenant OSA, any Gaming Laws, or any other laws, regulations or rules, and unless otherwise expressly provided for in this Agreement neither the Landlord nor either of the Tenants is entitled to claim or receive any compensation or other relief whatsoever as a result of BCLC enacting, amending, administering, complying with, or enforcing, the Tenant OSA, any Gaming laws or any other laws, regulations or rules.

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11. General

(a) Expenses

Except as otherwise provided in this Agreement, each Party shall pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement.

(b) Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or email:

(i) in the case of a notice to the Landlord at:

[NTD: insert information]

Attention:        [NTD: insert information]

Facsimile:         [NTD: insert information]

Email:               [NTD: insert information]

(ii) in the case of a notice to BCLC at:

74 West Seymour Street

Kamloops, British Columbia

V2C 1E2

Attention:     Legal Services

Email:               legalservices@bclc.com

(iii) in the case of a notice to The Beneficial Tenant at:

4331 Dominion Street Burnaby,

British Columbia V5G 1C7

Attention:        [NTD: insert information]

Facsimile:         [NTD: insert information]

Email:               [NTD: insert information]

Any notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. If the notice is delivered or transmitted after 5:00 p.m. local time or if the day is not a Business Day then the notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving notice to the other Parties in accordance with the provisions of this Section.

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(c) Assignment

(i) The Landlord may only assign its rights under this Agreement to an assignee of its rights under the Lease and in compliance with all applicable Gaming Laws. If the Landlord assigns its rights under the Lease, this Agreement shall be assigned concurrently to the Landlord’s assignee and the Landlord shall cause the assignee to assume the Landlord’s obligations under this Agreement and to agree to be bound by the terms of this Agreement. Upon such assumption agreement being executed and delivered to the other Parties, the Landlord shall be relieved of all of its obligations under this Agreement except with respect to any default under this Agreement which occurred prior to the effective date of the assignment. In addition, the Landlord may merely collaterally assign its rights under this Agreement to any lender (or to such lender’s nominee), and in connection therewith, the rights of Landlord may be assigned to such lender (or its nominee) or to an owner of the Landlord’s interest in the land which is the subject of the Lease; provided however that: (A) such assignee must also be an assignee (or assignee by way of security) of the Landlord’s interest in the Lease; and (B) such assignee may only exercise the rights of the Landlord hereunder at such time or times as it is performing or causing to be performed the obligations of the Landlord under the Lease and this Agreement.

(ii) Tenant may not assign its rights under this Agreement. If the Nominal Tenant or the Beneficial Tenant assigns its rights under the Lease or Covenant Agreement, as applicable, the Tenant shall cause the assignees and BCLC to enter into a New Tri Party Agreement, and thereafter the Tenant and BCLC shall be relieved of all of their respective obligations under this Agreement except with respect to any default under this Agreement or the Lease which occurred prior to the effective date of such New Tri Party Agreement.

(d) Amendment

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be bound.

(e) Governing Law

This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable in the Province of British Columbia, including without limitation, to the extent applicable, Gaming Laws.

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(f) Enurement

This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

(g) Further Assurances

The Parties shall, with reasonable diligence, do all things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement. Each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.

(h) Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile or other electronic means and all the counterparts and facsimile or other electronic transmissions together constitute one and the same agreement.

– signature page(s) immediately follow(s) –

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IN WITNESS WHEREOF the Parties have duly executed this Agreement.

[INSERT LANDLORD NAME]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
BRITISH COLUMBIA LOTTERY CORPORATION
Per:
	Name:
	Title:
Per:
	Name:
	Title:
GATEWAY CASINOS & ENTERTAINMENT LIMITED
Per:
	Name:
	Title:
Per:
	Name:
	Title:
[INSERT TENANT NAME]
Per:
	Name:
	Title:
Per:
	Name:
	Title:

SCHEDULE “K”

EXCLUDED LANDS

Grand Villa Casino / Parking Lot 4405 Norfolk Street, Burnaby, BC

Parcel Identifier: 000-847-054

Lot 51, Except Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 62993

SCHEDULE “L”

FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies, on behalf of GATEWAY CASINOS & ENTERTAINMENT LIMITED, a corporation formed under the laws of Canada (the “Company”), as Chief Financial Officer of the Company and not in his individual capacity, that:

(1)        I am the duly elected Chief Financial Officer of the Company;

(2)        I have reviewed the terms of that certain Lease dated as of TBD between                     , as the tenant thereunder (“Tenant”), and                      as the landlord thereunder (“Landlord”) (said Lease, as amended, restated, supplemented or otherwise modified in accordance with the terms of the Lease and in effect as of the date hereof being referred to as the “Lease Agreement”). The terms defined therein and not otherwise defined in this Certificate (including Attachment No. 1 annexed hereto and made a part hereof) being used in this Certificate as defined in the Lease. I have also reviewed the Company’s (and its Affiliates’) financial statements, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and condition of Company and its Affiliates during the accounting period(s) covered by Attachment No. 1; and

(3)        The examination described in paragraph (2) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Default or which would, with the passage of time, the giving of notice or both, would constitute an Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as follows:                     

                    .

The foregoing certifications, together with the computations set forth in Attachment No. 1 and the financial statements delivered with this Certificate in support hereof, are made and delivered this                      pursuant to Section      of the Lease Agreement.

GATEWAY CASINOS & ENTERTAINMENT LIMITED
By:    Name:	Bradley
Bardua    Title:	Chief
Financial Officer

ATTACHMENT NO. 1

TO COMPLIANCE CERTIFICATE

This Attachment No. 1 is attached to and made a part of a Compliance Certificate dated as of                      and pertains to the period from                      to                      [four Fiscal Quarters]. Section references herein relate to subsections of the Lease Agreement.¹

Total Net Leverage Ratio (amounts in millions of $ except for ratios)

1.	Indebtedness of the Covenantor and its Subsidiaries (net of unrestricted cash and Cash Equivalents of the Covenantor and its Subsidiaries, except Cage Cash):
		$        .
2.	Consolidated Adjusted EBITDAR for the trailing four Fiscal Quarters ending on                     :	$
3.	Total Net Leverage Ratio (1):(2):	x.xx:1.00
4.	Maximum ratio permitted under Section 13.19 of the Lease:	7.00:1.00

Pro Forma Adjusted EBITDA [TO BE GIVEN SO LONG AS APPLICABLE]

1)  Covenantor’s consolidated Adjusted EBITDA for the trailing four Fiscal Quarters ending on                 , excluding Adjusted EBITDA attributable to assets that were the subject of a Disposition during such period:	$	x,xxx
a)  This will certify that there have been no asset Dispositions during the trailing four Fiscal Quarters ending on                  resulting in an Event of Default under clauses (r) or (s) of the definition of Event of Default in the Lease.

¹  In the event of any conflict or inconsistency between the provisions of this Compliance Certificate and the Lease Agreement, the provisions of the Lease Agreement shall control.

SCHEDULE “J”

EXISTING LEASES

1. Lease Agreement dated August 1, 2016 between Gateway Casinos & Entertainment Limited, as landlord, Spa Tru Holdings Inc., as tenant, and Michael Quinn and Jonas Laforge, collectively as indemnifiers, as amended by an amending agreement dated February 15, 2017, as further amended, extended, renewed and assigned from time to time.

2. Lease Agreement dated January 6, 2010 between Gateway Casinos & Entertainment Inc., as landlord, 0870328 B.C. Ltd, as tenant, and Tropika Malaysian Cuisine Inc., as indemnifier, as amended by amending agreements dated January 14, 2011 and October 12, 2017, as further amended, extended, renewed and assigned from time to time.

3. Lease Agreement dated January 10, 2006 between Star of Fortune Gaming Management (B.C.) Corp, as landlord, and Lysias Enterprises (Canada) Ltd. doing business as Kirin Restaurants, as tenant, as amended, extended, renewed and assigned from time to time.

4. Lease Agreement dated August 13, 2010 between Can west Equities Ltd. And David Arthur Seller, executor of the Estate of Arthur Elmer Seller, as landlord, and Fraser Health Authority, as tenant, as amended, extended, renewed and assigned from time to time.

5. Lease Agreement dated February 11, 1998 between Villa Hotels Ltd., as landlord, and Clearnet PCS Inc., as tenant, as amended, extended, renewed and assigned from time to time.

6. Lease Agreement dated November 30, 2015 between Gateway Casinos & Entertainment Limited, as landlord, and IVS Holdings Ltd., as tenant (on a joint and several basis), as amended, extended, renewed and assigned from time to time.

7. Master Licensing Agreement dated October 28, 2008 between Gateway Casinos & Entertainment Inc., as licensee, and Starbucks Corporation, as licensor, as amended by amending agreements dated March 26, 2010 and July 19, 2012, as further amended, extended, renewed and assigned from time to time.

8. Assignment, Assumption and Consent Agreement dated January 14, 2011 between Gateway Casinos & Entertainment Limited, as assignee, and Gateway Casinos & Entertainment Inc., as assignor, as amended, extended, renewed and assigned from time to time (in respect of master licensing agreement in #7 above).

9. Statutory Right of Way Agreement dated April 1, 2004 between Gateway Casinos Ltd. Partnership Inc., as grantor, and Microcell Connexions Inc., as grantee, as amended by an addendum dated September 28, 2004, as renewed by letter agreement dated January 17, 2004, and as further amended, extended, renewed and assigned from time to time.

10. Letter Agreement dated May 23, 2007 between Rogers and Gateway (Villa Casino, Hotel & Convention Centre) and related subsequent email correspondence (in respect of statutory right of way agreement in #9 above).

11. The Nominee Ground Leases.

12. Site Lease dated October 1, 1997 between Villa Hotels Ltd., as lessor, and Clearnet Inc., as lessee, as amended, extended, renewed and assigned from time to time.

13. Agreement for Roof Usage dated June 1, 2002 between Radisson Hotel Burnaby, as grantor, and Net-Conex Business Solutions Inc., as grantee, as amended, extended, renewed and assigned from time to time.

14. Building Lease Agreement dated July 6, 2009 between Gateway Casinos & Entertainment Inc., as landlord, and Globalive Wireless Management Corporation, as tenant, as amended, extended, renewed and assigned from time to time.

15. Building Lease Agreement dated November 13, 2009 between Gateway Casinos & Entertainment Inc., as landlord, and Globalive Wireless Management Corporation, as tenant, as amended, extended, renewed and assigned from time to time.

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SCHEDULE “K”

MASTER LEASE BENEFICIAL COVENANTS FORM

COVENANT AGREEMENT

AGREEMENT made as of the [●] day of [●], 2017.

BETWEEN:

[●]

(hereinafter called the “Covenantor”)

- and -

[●]

(hereinafter called the “Landlord”)

- and -

[●]

(hereinafter called the “Tenant”)

WHEREAS concurrently with the execution and delivery of this Agreement, the Landlord has entered into a Lease with the Tenant of certain lands and buildings located in the City(ies) of                      as set forth in the Lease;

AND WHEREAS the Tenant has entered into the Lease and will hold the Tenant’s Interest as the nominee and bare trustee of and for the Covenantor;

AND WHEREAS the Covenantor has authorized, instructed and directed the execution and delivery by the Tenant of the Lease and all other Lease Documents, including this Agreement;

AND WHEREAS it is a condition of the Landlord’s execution and delivery of the Lease and all other Lease Documents that the Covenantor and Tenant execute and deliver this Covenant Agreement in favour of the Landlord, and the Landlord would not enter into the Lease and the other Lease Documents without such condition being satisfied;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the Landlord entering into the Lease and all other Lease Documents and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Covenantor and Tenant covenant and agree with the Landlord as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions

Words or terms defined in the Lease and not otherwise defined herein shall have the respective meanings ascribed thereto in the Lease. Whenever used in this Agreement the following words shall have the meanings set out below:

“Agreement”, “this Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions mean or refer to this Agreement as it may be amended, supplemented or restated from time to time in writing by the parties hereto and the expressions “Article” or “Section” followed by a number or letter mean and refer to the specified Article or Section of this Agreement.

“Lease” means the lease to be made as of the date hereof between the Landlord and the Tenant, as it may be amended, supplemented, restated, extended, renewed or replaced from time to time by the Landlord or any of its successors or assigns, as landlord, and the Tenant, or any of its permitted successors and assigns, as tenant.

“Lease Documents” means:

(a) the Lease; and

(b) [●NTD: Specific agreements to be listed];

and “Lease Document” means any of them.

“Obligations” has the meaning ascribed thereto in Section ●.

“Tenant” means Tenant and its permitted successors and assigns.

“Tenant’s Interest” has the meaning ascribed thereto in Section ●.

1.2 Extended Meanings

Any reference in this Agreement to any act or statute or any section thereof shall be deemed to be a reference to such act, statute or section as amended or re-enacted from time to time. Any defined term used in the singular preceded by “any” shall be taken to indicate any number of the members of the relevant group, category or class.

K - 2

1.3 Rules of Construction

In this Agreement:

(a) words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine and neuter genders and vice versa;

(b) the words “include”, “includes” and “including” mean “include”, “includes” or “including”, in each case, “without limitation”;

(c) reference to any agreement or other instrument in writing means such agreement or other instrument in writing as amended, modified, extended, renewed, replaced or supplemented from time to time; and

(d) whenever any payment to be made or action to be taken hereunder is required to be made or taken on a day other than a Business Day, such payment shall be made or action taken on the next following Business Day, with time being of the essence.

1.4 Captions

The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

1.5 Applicable Laws

This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. The parties agree that the Supreme Court (before a judge alone, with no jury) in the Province of British Columbia shall have the exclusive jurisdiction to hear and settle any action, suit, proceeding or dispute in connection with this Agreement and the parties hereto irrevocably attorn to the exclusive jurisdiction of such court.

ARTICLE 2

CONSENT OF COVENANTOR

2.1 Consent of Covenantor

The Covenantor, in its capacity as the beneficial owner of the tenant’s interest in the Lease and the other Lease Documents, and of the tenant’s leasehold interest in the Lands and the Buildings (collectively, the “Tenant’s Interest”), hereby consents to the execution and delivery of the Lease Documents by the Tenant, and the completion of the transactions in connection therewith, and hereby irrevocably authorizes and directs the Tenant to execute and deliver, on its own behalf and on behalf of the Covenantor, the Lease and all other Lease Documents, and the Covenantor hereby ratifies and confirms all actions of the Tenant in connection therewith.

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2.2 Agreement of Covenantor

The Covenantor hereby agrees:

(a) that it is and shall be bound by all the provisions, covenants, undertakings, obligations and agreements on the part of the Tenant contained in each of the Lease and the other Lease Documents to be paid, done, observed, kept or performed by the Tenant as if made or granted by the Covenantor, mutatis mutandis;

(b) that all documents and instruments now or hereafter made or granted by the Tenant in or pursuant to the Lease or any other Lease Documents are binding on the Covenantor and the Covenantor’s right, leasehold title and interest in and to the Lands and the Buildings, and are hereby made and granted by the Covenantor, in each case on the terms and subject to the limitations contained in the Lease and the other Lease Documents;

(c) to do, observe, pay, keep and perform every provision, covenant, obligation and agreement contained in the Lease and all other Lease Documents on the part of the Tenant or the Covenantor to be done, observed, paid, kept or performed;

(d) that nothing contained in this Agreement shall alter, prejudice or limit the rights or remedies of Landlord under the Lease or the other Lease Documents, nor shall it release or derogate from the covenants, undertakings, obligations and agreements of the Tenant or its liabilities in respect thereof; and

(e) that the recitals of this Agreement are true and correct.

2.3 Obligations of Covenantor

The Covenantor hereby absolutely, unconditionally and irrevocably, jointly and severally, covenant and agree, as primary obligors, to and in favour of the Landlord to fully and promptly do, observe, pay, keep and perform each and every provision, covenant, obligation and agreement contained in the Lease or any other Lease Document to be done, observed, paid, kept or performed by the Tenant or the Covenantor. The provisions, covenants, obligations and agreements contained in this Agreement to be paid, done, observed, kept or performed by the Covenantor are collectively referred to as the “Obligations”. For greater certainty, this Agreement does not constitute a guarantee by the Covenantor of the obligations or liabilities of the Tenant, nor does this Agreement constitute or create a surety relationship, it being understood and agreed that: (i) the obligations and liabilities of the Tenant under the Lease and the other Lease Documents are primary obligations and liabilities of the Covenantor, and were incurred by the Tenant as nominee and bare trustee for the Covenantor; and (ii) the Covenantor and the Tenant are jointly and severally liable for all of the obligations and liabilities of the Tenant under the Lease and each of the other Lease Documents.

2.4 Exercise of Rights

The Covenantor hereby acknowledges and confirms that all rights and remedies of the Landlord as against the Tenant contained in the Lease or any other Lease Documents shall be exercisable by the Landlord against the Tenant and the Covenantor, and against each of their respective rights, titles and interests in and to the Lease and the other Lease Documents.

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2.5 Authority of Tenant

The Landlord shall not be required to inquire into the power or authority of the Tenant with respect to any act done, or purported to be done, by the Tenant in respect of the Lands or the Buildings or the Lease or other Lease Documents on behalf of the Covenantor, including without limitation those acts done, or purported to be done, by the Tenant at any time prior to, on, or after the date hereof; and the Covenantor hereby agrees to be bound by and hereby ratifies and confirms all such acts done by the Tenant, including, without limitation, any amendment, supplement, restatement, extension, renewal or replacement at any time, and from time to time, of the Lease or any of the other Lease Documents that are executed and delivered by the Tenant. The Covenantor also agrees that all acts and omissions of the Tenant shall be deemed for all purposes of this Agreement, the Lease and each of the other Lease Documents, to be the acts and omissions of the Covenantor. Without intending to limit in any way the foregoing provisions hereof, including Section 2.3 hereof, Tenant hereby further confirms to Landlord that in entering into the Lease and the other Lease Documents, Tenant is acting as the nominee and bare trustee of and for the Covenantor.

2.6 Indemnity

The Covenantor agrees to indemnify and save harmless the Landlord against and from all losses, damages, costs and expenses which the Landlord may sustain, incur, or be or become liable for by reason of any default by the Tenant under the Lease or any of the other Lease Documents. The Landlord shall not be bound to exhaust its rights, recourse or remedies against the Tenant or any other Person or against the Lease or any of the other Lease Documents before pursuing and enforcing its rights, recourse and remedies against the Covenantor.

This indemnity shall survive the taking of any judgment by the Landlord against the Tenant or the Covenantor or any other Person, or the realization by the Landlord under any security whatsoever or otherwise; and this indemnity shall remain in full force and effect until such time as the Landlord receives full payment.

Without prejudice to the generality of the foregoing provisions, and unless otherwise agreed in writing between the Landlord and the Covenantor, the liability of the Covenantor for the obligations and liabilities of the Tenant under the Lease shall not be impaired, discharged or affected by:

(a) the release (other than a release of the Covenantor or Tenant specifically contemplated by the Lease) of any Person liable in whole or in part under the Lease or any of the other Lease Documents;

(b) any other dealing by the Landlord (i) with any Person which has any obligations under the Lease or any of the other Lease Documents, or (ii) with any property which is the subject of, or constitutes security for, any obligations under the Lease or any of the other Lease Documents;

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(c) any settlement, extension, modification or variation in respect of the Lease or any of the other Lease Documents;

(d) the loss by operation of law of any right of the Landlord against the Tenant;

(e) the loss or destruction of any property;

(f) the taking of any judgment by the Landlord against the Tenant, the Covenantor or any other Person;

(g) any modification of any of the provisions of the Lease or any of the other Lease Documents;

(h) the loss of any Gaming Authority Requirements necessary for the gaming operations at the Demised Premises;

(i) a termination of the OSA with respect to the gaming operations at the Demised Premises, or any suspension of Services thereunder with respect to the gaming operations at the Demised Premises; or

(j) any act or omission whatsoever of the Landlord under the Lease or any of the other Lease Documents;

in every case made or done by the Landlord either with or without notice to the Covenantor.

ARTICLE 3

GENERAL

3.1 Obligations as Covenants

Each agreement and obligation of the Covenantor in this Agreement, even though not expressed as a covenant, shall be considered for all purposes to be a covenant.

3.2 Accounts

Any accounts settled or stated by or between the Landlord and the Tenant shall be accepted by the Covenantor as conclusive evidence that the balance or amount thereby appearing due to the Landlord is so due.

3.3 Subrogation

No payment or payments made by the Covenantor to the Landlord pursuant to this Agreement shall entitle the Covenantor to exercise, by implied assignment, subrogation or otherwise, any rights or remedies which may be possessed by and exercisable by the Landlord, as lessor, under the Lease, or under any of the other Lease Documents; and the Covenantor shall be limited to pursuing such rights, if any, for indemnity as it may have against the Tenant.

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3.4 No Set-Off

The Covenantor shall make all payments hereunder without regard to any defence, counterclaim or right of set-off available to the Covenantor or Tenant, all of which are hereby waived by the Covenantor.

3.5 No Waiver, Remedies

No failure on the part of the Landlord to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement are cumulative and are in addition to, and not in lieu of, any remedies provided by law or in equity or under the Lease or any of the other Lease Documents.

3.6 Waiver of Notice of Acceptance

The Covenantor hereby expressly waives diligence, presentment, formalities and notice of acceptance of this instrument.

3.7 Notices

Any Notice, demand, request, approval, designation and other communication desired, required, authorized or permitted to be given or made hereunder by any party hereto to the other shall be in writing and shall be given by personal delivery or by registered, prepaid post mailed in Canada, addressed, return receipt requested:

(a) In the case of the Landlord, to:

[●NTD: Vendor to provide]

Attention:        ●

(b) In the case of the Tenant or the Covenantor to:

Attention:        Tolek M. Strukoff, Chief Legal Officer & Corporate Secretary and Brad Bardua, Chief Financial Officer

with a copy to:

Bennett Jones LLP

Suite 3400, 1 First Canadian Place

P. O. Box 130

Toronto, ON M5X 1A4

Attention:        Simon P. Crawford

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Any party may, by notice as aforesaid, designate a different address or addresses for notices, demands, requests or communications to it. Any notice given as aforesaid shall be conclusively deemed to have been received on the date of such personal delivery (provided such day is a business day and if not then on the next business day) or on the third business day following the mailing thereof, as the case may be. In the event of a labor dispute, postal interruption or a reasonable anticipation thereof, all notices required to be given under this Lease shall be delivered personally. A business day shall be a day other than a Saturday, Sunday and statutory holiday.

3.8 Further Assurances

The Covenantor shall at all times do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged or delivered, all such further acts, deeds, instruments and assurances as the Landlord may reasonably require in order to give effect to the provisions of this Agreement. Without limiting the foregoing, the Covenantor agrees that at any time and from time to time, upon request of the Landlord, the Covenantor shall deliver a written instrument, duly executed, which certifies that this Agreement has not been amended or modified and is in full force and effect, or if there is a modification or amendment, that this Agreement is in full force and effect as modified and amended, and stating the modifications or amendments, and setting out such other particulars as to the status of this Agreement, provisions thereof and obligations of the Covenantor thereunder that the Landlord may reasonably require.

3.9 Entire Agreement

This Agreement constitutes the entire agreement between the parties hereto pertaining to the Obligations and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, with respect thereto.

3.10 Amendment in Writing

This Agreement may only be amended or supplemented by a written agreement signed by both the Covenantor and the Landlord.

3.11 Time

Time shall be of the essence of this Agreement.

3.12 Severability

If any provision herein contained is determined to be void, voidable or unenforceable, in whole or in part, by a court of competent jurisdiction, such determination shall not affect or impair, and shall not be deemed to affect, or impair, the validity of any other covenant or provision herein contained and each such covenant and provision is hereby declared to be separate, severable and distinct.

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3.13 Successors and Assigns

The rights of the Landlord pursuant to this Agreement, including all rights against the Covenantor or Tenant, shall enure to the benefit of the successors and assigns of the Landlord, including any Person who hereafter becomes the landlord under the Lease in compliance with the terms of the Lease. The obligations and liabilities of the Covenantor and Tenant hereunder will benefit and be enforceable by all such successors and permitted assigns of the Landlord and shall bind the respective heirs, executors and legal representatives and the successors and assigns of the Covenantor and of the Tenant. Save as may be permitted by the terms of the Lease, the obligations and liabilities of the Covenantor or the Tenant under this Agreement shall not be assignable, and unless otherwise expressly provided in the Lease, neither the Covenantor nor the Tenant shall be released from its Obligations and liabilities hereunder or under the Lease notwithstanding any sale, conveyance, Transfer, charge, Mortgage or other Encumbrance, assignment or other dealings with the Tenant’s Interest (or any part thereof or interest therein) or any other action or transaction of any nature whatsoever involving, directly or indirectly, the Tenant or the Covenantor, or any Change of Control. Without limiting the foregoing, Landlord may assign its rights hereunder to any Mortgagee.

3.14 Copy of Lease

The Covenantor hereby confirms that it has received a fully executed copy of the Lease and of all of the other Lease Documents, and has received full disclosure of all matters and information relating to the transaction contemplated in the Lease and all of the other Lease Documents.

3.15 Confirmation of Continuing Effect

Without derogating from any other provisions of this Agreement, including Section 2.5, the Covenantor agrees with the Landlord that if at any time and from time to time the Lease or any the other Lease Documents is being amended, supplemented, restated, extended, renewed or otherwise dealt with, if requested by the Landlord, the Covenantor shall enter into an agreement in favour of the Landlord confirming that this Agreement continues in full force and effect.

3.16 Proceedings

No action or proceedings brought or instituted under this Agreement, and no recovery in pursuance thereof, shall be a bar or defence to any further action or proceeding which may be brought under this Agreement by reason of any further default hereunder or in the performance and observance of any of the provisions, covenants, obligations or agreements contained in the Lease and any of the other Lease Documents.

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IN WITNESS WHEREOF each of the Covenantor and the Landlord have executed, sealed and delivered this Agreement.

●
By
	Name:
	Title:
By
	Name:
	Title:
I/We have authority to bind the Corporation.
●
By
	Name:
	Title:
By
	Name:
	Title:
I/We have authority to bind the Corporation.
●
By
	Name:
	Title:
By
	Name:
	Title:
I/We have authority to bind the Corporation.

SCHEDULE “L”

LANDLORD BCLC AGREEMENT FORM

THIS AGREEMENT made as of ●.

BETWEEN:

●

(“Landlord”)

- and -

BRITISH COLUMBIA LOTTERY CORPORATION

(“BCLC”)

- and -

GATEWAY CASINOS & ENTERTAINMENT LIMITED

(the “Beneficial Tenant”)

- and -

●

(the “Nominal Tenant”)

RECITALS:

A. The Landlord and the Nominal Tenant are parties to a Lease dated [●] (the “Lease”) with respect to certain premises (the “Premises”) located at [●] dated [●], British Columbia, as more particularly described in the Lease.

B. The Beneficial Tenant and BCLC are parties to an operational services agreement dated [●] providing for Services to be performed at the Premises (as amended, supplemented, restated, modified, supplemented, assigned or replaced from time to time, collectively, the “Tenant OSA”).

C. The Landlord, the Nominal Tenant and the Beneficial Tenant are parties to the Covenant Agreement with respect to the Lease. For the sake of clarity, references in this Agreement to the covenants and obligations of the Nominal Tenant under the Lease shall include the covenants and obligations of the Beneficial Tenant (as the beneficial owner of the tenant’s interest in the Lease) as provided in the Covenant Agreement.

D. Pursuant to Section [●] of the Lease, the Nominal Tenant is obligated to maintain the Tenant OSA in good standing.

E. Pursuant to the Tenant OSA, the Beneficial Tenant and BCLC have agreed to enter into this Agreement.

FOR VALUE RECEIVED, the Parties agree as follows:

1. Interpretation

(a) Definitions

In this Agreement all defined terms not otherwise defined have the respective meanings set out below:

“Affiliate” of any person or entity means, at the time this determination is being made, any other person or entity controlling, controlled by or under common control with such person or entity in each case, whether directly or indirectly, and “control” and any derivation thereof, means in possession, directly or indirectly, of the powers to direct the management and policies of a person or entity, whether through the ownership of voting securities or otherwise.

“Agreement” means this agreement, including all schedules and all amendments or restatements as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement.

“BCLC” has the meaning ascribed above, and includes its permitted assigns hereunder.

“BCLC Exercise” has the meaning ascribed thereto in Section 6(a)(i).

“BCLC Property” means the Revenue, the Net Win, the Chip Liability and any account in which the Corporation may permit the deposit of the Chip Liability, the Corporation Data, the Computer System, the Corporation’s Confidential Information, the BCLC IP and the Gaming Supplies, all as defined in the Tenant OSA.

“Business Day” means any day, other than a Saturday or Sunday or statutory holiday in the Province of British Columbia.

“Covenant Agreement” means a covenant agreement dated as of [●] between the Tenant and the Landlord, which confirms that the Beneficial Tenant is the beneficial owner of the leasehold interest demised pursuant to the Lease and that the Nominal Tenant holds all rights and obligations thereunder as nominee and bare trustee for the Beneficial Tenant; and pursuant to which the Beneficial Tenant covenants and agrees in favour of Landlord that the Beneficial Tenant is bound by all obligations, covenants and liabilities of Nominal Tenant under the Lease as if the Beneficial Tenant were the tenant thereunder.

“Default Notice” has the meaning ascribed to it in the Tenant OSA.

“Gaming Laws” means any applicable federal, provincial, or local statutes, ordinances, regulations, rules, codes, orders, judgments, decrees, licenses or other

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requirements including approvals by applicable governmental authorities pursuant to which casino or other gaming activities are conducted.

“Lease” has the meaning given to it in Recital A.

“Lease Assumption Date” has the meaning ascribed thereto in Section 6(a)(ii).

“Lease Cure Period” has the meaning ascribed thereto in Section 5(c).

“Lease Default Notice” has the meaning ascribed thereto in Section 5(c).

“Monetary Lease Default Notice” has the meaning ascribed thereto in Section 2.

“New Tri Party Agreement” has the meaning ascribed thereto in Section 6(c)(iii).

“OSA Termination Notice” has the meaning ascribed thereto in Section 5(a).

“OSAs” means all operational services agreements (including the Tenant OSA) between the Tenant or any of its Affiliates and BCLC from time to time.

“Parties” means BCLC, Landlord and the Tenant; and “Party” means any one of them.

“Permitted Assignee” means BCLC or an entity that is permitted to take an assignment of the Beneficial Tenant’s interest in the Lease in accordance with the terms and provisions of the Lease.

“Premises” has the meaning given to it in Recital A. “Rent” has the meaning ascribed thereto in the Lease.

“Rental Arrear” has the meaning ascribed thereto in Section 2.

“Services” has the meaning ascribed thereto in the Tenant OSA as it pertains only to the Premises.

“Step In Period” has the meaning ascribed thereto in Section 4.

“Step In Remedy” has the meaning ascribed thereto in Section 4.

“Tenant” means the Nominal Tenant and the Beneficial Tenant, and from and after any valid assignment of the Nominal Tenant’s or the Beneficial Tenant’s interest in the Lease and/or the Covenant Agreement, as applicable, means (or includes, as applicable) such assignees, so that at all times the reference to Tenant hereunder includes both any entity that has a beneficial interest in the tenant’s interest in the Lease, as well as any entity that is acting as a nominee and bare trustee as tenant under the Lease.

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“Tenant OSA” has the meaning given to it in Recital A.

“Third Party Operator” has the meaning ascribed thereto in Section 4.

“Undistributed Provincial Gaming Revenue” means amounts that are due, owing and payable by BCLC to a Tenant pursuant to the Tenant OSA after BCLC’s set offs, adjustments and withheld amounts, from time to time in accordance with the Tenant OSA, provided, however, if all gaming operations in the Province of British Columbia in which a Tenant or any of its Affiliates has an interest are not included in such amounts, then Undistributed Provincial Gaming Revenue shall also include all amounts that are due, owing and payable by BCLC to a Tenant or any of its Affiliates pursuant to all OSAs after BCLC’s set offs, adjustments and withheld amounts in accordance with such OSAs.

(b) Headings

Headings are inserted for convenience of reference only and do not affect the construction or interpretation of this Agreement.

(c) Number and Gender

Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

(d) Severability

If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable the provision shall, as to that jurisdiction, be ineffective only to the extent of the restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement.

(e) Entire Agreement

This Agreement constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise. There are no covenants, promises, warranties, representations, conditions or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and any document required to be delivered pursuant to this Agreement.

(f) Time

Time is of the essence in the performance of the Parties’ respective obligations.

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(g) Time Periods

Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

2. Payment of Rent under the Lease from Undistributed Provincial Gaming Revenue

(a) If BCLC receives written notice from the Landlord (a “Monetary Lease Default Notice”) that any Rent or any other monetary amount under the Lease is then due and unpaid beyond any applicable cure period provided for in the Lease (a “Monetary Default”, the dollar amount so set out in the Monetary Lease Default Notice being the “Rental Arrear”) and a reference to the direction provided in this Section 2, then BCLC is hereby irrevocably authorized and directed by the Beneficial Tenant to pay to the Landlord funds available from the Tenant’s interest in any Undistributed Provincial Gaming Revenue that are in its possession after the date of receipt of such Monetary Lease Default Notice, until such Rental Arrear has been paid in full. BCLC acknowledges and accepts that the foregoing direction by the Tenant to BCLC is irrevocable by the Tenant. Provided such payments are permitted by applicable law (including without limitation bankruptcy and insolvency, fraudulent preference and conveyance laws) and BCLC has not received a notice from any third party of any other claims to such amounts, BCLC hereby agrees to comply with such irrevocable direction. In the event of any such competing claims or disputes over such amounts, BCLC shall pay the funds into court or shall pay the Rental Arrears to the Landlord. For greater certainty, despite the termination of this Agreement, if the Landlord was prevented by court order or other applicable law from delivering a Monetary Lease Default Notice for Rental Arrear that accrued prior to such termination, at such time that BCLC does receive a Monetary Lease Default Notice for such Rental Arrear, BCLC will comply with this Section 2. If a Rental Arrear exists at such time as this Agreement terminates, the provisions of Section 2 hereof shall continue to apply to the Parties until such time as such Rental Arrear has been paid in full.

3. Suspension of Services

The parties acknowledge that BCLC may, in its sole discretion, suspend Beneficial Tenant’s right to perform Services in whole or in part. In the event BCLC suspends all or substantially all of the Services, BCLC will promptly provide written notice thereof to the Landlord.

4. BCLC Step In Remedy

(a) The parties acknowledge that BCLC may, in its sole discretion, either by itself or by engaging a third party service provider selected by BCLC (a “Third Party

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Operator”), take such steps as it considers necessary or expedient to mitigate, rectify or protect against a default of the Tenant OSA, including performing any of the Services (the “Step In Remedy”), for such period as BCLC determines in its sole discretion (the “Step In Period”). For the sake of clarity, the parties acknowledge that during any Step In Period, the Tenant OSA shall continue in full force and effect and the provisions of Sections 2 hereof shall continue to be in effect as to any Rental Arrear as to which a Monetary Lease Default Notice has been given to BCLC.

(b) In connection with BCLC exercising any Step In Remedy where it is performing or causing to be performed, all or substantially all of the Services at the Premises from time to time, BCLC shall, in accordance with its rights under the Tenant OSA, treat payment of Rent and Sales Tax (each as defined in the Lease) due from time to time during such Step In Period in the same manner as BCLC treats other third-party costs and expenses incurred in exercising its rights under the Tenant OSA during the same period (excluding, for clarity, any Rent or associated Sales Tax accruing in any period prior to such Step In Period).

(c) BCLC agrees to provide written notice to the Landlord promptly after exercising a Step In Remedy that includes BCLC or any Third Party Operator performing Services at the Premises.

5. Covenants to Provide Notice

(a) The parties acknowledge and agree that, pursuant to and in accordance with the terms and conditions of the Tenant OSA, BCLC may terminate the Tenant OSA by notice to the Tenant. If BCLC terminates the Tenant OSA then it will concurrently with providing notification of such termination to the Tenant, provide notice to the Landlord (an “OSA Termination Notice”).

(b) If an Event of Default (as defined in the Tenant OSA) has occurred, all applicable cure periods have expired without Tenant remedying such Event of Default, and BCLC provides notice to the Tenant that it is exercising any of its remedies under the Tenant OSA as a result thereof, then BCLC will concurrently with the provision of such notice to the Tenant, provide such notice to the Landlord.

(c) If at any time or times a Tenant is in default under the Lease (for greater certainty, including without limitation a Monetary Default), the Landlord will concurrently with the delivery of notice of such default to the Tenant, deliver such default notice to the BCLC (the “Default Notice”). If at any time or times an Event of Default (as such term is defined in the Lease) under the Lease has occurred, the Landlord may elect to commence the Option Period (as defined below) by providing written notice to BCLC (the “Option Period Notice”). If the Landlord terminates the Lease then it will concurrently with providing notification of such termination to the Tenant, provide notice to BCLC (a “Lease Termination Notice”).

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6. Option

(a) Upon the earliest time that (i) BCLC delivers an OSA Termination Notice to the Landlord pursuant to Section 5(a) above, or (ii) BCLC receives an Option Period Notice or Lease Termination Notice pursuant to Section 5(c) above, then BCLC shall have the exclusive and irrevocable option to assume the Lease (the “Option”), which Option is exercisable within 30 Business Days (the “Option Period”) of the earliest of BCLC’s receipt of the Option Period Notice or the Lease Termination Notice or BCLC’s delivery of the OSA Termination Notice, as applicable. If BCLC wishes to exercise the Option, then:

(i) within the Option Period, BCLC must deliver to the Landlord and the Tenant written notice (the “BCLC Exercise”) that it has irrevocably exercised its Option; and

(ii) within 30 Business Days the BCLC Exercise, BCLC and Landlord shall enter into an assumption agreement in favour of the Landlord (the date of such agreement being the “Assumption Date”), assigning the Lease to BCLC and confirming that BCLC agrees to be bound by all terms of the Lease arising in the period from and after the Assumption Date, provided that (other than as set out below) (A) it shall not be a condition that defaults under the Lease shall be cured concurrently or prior to such assumption becoming effective, and (B) neither BCLC nor any Permitted Assignee shall be liable for any act or omission of the Tenant, nor any default of the Tenant under the Lease occurring prior to the Assumption Date, including without limitation a Monetary Default, nor subject to any set-offs or defences which the Landlord might have against the Tenant, and the Landlord shall provide BCLC and any Permitted Assignee with a release of such acts, omissions and defaults; and (C) the Tenant shall remain solely liable to the Landlord for all such defaults, acts, omissions occurring prior to the Assumption Date. Notwithstanding the foregoing, (1) BCLC acknowledges and agrees that upon the delivery of the BCLC Exercise, it shall be obligated to the Landlord to pay all Rents and applicable Sales Tax accruing under the Lease from and after the BCLC Exercise (and not only from and after the Assumption Date); and (2) nothing in this clause (ii) of Section 6(a) shall negate or limit Landlord’s rights under Section 2 hereof.

(b) Landlord will not terminate the Lease prior to or during the Option Period, and BCLC may exercise, or continue to exercise, the Step In Remedy during the Option Period and, if it exercises the Option, until the Assumption Date.

(c) At any time following the Assumption Date, BCLC shall be permitted to designate a Permitted Assignee, and such Permitted Assignee shall, on the assumption of the lease by such Permitted Assignee (the “Lease Assumption Date”) enter into:

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(i) a new operating services agreement with BCLC for the balance of the term of the Tenant OSA, on substantially the same terms as the Tenant OSA, which shall thereafter be the Tenant OSA for the purposes of the New Tri Party Agreement and the Lease;

(ii) an assumption agreement in favour of the Landlord, agreeing to be bound by all terms of the Lease arising in the period from and after the Lease Assumption Date; provided that (except as set forth in clause (ii) of Section 6(a) above) (A) it shall not be a condition that defaults under the Lease shall be cured concurrently or prior to such assumption becoming effective, and (B) neither BCLC nor any Permitted Assignee shall be liable for any act or omission of the Tenant, nor any default of the Tenant under the Lease occurring prior to the Assumption Date, including without limitation a Monetary Default, nor subject to any set-offs or defences which the Landlord might have against the Tenant and the Landlord shall provide BCLC and any Permitted Assignee with a release of all such acts, omissions and defaults; (C) the Tenant shall remain solely liable to the Landlord for all such defaults, acts, omissions occurring prior to the Assumption Date; and (D) the Permitted Assignee shall be solely liable to the Landlord for all obligations under the Lease after the date of the assumption, and the Landlord shall provide BCLC with a release of all such obligations.

(iii) an agreement, on the same terms and conditions as this Agreement (a “New Tri Party Agreement”), with each of the Landlord and BCLC which Agreement shall govern (and replace this Agreement) with respect to the period from and after (but not prior to) the Lease Assumption Date.

(d) If BCLC does not exercise the Option within the Option Period, then BCLC will remove the BCLC Property from the Premises within 30 Business Days of the earlier of: (i) the date of termination set out in the OSA Termination Notice, or (ii) the end of the Option Period, as applicable.

7. Insolvency Provisions

Each Tenant agrees that in the event it seeks relief under the Companies’ Creditors Arrangement Act, the Bankruptcy and Insolvency Act, or any other bankruptcy, insolvency, or liquidation laws of Canada (or if applicable, any other jurisdiction), it will, to the extent practicable, seek to permit the Landlord and BCLC to exercise their rights under this Agreement, including, without limitation, the right of the Landlord in Section 2 hereof and the rights of BCLC hereunder in Section 4, Section 5 and Section 6 hereof.

8. General BCLC Access Rights

The Landlord acknowledges that, pursuant to the Tenant OSA, the Tenant has granted to BCLC a license to enter into the Premises for the purposes of conducting and managing gaming at the Premises, and, subject to the provisions of this Agreement, including but

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not limited to Section 4, and of the Lease, the Landlord agrees that BCLC may exercise such license and enter into the Premises for the purposes of and in accordance with the terms and conditions of the OSA.

9. BCLC’s Property

Landlord hereby acknowledges that BCLC is the legal and beneficial owner of BCLC’s Property. Landlord hereby waives and releases in favour of BCLC:

(a) any and all rights, including without limitation, rights of distraint, levy and execution which Landlord may now or hereafter have against BCLC’s Property;

(b) any and all statutory liens, security interests or other liens which Landlord may now or hereafter have in the BCLC’s Property; and

(c) all other interests or claims of every nature whatsoever which Landlord may now or hereafter have in or against BCLC’s Property for any rent, storage charges, or other sums due, or to become due, to Landlord pursuant to this Agreement.

BCLC’s Property may be stored, utilized and/or installed at the Premises and shall not be deemed a fixture or part of the real estate but shall at all times be considered personal property. The Parties hereto acknowledge that BCLC shall, and shall be permitted to, remove the BCLC Property from the Premises in accordance with the OSA, so long as BCLC promptly repairs any damage to the Premises caused thereby.

10. BCLC Rights and Obligations

Except as specifically provided for in this Agreement, BCLC has no obligations (whether express, implied, collateral or otherwise) to the Landlord in connection with this Agreement or the Tenant OSA. All of the obligations and liabilities given, undertaken or arising on the part of BCLC under this Agreement are given solely to the Landlord (together with its successors and permitted assigns) and do not confer any rights on or in favour of either Tenant or any other Person. The parties acknowledge that nothing in this Agreement will, except as between Landlord and BCLC as expressly set out in this Agreement, affect the rights of BCLC under the Tenant OSA. Except where it would cause BCLC to be in default of its express obligations hereunder, nothing in this Agreement will fetter or otherwise interfere with or limit the rights, powers and authority of BCLC to enact, amend, administer, comply with, and enforce, the Tenant OSA, any Gaming Laws, or any other laws, regulations or rules, and unless otherwise expressly provided for in this Agreement neither the Landlord nor either of the Tenants is entitled to claim or receive any compensation or other relief whatsoever as a result of BCLC enacting, amending, administering, complying with, or enforcing, the Tenant OSA, any Gaming laws or any other laws, regulations or rules.

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11. General

(a) Expenses

Except as otherwise provided in this Agreement, each Party shall pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement.

(b) Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or email:

(i) in the case of a notice to the Landlord at:

[NTD: insert information]
Attention:	[NTD: insert information]
Facsimile:	[NTD: insert information]
Email:	[NTD: insert information]

(ii) in the case of a notice to BCLC at:

74 West Seymour Street
Kamloops, British Columbia
V2C 1E2
Attention:	Legal Services
Email:	legalservices@bclc.com

(iii) in the case of a notice to The Beneficial Tenant at:

4331 Dominion Street
Burnaby, British Columbia
V5G 1C7
Attention:	[NTD: insert information]
Facsimile:	[NTD: insert information]
Email:	[NTD: insert information]

Any notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. If the notice is delivered or transmitted after 5:00 p.m. local time or if the day is not a Business Day then the notice shall be deemed to have been given and received on the next Business Day.

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Any Party may, from time to time, change its address by giving notice to the other Parties in accordance with the provisions of this Section.

(c) Assignment

(i) The Landlord may only assign its rights under this Agreement to an assignee of its rights under the Lease and in compliance with all applicable Gaming Laws. If the Landlord assigns its rights under the Lease, this Agreement shall be assigned concurrently to the Landlord’s assignee and the Landlord shall cause the assignee to assume the Landlord’s obligations under this Agreement and to agree to be bound by the terms of this Agreement. Upon such assumption agreement being executed and delivered to the other Parties, the Landlord shall be relieved of all of its obligations under this Agreement except with respect to any default under this Agreement which occurred prior to the effective date of the assignment. In addition, the Landlord may merely collaterally assign its rights under this Agreement to any lender (or to such lender’s nominee), and in connection therewith, the rights of Landlord may be assigned to such lender (or its nominee) or to an owner of the Landlord’s interest in the land which is the subject of the Lease; provided however that: (A) such assignee must also be an assignee (or assignee by way of security) of the Landlord’s interest in the Lease; and (B) such assignee may only exercise the rights of the Landlord hereunder at such time or times as it is performing or causing to be performed the obligations of the Landlord under the Lease and this Agreement.

(ii) Tenant may not assign its rights under this Agreement. If the Nominal Tenant or the Beneficial Tenant assigns its rights under the Lease or Covenant Agreement, as applicable, the Tenant shall cause the assignees and BCLC to enter into a New Tri Party Agreement, and thereafter the Tenant and BCLC shall be relieved of all of their respective obligations under this Agreement except with respect to any default under this Agreement or the Lease which occurred prior to the effective date of such New Tri Party Agreement.

(d) Amendment

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be bound.

(e) Governing Law

This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable in the Province of British Columbia, including without limitation, to the extent applicable, Gaming Laws.

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(f) Enurement

This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

(g) Further Assurances

The Parties shall, with reasonable diligence, do all things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement. Each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.

(h) Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile or other electronic means and all the counterparts and facsimile or other electronic transmissions together constitute one and the same agreement.

– signature page(s) immediately follow(s) –

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IN WITNESS WHEREOF the Parties have duly executed this Agreement.

[INSERT LANDLORD NAME]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
BRITISH COLUMBIA LOTTERY CORPORATION
Per:
	Name:
	Title:
Per:
	Name:
	Title:
GATEWAY CASINOS & ENTERTAINMENT LIMITED
Per:
	Name:
	Title:
Per:
	Name:
	Title:
[INSERT TENANT NAME]
Per:
	Name:
	Title:
Per:
	Name:
	Title:

FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE

THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this “Amendment”) is made and entered into as of 9:30 a.m. (Vancouver time) this 29th day of January by and among GATEWAY CASINOS & ENTERTAINMENT LIMITED (“Vendor”), 7588674 CANADA INC. (“Vendor Nominee”), MRSL (BURNABY) HOLDINGS, ULC (“Burnaby Beneficial Assignee”), MRSL (LANGLEY HOLDINGS) ULC (“Langley Beneficial Assignee”), and MRSL (NEW WESTMINSTER) HOLDINGS ULC (“New Westminster Beneficial Assignee”, and, collectively with Burnaby Beneficial Assignee and Langley Beneficial Assignee, “Purchaser Assignees”) and MESIROW REALTY SALE-LEASEBACK, INC. (“Original Purchaser”).

A.        Vendor, Vendor Nominee and Original Purchaser are parties to that certain Agreement of Purchase and Sale dated as of December 15, 2017 (the “Agreement”). Original Purchaser assigned the Agreement to Assignees pursuant to a certain Assignment and Assumption of Agreement of Purchase and Sale dated as of December 22, 2017 (the “Assignment”).

B.        The parties have agreed to amend the Agreement as more particularly set forth herein.    

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.        Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

2.        Amendments. The Agreement is hereby amended as follows:

(a)        The definition of Closing Date is hereby deleted and replaced with the following: “Closing Date” means, subject to the provisions of this Agreement, February 23, 2018.”

(b)        Section 3.1(b) of the Agreement is hereby deleted and replaced with the following:

“Prior to 11:00 a.m. on February 1, 2018, the Purchaser shall deliver the amount of $1,000,000 (the “Second Deposit”) by wire transfer to the Title Insurer to be invested by the Title Insurer in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada). Prior to 11:00 a.m. on the third (3rd) Business Day following delivery of the Financing Waiver Notice, the Purchaser shall deliver the amount of $9,000,000 (the “Third Deposit”) by wire transfer to the Title Insurer to be invested by the Title Insurer in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada). The First Deposit, the Second Deposit and the Third Deposit, if paid, are collectively referred to as the “Deposit”.

(c) The second grammatical paragraph of Section 3.1(c) is hereby deleted and replaced with the following:

“If this Agreement is terminated other than as the result of a default by Purchaser or failure by the Purchaser to give the Vendor the Financing Waiver Notice prior to 5:00 p.m. on February 9, 2018 in accordance with Subsection 4.2(m), the Deposit, together with all interest earned thereon, shall, subject to Subsection 2.4(b), be thereupon returned to the Purchaser, without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity.”

(d) The following Section 4.2(m) is added to the Agreement:

“(m) on or prior to February 9, 2018, Purchaser shall have obtained a commitment for mortgage financing for the acquisition of the Subject Assets acceptable to Purchaser in its sole discretion (the “Acquisition Financing Commitment”). The Purchaser shall be deemed not to have received the Acquisition Financing Commitment unless it delivers to the Vendor on or before 5:00 p.m. on February 9, 2018 a written notice in the form attached hereto as Exhibit A attached hereto (the “Financing Waiver Notice”) stating that it irrevocably waives the condition contained in this Subsection 4.2(m). If the Purchaser fails to give the Vendor the Financing Waiver Notice prior to 5:00 p.m. on the February 9, 2018, then this Agreement shall automatically terminate at such time and, upon such termination, the Purchaser and the Vendor shall be released from all obligations under this Agreement (except for those obligations which are expressly stated to survive the termination of this Agreement) and the Deposit and all interest earned thereon shall be returned to the Purchaser, subject to Subsection 2.4(b). This provision shall survive the termination of this Agreement.”

(e) The following Section 4.4(c) is added to the Agreement:

“The Purchaser shall, commencing on January 30, 2018 and continuing through the Closing or earlier termination of this Agreement: (i) deliver daily, via an email to Vendor (or to such parties as Vendor may direct), a report setting out the status of the Acquisition Financing Commitment and details regarding the progress of satisfaction of the balance of the Purchaser’s Conditions; and (ii) promptly make available to the Vendor or to its Executive Chairman, by telephone, at the request of either and for the foregoing purpose, one or more senior officers or directors of the Original Purchaser, including, without limitation, Mr. Dominick Mondi.

3.        Waiver Notice.    This Amendment shall serve as Purchaser’s Waiver Notice pursuant to Section 2.5 of the Agreement and Vendor acknowledges and agrees that no separate Waiver Notice shall be required.

4.        Acknowledgments. The Purchaser and Vendor hereby agree to continue to negotiate in good faith any further allocation of the Purchase Price among the Subject Assets, the form of the Comfort Letter with Delta, the form of the Easement and, if required by Purchaser’s

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lenders, the form of the gaming law opinion to be delivered by Vendor. The Purchaser and the Vendor acknowledge that it continues to be a condition of Closing in favour of the Purchaser that the Purchaser shall receive one or more title policies in the aggregate amount of the Purchase Price, in the forms approved by the Purchaser. The Vendor agrees to continue to reasonably cooperate with the Purchaser in providing information that has been requested prior to the date hereof or that may be requested after the date hereof by the Purchaser or its lenders.

5.        Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. In order to expedite matters, electronic signatures may be used in place of original signatures on this Amendment.

6.        Full Force and Effect. The Agreement remains in full force and effect, as amended hereby.

[Signatures on following page.]

-3-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and time set forth above.

GATEWAY CASINOS & ENTERTAINMENT LIMITED
Per:
	Name:   Anthony Sano
	Title:     Chief Executive Officer
I have authority to bind the Corporation.
Per:
	Name:   Brad Bardua
	Title:     Chief Financial Officer
I have authority to bind the Corporation.
7588674 CANADA INC.
Per:
	Name:   Anthony Santo
	Title:     Director
I have authority to bind the Corporation.
MESIROW REALTY SALE-LEASEBACK, INC.
By:
Name:
Title:
MRSL (BURNABY) HOLDINGS, ULC
By:
Name:
Title:

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

GATEWAY CASINOS & ENTERTAINMENT LIMITED
Per:
	Name:
	Title:
	I have authority to bind the Corporation.
Per:
	Name:
	Title:
	I have authority to bind the Corporation.
7588674 CANADA INC.
Per:
	Name:
	Title:
I have authority to bind the Corporation.
MESIROW REALTY SALE-LEASEBACK, INC.
MRSL (BURNABY) HOLDINGS, ULC

Signature Page to First Amendment to Purchase and Sale

MRSL (LANGLEY HOLDINGS) ULC

MRSL (NEW WESTMINSTER) HOLDINGS ULC

Signature Page to First Amendment to Purchase and Sale

EXHIBIT A

Financing Waiver Notice

TO: Gateway Casinos & Entertainment Limited

RE: 4331 Dominion Street and 4320/4350 Dominion Street, Burnaby BC, 350 Gifford Street, New Westminster, BC and 3811 Boundary Road, Richmond, BC and as 20393 and 20389 Fraser Highway, Langley, BC

We refer to the Agreement of Purchase and Sale made between Gateway Casinos & Entertainment Limited and Mesirow Realty Sale-Leaseback, Inc. (the “Purchase Agreement”). Pursuant to Section 4.2(m) of the Purchase Agreement, we hereby irrevocably waive the Acquisition Financing Commitment (as defined in the Purchase Agreement) condition.

DATED as of the ● day of ●, 2017.

● [PURCHASER]
Per:
	Name:
	Title:
Per:
	Name:
	Title:
I/We have authority to bind the Corporation.

EX-10.5

Exhibit 10.5

October 16, 2013

VIA EMAIL & COURIER

PRIVATE & CONFIDENTIAL

Anthony Santo

1869 Alberni Street

Vancouver, BC

V6G 3H9

Dear Tony:

Re: Offer of Employment

We are pleased to offer you the position of Chief Executive Officer of Gateway Casinos & Entertainment Limited (the “Company”). We look forward to you joining our organization immediately upon execution of this Agreement. This offer is conditional upon: (i) approval for you to perform your duties under this Agreement from the Gaming Policy and Enforcement Branch in British Columbia, the Alberta Gaming and Liquor Commission in Alberta and applicable regulatory bodies in such other provinces and territories as Gateway does business from time to time; and (ii) authorization from Canadian Immigration authorities that you are lawfully able to work in Canada. The details of the offer are as follows:

1. TITLE

You will join the Company in the capacity of Chief Executive Officer (“CEO”), reporting to the Board of Directors (the “Board”). As CEO, you shall be appointed as an officer of the Company and as a director of the Board.

2. REMUNERATION

2.1 Your annual base salary will be USD$650,000 inclusive of vacation pay, less required statutory deductions, which shall be in full satisfaction of all services rendered to, or work performed by you for the Company. Your base salary shall be subject to deduction in accordance with Section 8.7 of this Agreement.

2.2 In addition to your base salary, you will be eligible to receive an annual bonus with a target of up to 100% of your base salary upon achievement of objectives that will be determined annually with input from you and the Board (the “Annual Bonus”). The final decision on the form of the Annual Bonus program, any amendments to the program from time to time, required objectives for the Annual Bonus payout and the quantum of the Annual Bonus payment (if any) will be at the sole discretion of the Board.

2.3 The fiscal year end of the Company is December 31. For the fiscal year 2013, you will be eligible to participate in the Annual Bonus on a pro-rata basis commencing from your actual Start Date.

Page  2  of 18

3. EQUITY PARTICIPATION

3.1 As an incentive for you to assist in creating value in the Company, subject to the terms and conditions in this Section 3, if a Liquidity Event (as defined below) occurs during the Equity Participation Term (as defined below), you will be entitled to receive consideration (the “Equity Participation”) equal to 2.5% of the consideration received by holders of the Company Shares (as defined below) that are subject to such Liquidity Event (the “Subject Shares”) on the following basis.

3.2 The Equity Participation will be calculated as follows:

X = (Y x Z) x 0.025

where:

X = the Equity Participation;

Y = the total number of Subject Shares; and

Z = the consideration received (in whatever form) per Subject Share pursuant to the Liquidity Event.

3.3 The Company shall pay the Equity Participation to you, less any required statutory deductions, promptly following the completion date of the Liquidity Event. Unless otherwise determined by the Board in its sole discretion, the Equity Participation will only be settled in shares or an equity-based instrument and will not be paid in cash. Should a Liquidity Event result in the holders of Subject Shares receiving consideration in a form other than cash, the Board, acting reasonably, may establish the value of such consideration for purposes of determining the Equity Participation, if the Board elects to see the Equity Participation paid in cash, rather than by way of such consideration.

3.4 For the purposes of this Agreement, “Subject Shares” shall mean the Company Shares that are subject to a Liquidity Event. For example:

(a) if the Company Shares sold by an existing shareholder of the Company pursuant to a Going Public Transaction represent 30% of the Company’s shares qualified for sale (and sold) pursuant to the prospectus filed in connection with the Going Public Transaction, (i) the Equity Participation shall be equal to 2.5% of the Company Shares so sold, and (ii) unless the Board determines otherwise as set out in Section 3,3, the Equity Participation shall be satisfied through the delivery to you of the appropriate number of additional shares of the Company; or

(b) if the Subject Shares being acquired by a Person(s) that is not a Related Person(s) pursuant to a Liquidity Event represent 100% of the then outstanding Company Shares, the Equity Participation will be equal to 2.5% of the consideration received for all of those Company Shares.

Page  3  of 18

3.5 If, after the date hereof, the Company adopts an option, restricted trust unit, deferred trust unit, performance trust unit or similar equity or security-based compensation plan, the Company may substitute the entitlement to shares of the Company pursuant to the Equity Participation under this Section 3 with a grant of other securities of the Company pursuant to such plan(s); provided, however, that you receive reasonably equivalent economic but not structurally superior entitlement upon a Liquidity Event as those contemplated herein, as determined by the Board acting reasonably.

3.6 In this Agreement, the following terms shall have the following meanings:

(a) “Company Shares” means, collectively, (i) the 35,791,471 common shares of the Company outstanding as of the date hereof, (ii) the common shares of the Company to be issued on or about March 31, 2013 and October 31, 2013 (or such other dates as the Company may determine) in connection with the investment of up to $35 million by existing shareholders of the Company, and (iii) such other shares issued from treasury by the Company that the Board determines, acting reasonably, should be considered to be “Company Shares” for the purposes of this Agreement.

(b) “Dividend Payment” means the declaration and payment of a dividend to the holders of the Company Shares, other than the declaration and payment of a periodic dividend pursuant to a dividend policy adopted by the Company, it being understood that the Board will also review its short term incentive program in connection with its adoption of a dividend policy in order to incentivize and align the interests of the executives with the shareholders.

(c) “Equity Participation Term” means the period commencing on the Start Date and ending on:

(i) the Termination Date in respect of the termination of your employment for any reason other than termination by the Company without Just Cause (as defined below); and

(ii) six months following the Termination Date in respect of the termination of your employment by the Company without Just Cause.

(d) “Going Public Transaction” means the completion of a secondary public offering of Subject Shares by the Company’s shareholders following the issuance of a receipt by the applicable securities regulator for a final prospectus in connection with such secondary public offering; provided, however, that upon completion of the secondary public offering, the shares of the Company (including the Subject Shares) are posted for trading on a Recognized Exchange. For greater certainty, a Going Public Transaction shall not include a treasury issuance of the Company’s shares.

Page  4  of 18

(e) “Liquidity Event” means the occurrence of any one or more of the following events or circumstances: (i) a Going Public Transaction; (ii) a Dividend Payment; and (iii) (A) the acquisition of all of the issued and outstanding common shares of the Company by a Person (other than a Related Party) pursuant to a take-over, amalgamation, plan of arrangement or other business combination, or (B) the sale of all or substantially all of the assets of the Company to a Person (other than a Related Party), that results in the holders of Company Shares receiving for their Company Shares, consideration consisting of entirely or a combination of (1) cash or (2) securities of the acquiring Person (or an affiliate of such Person); provided, however, that, unless determined otherwise by the Board in its sole discretion, a “Liquidity Event” shall not include a reverse take-over or similar transaction (regardless of whether such transaction is implemented pursuant to an arrangement, amalgamation or other structure), it being agreed by you and the Company that a reverse take-over is not generally the type of transaction contemplated to give rise to the realization of new value for the Company Shares as contemplated herein, and should not generally result in Equity Participation rights.

(f) “Recognized Exchange” means the Toronto Stock Exchange, TSX Venture Exchange, London Stock Exchange, New York Stock Exchange, NYSE Amex Equities and the NASDAQ stock market or any successors thereto, and any other stock exchange that the Company and its financial advisor may agree, In writing, should constitute a recognized exchange for the purposes of this Agreement;

(g) “Related Party” means:

(i) any person who is a holder of Company Shares as of the date of this Agreement and any shareholder, officer, director, partner or employee of such person;

(ii) any employee or group of employees of the Company;

(iii) a trustee or other fiduciary holding Company Shares under an employee benefit plan of the Company; or

(iv) a corporation owned directly or indirectly by the holders of Company Shares in substantially the same proportion as their ownership of Company Shares;

(h) “Start Date” means the date you commence to actively perform services for the Company under this Agreement (without regard to any prior consulting agreement between the parties); and

(i) “Termination Date” means the date on which your employment is terminated and you cease to actively perform services for the Company and, for greater certainty, shall not include any reasonable notice period

Page  5  of 18

following the termination of your employment, nor any period in respect of which you are eligible for or in receipt of Severance Pay (as defined below).

3.7 All of your entitlements and rights to Equity Participation shall terminate at the end of the Equity Participation Term.

4. DEDUCTIONS FROM EARNINGS

4.1 To the extent permitted by applicable law, you hereby authorize the Company to set-off and deduct any amounts owed by you to the Company, from any amounts that are owing from the Company to you, at any time.

5. BENEFITS AND VACATION

5.1 You are entitled to participate in the Company’s benefit plans for senior executives of the Company, in accordance to the governing terms of those plans, including the requirement to pay deductibles prior to receiving benefits and to comply with any applicable qualification period. The Company reserves the right to amend, cost share or terminate the benefits or benefit plans from time to time in its sole discretion where such amendment, cost sharing or termination applies generally to all participants in the plan.

5.2 You shall be entitled to four weeks annual vacation, in addition to statutory holidays. Vacation entitlement cannot be banked or carried over from year to year without the Board’s permission. In the event vacation entitlement is banked or carried over, the Board may, at its sole discretion, require you take the banked vacation within a specified time or have it paid out. Annual vacation shall be taken at such times as agreed between you and the Board having regard to the business needs of the Company.

5.3 You shall be provided with a Company car or, at the sole discretion of the Company, a car allowance at an approximate cost to the Company of CDN$1,000 per month.

6. EMPLOYEE COVENANTS

6.1 During your employment you agree to perform your duties in a dedicated and professional manner. You acknowledge and agree that you are employed in a fiduciary capacity and that you will act in the best interests of the Company, without any conflict of interest whatsoever, consistently with your duty of loyalty and good faith to the Company and as directed by the Board. You agree to observe all instructions, rules, policies and practices now or hereafter established by the Company for the conduct of its business.

6.2 You warrant and represent to the Company that there are no restraints upon you which will prohibit you from devoting the required time and attention to your employment duties for the Company, or from performing your duties for the Company in a reasonable and satisfactory manner.

Page  6  of 18

6.3 You agree that you will not bring with you, nor use in the course of your employment any confidential or proprietary information belonging to any third party.

6.4 You agree that you will relocate to Vancouver B.C. within 2 months of your Start Date.

6.5 You agree that regular travel is required in this position.

7. CONFIDENTIALITY OBLIGATIONS

7.1 You hereby acknowledge that in the performance of your duties hereunder, you will be granted access by the Company to certain information which is confidential and proprietary to the Company and its affiliated companies (the “Confidential Information”). The Confidential Information includes information concerning the business of the Company and its affiliates and will specifically include, without limitation, information concerning the Company’s and its affiliates’ strategic plans, financing budgets and results of operations, trade secrets, data, customer lists, Patron (defined below) list(s), Patron preferences, marketing and business development initiatives, “favoured Patron” identification, and other material relating to the business affairs of the Company and its affiliates. You will also be entrusted with confidential and proprietary information relating to the organization, structure, operations, technical projects, technical systems, price margins and production costs of the Company and its affiliates, as well as other work product developed by or for the Company and its affiliates, and such other information shall also form part of the Confidential Information referred to herein. Notwithstanding anything to the contrary contained herein, “Confidential Information” shall not include:

(a) any information that has entered or enters the public domain through lawful means; and

(b) information which you are required to disclose pursuant to applicable law, policies or due processes & applicable regulatory bodies or legal or regulatory proceedings.

7.2 You agree that you shall not directly or indirectly: (i) use for your own benefit or for the benefit of others; (ii) disseminate, publish or disclose; or (iii) authorize or permit the use, dissemination or disclosure by any person, firm or entity, of any Confidential Information without the express written consent of the Board, at any time during your employment with the Company or following the termination of your employment for any reason, for so long as the Confidential Information retains its confidential nature.

8. NON-COMPETE OBLIGATIONS

8.1 You agree that except as provided for in Sections 8.4, 8.5 and 8.6, your employment by us is fulltime and exclusive. You further agree to perform your duties in a competent, trustworthy and businesslike manner. During your

Page  7  of 18

employment with the Company, you will not render any services of any kind (whether or not for compensation) to any person or entity other than the Company, and you will not engage in any other business activity (whether or not for compensation) that is similar to or conflicts with your duties under this agreement, without the prior written approval of the Board, other than as provided for in Sections 8.4, 8.5 and 8.6.

8.2 You further agree that other than as provided in Sections 8.4, 8.5 and 8.6, for a period of 12 months following the Termination Date, regardless of the reason for the termination of your employment, in the Provinces of Alberta, British Columbia and Ontario, you will not, directly or indirectly, accept employment with, assist or advise, or in any way become involved in directing, managing or consulting to: (i) another casino; (ii) any community gaming centre; or (iii) any other gaming establishment, which competes with the Company in Alberta, British Columbia or Ontario.

8.3 You also agree that if the Company operates in any other province besides those referred to in Section 8.2 on the Termination Date, and other than as provided for in Sections 8.4, 8.5 and 8.6, for a period of 12 months following the Termination Date, regardless of the reason for the termination of your employment, in that other province in which the Company is then operating, you will not, directly or indirectly, accept employment with, assist or advise, or in any way become involved in directing or managing or consulting to: (i) another casino; (ii) any community gaming centre; or (iii) any other gaming establishment, which competes with the Company in that province.

8.4 You hereby represent to the Company that as at the date of this Agreement, you own or are a partner in, directly or indirectly, wholly or together with your wife, the companies listed in Schedule “A”. You and the Company hereby agree that so long as the size, scope and business of the companies listed in Schedule “A” remains the same as described in Schedule “A”, you may continue to hold your existing interest, and continue your existing activities, with such companies during your employment with the Company, on the condition that such interest does not limit or interfere with your ability to perform your employment duties under this Agreement, on a full time basis. You further agree that you will not increase your role in, or the amount of time you devote to any of the companies listed in Schedule “A” without the prior consent of the Company, and that you will notify Gateway of any increase in your ownership interest in such companies.

8.5 You further represent to the Company that as at the date of this Agreement, you also have a 100% ownership interest in Santo Gaming and Consulting LLC (“Santo Gaming”), and that as at the date of this Agreement, Santo Gaming is involved in the business activities listed in Schedule “B”, which shall be wound-up as provided in Schedule “B”.

8.6 You further represent to the Company that as at the date of this Agreement, you are also a member of or have been asked to join the Board of Director identified in Schedule “C”, and that your membership on such Board shall be dealt with as provided in Schedule “C”.

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8.7 Pursuant to the contractual relationship between you and/or Santo Gaming and PIayIv, The Plaza and Las Vegas Club referred to in Schedule “B”, you receive compensation and agree that while you continue to receive such compensation, the Relocation Costs payable to you by the Company shall be reduced by USD$10,000 per month (pro-rated for partial months during which you receive such compensation), being a portion of the compensation paid to you and/or Santo Gaming by PlayIv, The Plaza and/or Las Vegas Club. In the event that the Relocation Costs are reduced to zero pursuant to this Section 8.7, the base salary paid to you shall be reduced by $10,000 per month (pro-rated for partial months) for the period during which you continue to receive compensation from PIayIv, The Plaza and Las Vegas Club.

8.8 You hereby represent that the business interests and relationships referred in Sections 8.4, 8.5 and 8.6 represent all of the business interests, activities and relationships you are involved in, directly or indirectly, as at the date of this Agreement, with the exception of your relationship with the Company under this Agreement and any passive investments in public companies or publicly traded financial instruments listed on a recognized stock exchange which do not involve a management role for you, and where such public companies or financial instruments are not involved in or related to the gaming industry (with the exception of a passive investment of approximately US$200,000 in Las Vegas Sands which you have disclosed to us). You also agree that you shall not, without the prior consent of the Company, directly or indirectly acquire an ownership interest in, or enter into a business relationship with any public or private company or entity involved in the gaming industry at any time during your employment with the Company. Your current investment in Las Vegas Sands will be sold within 90 days from commencement of the consulting agreement between you and the Company that preceded this Agreement. You further agree that you shall notify the Company of any interest you acquire, directly or indirectly, in any private company during your employment with the Company, and that such interest shall not involve any management or operational role for you.

8.8 You further represent that none of the business interests or activities referred to in Sections 8.4, 8.5 and 8.6, and no business interest or activity that you acquire or become involved in during your employment with the Company shall limit or interfere with your ability to perform your employment duties for the Company under this Agreement on a full time basis, and that such other business interests and activities shall not cause any conflict of interest with your duties under this Agreement.

9. NON-SOLICITATION OBLIGATIONS

9.1 You agree that during your employment with the Company and following the termination of your employment, regardless of the reason for the termination, for a period of 12 months immediately following the Termination Date, you shall not either indirectly or directly, by any means, in any capacity approach, solicit or contact, or attempt to direct away from the Company:

Page  9  of 18

(a) any Patron who has attended at any of the casinos operated by the Company in the 12 months immediately preceding the Termination Date;

(b) any Patron who, in the 6 months immediately preceding the Termination Date, the Company has actively attempted to recruit to attend at any Company casino and where the Company has not ceased its recruitment efforts as at the Termination Date; or

(c) in any manner assist any person in any of the foregoing activities.

For purposes of this Agreement, “Patron” shall mean any corporate entity which, or any individual who, is identified by the Company in its records as a “status level” or “high action” player as such terms are generally understood in the gaming industry, and who is the recipient of a marketing or promotional endeavor by the Company. If you have any questions concerning the identity of any Parton who may be subject to this restriction, you are required to contact the Company to obtain clarification prior to any solicitation of the Patron.

9.2 You agree that during your employment with the Company and following the termination of your employment, regardless of the reason for the termination, for a period of 12 months immediately following the Termination Date, you shall not directly or indirectly recruit, retain, employ, train or solicit any person employed or engaged by the Company to provide services for the benefit of yourself or any other person who engages in: (i) a business similar to the business of the Company: (ii) any community gaming centre; or (iii) any other gaming establishment, or in any manner assist any person in any of the foregoing activities. You further agree that for the same period, you will not encourage any employee or contractor of the Company to leave their employment or retainer with the Company.

10. REASONABLENESS OF RESTRICTIONS

10.1 You acknowledge and agree that the business of gaming is extremely competitive and knowledge-based, and that, as the most senior officer and employee in the Company you will have access to all the strategic plans and business development initiatives of the Company and its affiliates, and to other Confidential Information which would give you, or any third party for whom you work or to whom you provide any services, an unfair competitive advantage should you use that information (whether deliberately or inadvertently) for any purpose other than in the best interests of the Company and its affiliates. You further agree that the Company and/or its affiliates would suffer irreparable harm in the event that any Confidential Information you acquire in relation to the business of the Company and its affiliates were disclosed to another entity or used for a competitive purpose following the termination of your employment for any reason, including to solicit the Company’s Patrons or employees regardless where you may next work in North America. Therefore, you hereby confirm that the obligations described in Sections 7, 8 and 9 and the geographic restrictions set out therein (together, the “Restrictions”), are fair and reasonable, and that they are necessary to protect the Company’s business and the relationships it

Page  10  of 18

has formed with Patrons and employees. You agree that by requiring you to agree to these Restrictions as a term of employment, the Company is not trying to prevent you from earning a livelihood during the applicable restrictive period, but rather the Company is attempting to protect its business in the territory and the markets identified, for a reasonable period regardless of where you next work. You also agree that in the event of any breach or threatened breach of any Restrictions, the Company and/or its affiliates will suffer irreparable harm and that the Company shall be entitled to obtain interim or permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which the Company may be entitled at law, without having to prove actual damages.

10.2 Each of Sections 7, 8, and 9 are and shall be construed as constituting obligations which are separate and independent from each other, and from the other obligations of this Agreement.

11. IMMIGRATION AND LICENSING OBLIGATIONS AND SUPPORT

11.1 The Company will provide reasonable and appropriate support for you to obtain and maintain a work permit or other applicable immigration authorization to work in Canada, including payment of legal and other fees reasonably incurred. Subject to the foregoing, it is a condition of your employment with the Company, and your continuing employment, that you obtain and maintain all necessary immigration approvals to lawfully work in Canada. Failure to comply with this condition shall be considered Just Cause for termination of employment by the Company.

11.2 The Company will provide reasonable and appropriate support to assist you to obtain and maintain any license, qualification, clearance or other similar approval required by the applicable regulatory authorities in order to carry out your duties for the Company, including payment of legal and other fees reasonably incurred. It is a condition of your employment with the Company, and your continuing employment, that you obtain and maintain all licensing requirements necessary in each jurisdiction in which the Company operates. Failure to comply with this condition shall be considered Just Cause for termination of employment by the Company.

12. RELOCATION

12.1 The Company will provide to you the following in order to assist you to relocate to Vancouver:

(a) reimbursement of reasonable real estate fees and closing costs: (i) if you sell your house in Henderson, Nevada to move your family to Vancouver; and (ii) if there are any such costs incurred by you to purchase or lease property in Vancouver;

(b) two house hunting trips to Vancouver for you and your spouse;

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(c) interim lodging for up to 3 months; and

(d) shipment of household goods,

to a maximum of USD$85,000 excluding the reimbursement of fees identified in Section 12.1(a) above.

12.2 The total amount paid by the Company to assist you to relocate to Vancouver as identified in Sections 12.1(a) to (d) above is the “Relocation Costs”.

12.3 If you voluntarily resign your employment with the Company, or are terminated for Just Cause, during the nine (9) month period immediately following the Start Date, you agree to repay to the Company the full amount of the Relocation Costs within 30 days of the Termination Date. By signing below, to the extent permitted by law, you authorize the Company to set-off the Relocation Costs from any amounts which may be owed to you by the Company at the Termination Date, such as salary or vacation pay.

12.4 Payment of the Relocation Costs shall be subject to deduction in accordance with Section 8.7 of this Agreement.

13. OTHER BENEFITS

13.1 In addition to the amounts described above, the Company will reimburse you for all reasonable business expenses actually and properly incurred by you in the performance of your duties, in accordance with the Company’s policies and practices.

14. TERMINATION OF EMPLOYMENT

14.1 This Agreement and your employment hereunder shall immediately be frustrated upon your death or Total Disability, subject to any restrictions imposed upon the Company under applicable law. For purposes of this Agreement, “Total Disability” means, subject to any restrictions imposed by applicable law, your disability for a continuous period of 120 days, or any 180 days in any 360-day period, if such disability prevents you from substantially performing your duties for the Company. In the event that your employment hereunder is frustrated on account of your death or Total Disability, the Company shall pay to your estate or to you, as the case may be, any accrued but unpaid base salary and Annual Bonus, unpaid benefits, accrued vacation and outstanding reimbursement claims owing to the date of death or Total Disability, as the case may be. No further amounts shall be payable in respect of severance, pay in lieu of notice or other compensation for the termination of your employment in these circumstances, except as required by applicable law.

14.2 The Company shall have the right to immediately terminate, at any time, this Agreement and your employment hereunder for Just Cause without notice or compensation in lieu of notice. If your employment is terminated for Just Cause, the Company shall pay your base salary and benefits to the Termination Date

Page  12  of 18

only and shall have no responsibility or liability for the payment of any severance, pay in lieu of notice or other compensation or benefits for the termination of employment, including without limitation for any Annual Bonus in the year of termination. For the purpose of this Agreement, “Just Cause” means any act or omission by you that would constitute just cause for termination of employment without compensation under the common law, including without limitation any willful or gross misconduct by you in relation to the performance of your duties under this Agreement, and any gross neglect by you of your duties under this Agreement.

14.3 Should your employment be terminated without Just Cause within 24 months of the Start Date, so long as you comply with the Restrictions following the Termination Date, on the basis described below, you will be paid an amount equal to eighteen months (then) base salary and Annual Bonus, less required statutory deductions (together, the “Severance Pay”) in lieu of notice. Should your employment be terminated without Just Cause on and after the second anniversary of the Start Date, so long as you comply with the Restrictions following the Termination Date, in addition to the payment of 18 months Severance Pay, you will receive a further payment equal to one month of Severance Pay for each additional completed year of service following the second anniversary of your Start Date, less required statutory deductions, to a maximum aggregate of 24 months’ Severance Pay. Payment of Severance Pay shall be subject to the following further conditions:

(a) the payment in lieu of Annual Bonus for the Severance Pay period following the Termination Date shall be calculated at 80% of the target Annual Bonus amount set for the year in which the termination occurs;

(b) the payment in lieu of the Annual Bonus for the year in which the termination occurs shall be calculated at 80% of target Annual Bonus amount set for that year, for the period actually worked in that year prorated to the Termination Date; and

(c) the Severance Pay described in this Section shall be paid as “salary continuation” for the first 12 months following the Termination Date, on the Company’s regular pay days and in equal regular periodic payments equivalent to 12 months then base salary and Annual Bonus. These payments are not subject to mitigation, so long as you do not breach Section 8 or the other Restrictions. At the end of the 12 month period following the Termination Date, so long as you have not breached any of the Restrictions as at that date, the Company will pay to you, as a lump sum, the remaining amount owed as Severance Pay. This payment is not subject to mitigation. However, notwithstanding the foregoing, if you breach Section 8 or any of the other Restrictions, the Severance Pay payments shall terminate as at the date of such breach, subject only to any minimum statutory amounts to which you are entitled under applicable employment standards legislation, and you shall not be entitled to receive any further payments in respect of severance, pay in lieu of notice or other compensation for the termination of your employment.

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14.4 Additionally, while you are in receipt of the equal, regular periodic payments described in Section 14.3 for the first 12 months following the Termination Date, the Company will continue to make its regular employer contributions to the benefit plans in which you participated immediately prior to the Termination Date (excluding disability coverage which terminates on the day you cease to provide services to the Company) until the earlier of: a) the expiry of the 12 month period following the Termination Date; b) the date upon which you commence alternative employment and are then covered by the next employer’s benefit plans; or c) the date the Severance Payments terminate, if you breach the Restrictions. You agree to notify the Company when you commence alternative employment if it occurs in the initial 12 month period following the Termination Date.

14.5 You agree that upon payment to you of the applicable amounts specified in this Section 14 following the termination of your employment, and upon continuing the benefits plans for the period specified, the Company shall have no further obligation to you, including pursuant to Section 3 of this Agreement, and you shall have no further claim to any payment whatsoever from the Company or any of its officers, directors or employees (the “Releasees”) including, without limitation, any claims for notice, pay in lieu of notice, statutory termination pay, severance pay or benefit entitlements whether arising at common law, by contract or by statute. You fully release the Releasees from any and all causes of action whatsoever based on or resulting from your termination of employment, and agree to sign a full and final general release agreement on terms acceptable to the Company, as a pre-condition to receiving any payments or benefit continuation under Sections 14.3 and 14.4. You agree that these terms are fair and reasonable, and that you have the opportunity to consult with Independent legal counsel to assist you to understand the implications of all the terms of this Agreement before signing the Agreement.

14.6 You shall have the right to terminate this Agreement and your employment hereunder upon 90 days prior written notice to the Company. The Company may waive the requirements of such notice, in which case your resignation shall be effective, and this Agreement and your employment hereunder shall be terminated, immediately, and the Company shall have no responsibility for the payment of any severance, pay in lieu of notice or other compensation or benefits for the termination of your employment, (including without limitation any Annual Bonus payment in the year in which you resign), or any benefit continuation for any period subsequent to such termination.

15. GENERAL

15.1 Your obligations regarding the Restrictions described in Sections 7, 8 and 9, and the Severance Pay obligations of the Company described in Section 14 of this Agreement, and any other term necessary to give efficacy thereto, shall survive and continue in full force and effect following the termination of this Agreement and your employment hereunder for any reason.

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15.2 The Company protects the personal information collected from its employees and will continue to do so in compliance with applicable privacy legislation. Personal information is information that identifies an individual but does not include business address, email address, and telephone number. Any personal information you have provided during the recruitment process or will provide pursuant to this Agreement will be used by the Company to create and administer the employment relationship with you. By providing personal information during the recruitment process and while employed, you agree to its collection, use and if necessary, disclosure by the Company of such information for these purposes, and in order to permit the Company to comply with any legal or regulatory requirements identified by any governmental authority.

15.3 All payments to you pursuant to this Agreement shall be subject to applicable withholdings and deductions required by law.

15.4 If any provision or any part of any provision of this Agreement is determined to be void or unenforceable, it will be deemed not to affect or impair the validity of any other provision in this Agreement and each such provision and part thereof is deemed to be separate and distinct and, to the fullest extent permitted by law, such void or unenforceable provision or part of the provision will be severed and will be deemed to be of no further force and effect. Without limiting the foregoing, it is expressly contemplated and agreed by the parties that each subsection of Sections 7, 8 and 9 are separate, distinct and severable, and that in the event Sections 7, 8 or 9, or any part thereof, are found to be unenforceable, such unenforceable provision shall be severed from the rest of that Section and/or from this Agreement, and the balance of the Section and this Agreement shall be enforceable to the broadest and fullest extent permitted by law.

15.5 This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein, and the parties hereby attorn to the exclusive jurisdiction of the British Columbia Courts.

15.6 You acknowledge and agree that this Agreement and any attachments contain the entire agreement between you and the Company concerning the subject matter hereof and supercede all prior representations, agreements, negotiations, discussions and undertakings, written or oral, between you and the Company, including without limitation any prior consulting agreement between you and the Company. There are no other representations (including negligent misrepresentations) on which you are relying that are not expressly included in this Agreement.

15.7 This Agreement may only be amended, modified or supplemented by written agreement signed by both you and the Company However, as the business needs of the Company may change, the Board in its sole discretion, after consultation with you, may amend your title, duties and responsibilities (but not your then remuneration) from time to time in accordance with the Company’s business interests without requiring a written amendment to this Agreement by providing you with prior notice equal to the minimum amount of notice required

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for termination as specified in the Employment Standards Act of British Columbia, which will range from 1 to 8 weeks depending on your length of service with the Company.

Tony, it is indeed a pleasure to extend this offer to you on behalf of the Company. We wish you every success in your new position. Please indicate your acceptance of this offer by signing a copy of this letter and returning it to me within three (3) business days of today’s date. Please contact me if you have any questions regarding the offer.

Yours truly,

On behalf of

GATEWAY CASINOS & ENTERTAINMENT LIMITED

Gabriel de Alba

Chairman of the Board

I have read, understand and hereby accept the terms of employment as stated above. I acknowledge that I have been provided with an adequate opportunity to obtain independent legal advice before signing this Agreement.

	10/16/13
Anthony F. Santo	Date

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SCHEDULE “A”

1. Viva Media, an internet provider for casinos, hotels and timeshare resorts. You have a 66% ownership interest in Viva Media and are not involved in the day to day management or operations of the business.

2. Dunkin Donuts Franchisee, with 6 stores in Las Vegas and in the process of developing a 7^th store. You presently own 50% of the business but have two operating partners who can earn up to 20% of your interest through performance, thus reducing your interest to 30%. You do not participate in the management or operation of any of the franchises.

3. Williams General Contractor. You own 40% of this company and are not involved in the day to day management or operations of the business.

4. Close Quarters Combat. This is a company that has developed a target system used by the US military. You own 33.3% of this company and are not involved in the day to day management or operations of the business.

5. Zephyrs Partners. This is a call center for hotels and insurance companies. You own 25% of the company and are the Chairman of the Board. Zephyrs Partners is a private company and Board meetings are quarterly or as called by the Board members. Other than your duties as Chairman of the Board you are not involved in the day to day management or operations of the business.

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SCHEDULE “B”

1. You are the licensee of Playlv, which is the lease holder for the operations of The Plaza and Las Vegas Club located in Las Vegas. You are not responsible for the day to day management or operations of Playlv, The Plaza or Las Vegas Club, and have a General Manager and V.P. of Casino Operations that handle all day to day management and operations. You have given 12 months notice of termination of the relationship between you and/or Santo Gaming and Playlv, The Plaza and Las Vegas Club in August 2013 (following your receipt of a Labour Market Opinion from Employment and Social Development Canada), which termination shall be effective August 31, 2014. You will not increase your interest or role in Playlv, The Plaza or Las Vegas Club during such notice period.

2. You and/or Santo Gaming had a contractual relationship with Meruelo Group, which owns the Grand Sierra Resort in Reno and has executed a Purchase and Sale Agreement for the Trump Plaza in Atlantic City. You and/or Santo Gaming have given notice of termination of the contractual relationship with Meruelo Group in March 2013, and the contractual relationship was terminated in April 2013.

3. Santo Gaming was submitted as the operator for Northern Gaming Group Ltd. in bundle three of the RFPQ process. As this is an opportunity where the Company has also submitted a bid, you and Santo Gaming have terminated any contractual relationship with Northern Gaming Group Ltd.

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SCHEDULE “C”

I. You are currently on the board of Las Vegas Monorail (“Monorail”), which meets every other month. You normally participate in Board meetings by phone and the meetings last approximately 90 minutes. You have advised Monorail of your intention to resign from the board, which resignation shall be effective following the approval of the Monorail’s annual budget, and in any event no later than November 30, 2013.

EX-10.7

Exhibit 10.7

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 29 day of September, 2016

BETWEEN:

Brad Bardua an executive with a residential address at 1145 Linnae Avenue, North Vancouver, BC

(the “Employee”)

AND:

GATEWAY CASINOS AND ENTERTAINMENT LIMITED, a company incorporated under the laws of the Province of British Columbia and continued under the laws of Canada, with a head office at 4331 Dominion Street, Burnaby, B.C., V5G 1C7

(the “Employer”)

WHEREAS:

A. The Employer is engaged in the business of operating and managing gaming facilities in British Columbia and Alberta (the “Business”);

B. The Employee is an executive with experience as a ‘Senior Finance Executive’ and wishes to provide his services to the Employer;

C. The Employer and Employee (together the “Parties”) wish to enter into an employment agreement (the “Agreement”) upon the terms and conditions set forth herein.

NOW THEREFORE in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:

1. Employment

This Agreement is in effect December 1, 2016 or the date the Employee accepts the terms and conditions set out in this Agreement (the “Effective Date”).

2. Duties and Responsibilities

(a) The Employee will serve the Employer diligently and faithfully in the performance of his duties and responsibilities as Chief Financial Officer (CFO). The Employee’s duties and responsibilities will include such duties and responsibilities as the Employer may reasonably prescribe from time to time within the scope of the Employee’s capacity as an executive.

September 29, 2016

(b) The Employee will carry out his duties and responsibilities in a good and faithful manner, using his best efforts to advance the interests of the Employer. The Employee will at all times and in all respects conform to and comply with the reasonable and lawful directions given by the Employer’s board of directors (the “Board”) and the Employer’s representatives from time to time.

(c) During employment with the Employer, the Employee will, unless prevented by ill health, devote the whole of the Employee’s normal working time and attention to the businesses and affairs of the Employer and its related entities, and the Employee will promote, develop and extend the businesses and affairs of the Employer to the best of the Employee’s ability.

(d) The Employer and the Employee will mutually establish annual key performance objectives (“KPOs”).

(e) The Employee will comply with the Employer’s Policies and Procedures, including the Code of Conduct, as introduced, determined or amended from time to time by the Employer. The Employee acknowledges that some of the Employer’s Policies and Procedures provide that a failure to comply may result in disciplinary or other action being taken by the Employer, and agrees to familiarise himself with all Policies and Procedures, to ensure compliance therewith.

3. Compensation

(a) The Employer will provide to the Employee a gross annual base salary in the amount of CAD$350,000 less statutory and other payroll withholdings and deductions, payable in biweekly instalments in arrears (the “Base Salary”). As part of management the Employee is expected to work whatever hours are necessary to fulfill his duties and responsibilities. The Employee’s Base Salary has been established with this in mind, therefore no additional overtime wages will be paid and no time off in lieu will be granted.

(b) The Employee’s compensation will be reviewed annually by the CEO and/or a committee of the Board, which may result, in the sole discretion of the Board, in an increase of the Base Salary. This review will take into consideration the Employee’s individual performance against the agreed KPOs, the Employer’s overall performance for the year and other factors the CEO and/or a committee of the Board considers appropriate in its sole discretion.

(c) The Employee will also be eligible to participate in the Employer’s annual Short Term Incentive Plan (the “STIP”). Under the terms of the current STIP, as in effect from time to time, the Employee may be awarded an incentive payment after the financial year-end, which is no greater than (50%) of his base salary based on the Employer’s financial performance, and the Employee’s performance and achievement of his Key Performance Objectives (“KPOs”) for that financial year. Staff members hired or promoted during the eligibility period will be subject to a prorated payment equal to the number of completed months of active employment in a STIP entitled position. The STIP, its terms and conditions, and

September 29, 2016 2

any payments thereunder are subject to cancellation, variation and approval each year at the sole discretion of the Board, effective immediately and without notice. STIP payments and any other form of Bonus payments do not form part of the Employee’s compensation under Section 4 of this Agreement. STIP payments and any other form of Bonus payments are earned by the Employee upon payment by the Employer, and are conditional upon a continuing employment relationship between the Employer and the Employee except as specified in Section 4. No bonuses will be earned by or payable to the Employee during a resignation period or a notice period except as specified in Section 4 of this agreement.

(d) The Employee is eligible to participate in the Employer’s equity program which is detailed in Schedule A enclosed with this letter.

(e) The Employer will provide the Employee with a standard package of benefits made available to the Employer’s executive employees. The benefit wait period will be waived so the Employee will be eligible upon enrolment. All benefits are subject to the terms of the carrier’s policy from time to time in effect. The terms and conditions or application of the benefits may be changed from time to time at the carrier’s or the Employer’s discretion. The obligation and liability of the Employer regarding benefits are limited to the payment of its portion of the premiums only. Any disputes about eligibility for benefits or related issues are matters between the Employee and the carrier under its policy.

(f) Enclosed is the Group Benefits Plan Authorization Form which will authorize the Employer to deduct from the Employee’s pay, the Long Term Disability premiums to be remitted to the Employer’s Group Benefits carrier.

(g) The Employer will promptly reimburse the Employee for the reasonable travelling, entertainment, telephone and other expenses actually, properly and reasonably incurred by the Employee in connection with his employment. Such payment of or reimbursement for expenses is subject to the Employee keeping proper accounts and furnishing to the Employer within 30 days after the date the expenses are incurred, all applicable statements, vouchers and other evidence of expense in such form as requested by the Employer.

(h) The Employee’s vacation entitlement is four (4) weeks annual vacation, earned pro rata in accordance with the Employer’s policies and practices and subject to business and operational needs of the Employer. Vacation pay is based on 8% of total wages annually.

(i) The Employee’s vacation time will accrue incrementally over time. As vacation time is used, his vacation accrual will be adjusted accordingly. The Employee is responsible for ensuring that his unused vacation time/pay accrued does not exceed his yearly accrual allowance at any point in time. Gateway reserves the right at its sole discretion, to require an employee to take vacation time that is in excess their accrual allowance within a specific time period. Upon cessation of employment the Employee’s vacation taken will be reconciled against the vacation pay accrued and the Employee’s acceptance of this offer is his consent to the appropriate adjustments being made to his pay.

September 29, 2016 3

(j) The Employee will be provided with a cell phone and associated costs will be paid by the Employer. Reasonable personal use of the cell phone is permitted.

4. Termination

(a) The Employee may resign as an employee of the Employer at any time during the term by giving to the Employer three (3) months’ prior written notice of the effective date of such resignation (the “Resignation Period”). On giving of any such notice, or at any time during the Resignation Period, the Employer will have the right to immediately accelerate the Employee’s effective resignation date by payment to the Employee of the pro rata Base Salary due to the Employee for the balance of the Resignation Period. The Employer may require, for all or part of the Resignation Period, that the Employee: (i) not attend work, (ii) perform other duties, (iii) or take up another position or role. In the event the Employer elects to accelerate the Employee’s resignation date, the Employee will not be entitled to continuation of any benefits past the accelerated resignation date.

(b) The Employer may terminate the Employee’s employment at any time, without cause by paying the Employee a lump sum payment equal to the Employee’s then Annual Base Salary, less statutory deductions. Upon termination of employment, all of the Employee’s benefits and perquisites will immediately terminate, except the Employee’s provincial medical coverage, extended health and dental coverage which will continue for the statutory notice period specified in the Employment Standards Act. If the Effective Date of Termination without cause is after the Employer’s fiscal year end date, the Employee will be eligible for a STIP incentive payment for the previous fiscal year, as determined in accordance with the standard terms of the STIP. In a without cause termination, eligibility for the STIP is only applicable for the previous fiscal year, not for the current year. The Employee is not entitled to any compensation arising from his dismissal other than as expressly set out in this provision. The Employee’s legal right to notice or compensation in lieu is governed by this provision, not by common law.

(c) Notwithstanding any of the foregoing, the Employer may terminate the Employee’s employment at any time for cause without notice or pay in lieu for notice of any kind. Where the Employer terminates the Employee’s employment for cause, all of the Employee’s benefits and perquisites will immediately terminate. If there is a dispute as to whether the Employer has cause for dismissal, and if it is determined by a court of competent jurisdiction that the Employer did not have cause for dismissal, the Employee will be entitled to damages in the amount of compensation the Employee would have received had the Employer terminated the Employee without cause in accordance with Subsection 4(b) above.

(d) The Employee will not, as a result of the termination of the Employee’s employment either by the Employee or by the Employer, be entitled to any

September 29, 2016 4

notice, payments, benefits or damages in excess of those specified in this Section 4 unless an arbitrator determines the Employer made a bad faith decision to allege cause for termination or the Employer engaged in bad faith conduct in the administration of this Agreement, in which case the Employee may claim damages in excess of those specified in this Section 4.

(e) Upon termination or resignation of the Employee’s employment pursuant to this Section 4, this Agreement and the employment of the Employee shall be wholly terminated with the exception of the clauses specifically contemplated to continue in full force and effect beyond the termination of this Agreement, including those set out in Sections 9, 10, 12, 13, 14, 15, 16, 17, 19, 21 and 22.

5. Suspension

(a) The Employer may suspend the Employee from the Employee’s duties and direct the Employee not to attend the Employer’s premises, provided the Employer continues to provide Base Salary and benefits to the Employee (“Paid Suspension”), and informs the Employee of the reason for the suspension.

(b) During any period the Employee is placed on paid suspension, the Employee must observe all obligations of employment and this Agreement (which are not inconsistent with any direction given). The Employee must also observe all common law duties as an employee of the Employer, such as the duty of good faith, fidelity and confidentiality.

(c) During a period the Employee is on paid suspension, the Employee must not obtain or engage in employment or work from any other source (whether or not a competitor of the Employer) without the prior written consent of the Employer.

6. Regulatory Approval

(a) The Employee’s employment with the Employer is subject to and conditional upon the Employee obtaining and maintaining any personal licences or approvals required by gaming regulators in any jurisdiction where the Employer or its subsidiaries conducts its operations and which are necessary for the Employee to discharge his duties under this Agreement.

(b) In the event that any gaming regulator suspends, cancels or fails to renew any such licence or the Employee does not otherwise satisfy at all times the regulatory requirements of any gaming regulatory authority or body which are necessary for the Employee to discharge his duties under this Agreement, the Employee’s employment with the Employer may be suspended without pay or terminated for cause at the Employer’s discretion.

(c) The Employee agrees that he must immediately advise the Employer and all relevant gaming regulators: (i) if charged with or convicted of any criminal offence, (ii) on the commencement or finalisation of any civil proceedings in which the Employee is a party, (iii) on the commencement of any bankruptcy proceedings against the Employee, (iv) upon any order of default judgment

September 29, 2016 5

against the Employee, or (v) upon making any change of name or residential address. Failure to provide such information may lead to suspension or cancellation of any licence, and disciplinary action, up to and including termination of employment for cause.

7. Conflicts of Interest

(a) The Employee agrees he will not, during his employment, be involved in any way with any other business either on his own account or as an employee, director, consultant or contractor unless specifically authorized in writing by the Employer to do so. If the Employee is involved with a business unrelated to the gaming industry, his involvement must not interfere or distract from the fulfillment of his duties with Gateway Casinos and he must disclose this affiliation to the Compliance Manager.

(b) The Employee agrees he will not, during his employment, accept or undertake to accept, either directly or indirectly, any gifts, commissions or other favour of any kind whatsoever in connection with his work except with the prior consent of the Employer or in accordance with the Employer’s policy.

8. Use of Facilities

Except with written permission of the Board or its authorised delegate, the Employee acknowledges and agrees:

(a) during the Employee’s employment, the Employee is prohibited from gambling at any gaming facility or operation (including any electronic or internet-based gaming facility or operation) operated or offered by the Employer or any related companies or businesses. The Employer will strictly enforce this prohibition and any contravention will be subject to disciplinary action, up to and including termination for cause; and

(b) during the Employee’s employment, and for a period of three (3) months following the termination of the Employee’s employment with the Employer for any reason, he is prohibited from gambling at any gaming facility or operation (including any electronic or internet-based gaming facility or operation) operated or offered by the Employer or any related companies or businesses.

9. Restrictive Covenants

(a) Covenant Not to Compete. During the Employee’s employment and following the termination thereof for the duration of the Restricted Period, the Employee shall not, either individually or with others, directly or indirectly, whether through agents, employees, corporations or other business entities, or through any other means whatsoever, engage in duties equivalent to those performed under this Agreement for Competitors of the Employer.

“Restricted Period” shall mean:

September 29, 2016 6

a) in the event of the Employee’s resignation or termination for cause, twelve (12) months;

b) in the event of the Employee’s termination without cause, six (6) months;

“Competitors” shall mean;

a) within the Province of British Columbia, Great Canadian Gaming Corporation, Paragon Gaming, the British Columbia Lottery Corporation and Pacific Fundraising;

b) within the Province of Alberta, Paragon Gaming and Casino ABS; and

c) gaming operations within the Province of Ontario.

(b) Non-solicitation of Clients or Customers. During the Employee’s employment and for a period of eighteen (18) months following the termination thereof, regardless of the reason therefore, the Employee shall not solicit or attempt to solicit any client or customer or prospective client or customer of the Employer, which has been solicited, engaged or serviced by the Employer within one (1) year prior to the termination of this Agreement.

(c) Non-solicitation of Employees. During the Employee’s employment and for a period of eighteen (18) months following the termination of this Agreement, regardless of the reason therefore, the Employee shall not attempt to solicit for employment or employ any person who was employed by the Employer at any time during the six (6) month period immediately preceding the termination of this Agreement.

(d) Corporate Opportunities. Any business opportunities related to the business of the Employer, or any of its affiliates, which become known to, or are learned by, the Employee during the period of his employment hereunder must be fully disclosed and made available to the Employer by the Employee and the Employee agrees not to take or omit to take any action if the result would be to divert from the Employer or any of its affiliates any opportunity which is within the scope of its business as known to or learned by the Employee from time to time.

10. Reasonableness of the Restrictive Covenants

The Employee confirms that the obligations in Section 9 are fair and reasonable given that, among other reasons:

(a) The Employee’s role with the Employer has and will continue to expose the Employee to Confidential Information regarding the Employer’s business strategies and technology, and the Employer’s unique methods of satisfying its customers and clients, all of which the Employee agrees not to act upon to the detriment of the Employer;

(b) the Employer operates in a highly competitive market;

September 29, 2016 7

(c) the nature of the Business is such that the Employee could relatively easily and effectively compete with the Employer from any place in the world;

(d) the Employee has access to confidential information of the Employer, including plans and strategies for its business, which the Employee is privy to;

(e) the Employee will be paid by the Employer an amount equivalent to a significant period of the non-compete covenant in the event the termination of the Employee’s employment is not his decision and is without cause; and

(f) the Employee will be privy to important business development and strategic work by the Employer and the Employee agrees that the obligations in Section 9, together with the Employee’s other obligations under this Agreement, are reasonably necessary for the protection of the Employer’s proprietary interests. The Employee further confirms that the geographic scope of the obligation in Section 9 is reasonable given the international nature of the market business. The Employee also acknowledges and agrees that his obligations under this Agreement will not preclude him from becoming gainfully employed following a termination of his employment with the Employer given the Employee’s training, general knowledge and experience.

11. Adherence to Policies and Procedures

The Employee agrees to abide by the Code of Professional Conduct and all other Employer, and regulatory authorities’ policies, procedures and standards as amended from time to time. The Employee understands that failure to do so will be considered just cause for disciplinary action up to and including termination of employment for cause as appropriate.

12. Confidential Information

(a) For the purposes of this Agreement, “Confidential Information” means, in addition to its meaning under applicable law, information which is not generally known in the Employer’s industry and which is proprietary to the Employer including:

(i) trade secret information about the Employer and its business; and

(ii) information relating to the business of the Employer or anticipated to be conducted by the Employer and to any of its past, current or anticipated business, including, without limitation, information about the Employer’s purchasing, accounting, marketing, selling, or servicing.

Without limiting the foregoing, all information which the Employee has a reasonable basis to consider Confidential Information or which is treated by the Employer as being Confidential Information shall be presumed to be Confidential Information, whether originated by the Employee or by others, and without regard to the manner in which the Employee obtains access to such information. All Confidential Information shall be and remain at all times the exclusive property of the Employer.

September 29, 2016 8

(b) Except as required by law, the Employee shall not, either during the term of this Agreement or any time following expiration or termination of this Agreement, use or disclose any Confidential Information to any person not employed by the Employer without the prior written authorization of the Employer and shall exercise prudence and reasonable care to safeguard and protect, and to prevent the unauthorized disclosure of Confidential Information.

(c) Upon expiration or termination of this Agreement, or at the Employer’s request, the Employee shall turn over to the Employer all property in the Employee’s possession and custody and belonging to the Employer. The Employee shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, drawings, photographs or other documents relating in any way to the affairs of the Employer which came into the Employee’s possession at any time during the term of this Agreement.

13. Ownership of Intellectual Property:

(a) The Employee agrees that every improvement, invention, process, apparatus, method, design and any other creation that the Employee may invent, discover, conceive, or originate by himself or in conjunction with any other Person during the term of the Employee’s employment under this Agreement that relates to the business carried on by the Employer during the term of the Employee’s employment under this Agreement shall be the exclusive property of the Employer.

(b) The Employee acknowledges and agrees that the Employee will not acquire any right, title or interest in or to the Confidential Information.

(c) The Employee agrees to make full disclosure to the Employer of each Development promptly after its creation. The Employee also agrees to disclose to the Employer every patent application, notice of copyright or other action taken by the Employee or any Person working directly or indirectly with the Employee to protect intellectual property during the term of this Agreement and for 18 months thereafter. The Employee hereby assigns and transfers to the Employer, and agrees that the Employer will be the exclusive owner of, all of the Employee’s right, title and interest to each Development throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein. The Employee further agrees to cooperate fully at all times during and subsequent to the Employee’s employment with respect to signing further documents and doing such acts and other things reasonably requested by the Employer to confirm such transfer of ownership of rights, including intellectual property rights, effective at or after the time the Development is created and to obtain patents or copyrights or the like covering the Developments. The Employee agrees that the obligations in this section will continue beyond the termination of the Employee’s employment with the Employer with respect to Developments created during the Employee’s employment with the Employer.

September 29, 2016 9

(d) The Employee agrees that the Employer, its assignees and their licensees are not required to designate the Employee as the author of any Developments. The Employee hereby waives in whole all moral rights which the Employee may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to restrain or claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection with any service, cause or institution.

(e) Protection of Computer Systems and Software. The Employee agrees to take all necessary precautions to protect the computer systems and software of the Employer and of the suppliers and clients of the Employer.

(f) Definitions. In this Section, the following definitions have the following meanings:

“Developments” includes all:

(i) products, software, data, designs, devices, integrated circuit topographies, reports, flowcharts, research results, trade-marks, models, specifications and source code listings, and any related works, including any enhancements, modifications or additions to the Products owned, licensed, sold, marketed or used by the Employer;

(ii) copyrightable works of authorship including, without limitation, any technical descriptions for Products, user guides, illustrations and advertising materials; and

(iii) inventions, discoveries, procedures, methodologies, concepts, ideas, improvements, modifications, algorithms, formulae, processes, techniques, systems and improvements or modifications thereto,

whether patentable or not, developed, created, generated or reduced to practice by the Employee, alone or jointly with others, during the Employee’s employment with the Employer or which result from tasks assigned to the Employee by the Employer or which result from the use of the premises or property (including equipment, supplies or Confidential Information) owned, leased or licensed by the Employer.

“Products” means:

(i) any intellectual property or assets discovered, developed, owned, licensed, sold, marketed or used by the Employer in connection with the Business, including enhancements, modifications, additions or other improvements to such intellectual property; and

September 29, 2016 10

(ii) any other services or products discovered, developed, re-profiled, repositioned, produced, licensed, sold or marketed by the Employer during the Employee’s employment.

14. Remedies

The parties agree that the Employee’s services to be rendered pursuant to the terms of this Agreement are unique and special; that in the event of the Employee’s breach of Sections 9,12 and 13 of this Agreement, damages would be an inadequate remedy and difficult to ascertain, and that the Employer would suffer irreparable harm from such breach; and therefore that in the event of such breach by the Employee, the Employer, in addition to any remedies the Employer may have at law, shall have the right to equitable relief including injunctive relief against the Employee in the event of breach of the covenants contained in Sections 9,12 and 13 of this Agreement.

15. Dispute Resolution

In the event of a dispute arising out of or in connection with this Agreement, or in respect of any legal relationship associated with it or from it, which does not involve the Employer seeking a court injunction or other relief in order to protect its business, confidential information, intellectual or other property, that dispute will be resolved as follows:

(a) Amicable Negotiation—The Parties agree that, both during and after the performance of their responsibilities under this Agreement, each of them will make bona fide efforts to resolve any disputes arising between them by amicable negotiations;

(b) Mediation—If the Parties are unable to negotiate resolution of a dispute, either Party may refer the dispute to mediation by providing written notice to the other Party. If the Parties cannot agree on a mediator within thirty (30) days of receipt of the notice to mediate, then either Party may make application to the British Columbia Mediator Roster Society to have one appointed. The mediation will be held in Vancouver, B.C., in accordance with the British Columbia International Commercial Arbitration Centre’s (the “BCICAC”) under its Commercial Mediation Rules, and each Party will bear its own costs, including one-half share of the mediator’s fees.

(c) Arbitration—If, after mediation, the Parties have been unable to resolve a dispute and the mediator has been inactive for more than 90 days, or such other period agreed to in writing by the Parties, either Party may refer the dispute for final and binding arbitration by providing written notice to the other Party. A roster of Arbitrators with expertise in employment matters will be mutually agreed by the parties. If the Parties cannot agree on an arbitrator within thirty (30) days of receipt of the notice to arbitrate, then either Party may make application to the British Columbia Arbitration & Mediation Institute to appoint one. The arbitration will be held in Vancouver, B.C., in accordance with the BCICAC’s Rules for Domestic Commercial Arbitration as the parties may mutually agree to modify, and each Party will bear its own costs, including one-half share

September 29, 2016 11

of the arbitrator’s fees, unless the arbitrator determines the Employer engaged in improper conduct in any aspect of the arbitration process, made a bad faith decision to allege cause for termination, or otherwise acted in bad faith in the administration of this Agreement, in which case the parties may make submissions regarding costs and fees.

16. Survival

(a) This Agreement once signed, shall survive changes in the Employer and its business including but not limited to the passage of time, changes in duties or responsibilities, changes in compensation and changes in ownership.

(b) Except as otherwise provided herein, each and all of the provisions of Sections 9, 10,12,13,14,15,16,17,19, 21 and 22 shall survive the termination of this Agreement and the Employee’s employment under this Agreement (regardless of the reason for such termination).

17. Waiver

No waiver of any term, condition or covenant of this Agreement shall be deemed to be a waiver of subsequent breaches of the same or other terms, covenants or conditions hereof.

18. Assignability

The Employee may not assign this Agreement to any third party for whatever purpose; however, the Employer may assign its obligations under this Agreement to any of its subsidiaries, affiliates or successors. The Employer may not otherwise assign this Agreement to any third party without the express written consent of the Employee. The Employer may require the Employee to perform management services for a related party, provided that the Employer continues to employ the Employee and the management services are in an executive capacity.

19. Severability

In the event part or any portion of this Agreement is determined in a legally binding manner to be invalid and unenforceable, the parties agrees that the remainder of this Agreement shall remain in force and effect between them and applied as if the offending part or portion did not comprise an element of this Agreement. Further, if any provision of this Agreement is held by a court of competent jurisdiction to be excessively broad as to duration, activity, geography, or subject, said court will deem and interpret such provision to be valid and enforceable to the maximum duration, activity, geographic extent, and subject permissible under applicable law.

20. Employee Acknowledgement

The Employee acknowledges that:

(a) The Employee has had sufficient time to review this Agreement thoroughly;

(b) The Employee has read and understands the terms of this Agreement and the obligations hereunder, and

September 29, 2016 12

(c) The Employee has been given an opportunity to obtain independent legal advice concerning the interpretation and effect of this Agreement.

21. Entire Agreement

This Agreement constitutes the entire agreement between the Employee and the Employer with respect to the subject matter herein. It supersedes and replaces any and all earlier or additional agreements or representations, whether oral or written. All such agreements or representations are invalid and non-operative, whether or not they conflict with any of the terms of this Agreement.

22. Governing Law and Jurisdiction

This Agreement shall be governed by and construed under the laws of the Province of British Columbia.

23. Counterparts

This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original and all of which will constitute one Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

SIGNED, SEALED AND DELIVERED by Brad Bardua in the presence of:	) ) ) ) ) ) ) ) ) ) ) ) )
Signature of witness
Scott Phillips
Print Name		Brad Bardua
1363 Charter Hill Dr. Coquitlam BC
Address
VP, Human Resources
Occupation

THE EMPLOYER, GATEWAY CASINOS & ENTERTAINMENT LIMITED
By:
	Authorized Signatory
By:
	Authorized Signatory
Encl.	Schedule A: Equity Program—Brad Bardua

September 29, 2016 13

SCHEDULE A:

Equity Program—Brad Bardua

This document sets forth the terms of the equity program of Gateway Casinos & Entertainment Limited (“Gateway” or the “Company”) as they are applicable to you.

As an incentive for you to assist in creating value in the Company, subject to the terms hereof, if a Liquidity Event (as defined below) occurs during the Equity Participation Term (as defined below), you will be entitled to receive consideration (the “Equity Participation”) equal to 1.00% of the consideration received by the existing holders immediately prior to any Liquidity Event (the “Existing Shareholders”) of the Company Shares (as defined below) that are subject to such Liquidity Event on the following basis.

Equity Participation Formula

The Equity Participation (“EP”) will be calculated as follows:

Going Public Transaction: EP = X x 0.01 (expressed as a number of Company Shares)

Disposition: EP = (Y1 x Y2) x 0.01 (expressed as a number of Company Shares)*

Dividend Payment or Sale of Company: EP = (X x Z) x 0.01 (expressed as a dollar value)

where:

X = the total number of Company Shares subject to a Liquidity Event;

Y1 = the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition;

Y2 = the total number of Company Shares outstanding (including any Company Shares not subject to the Disposition); and

Z = the consideration received (in whatever form) per Company Share pursuant to the Liquidity Event.

* Upon a Disposition resulting in the Principal Shareholder owning less than 10% of the Company Shares owned by the Principal Shareholder as at the date hereof, you will be entitled to receive the remaining portion of your total Equity Participation.

The Company shall pay the Equity Participation to you, less any required statutory deductions. The Equity Participation will only be settled in shares issued from treasury and will not be paid in cash.

Illustration of Calculations

For example:

(a) If the Company Shares sold by the Existing Shareholders pursuant to a Going Public Transaction represent 30% of the Company’s shares qualified for sale (and sold) pursuant to the prospectus filed in connection with the Going Public

September 29, 2016 14

Transaction, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 1.00% of the Company Shares so sold, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Liquidity Event, of the appropriate number of common shares of Gateway.

For illustration purposes only, if Gateway completes a Going Public Transaction where Company Shares sold by the Existing Shareholders equal 10,000,000 Company Shares:

EP = X x 0.01

= 10,000,000 x 0.01

= 100,000 Company Shares

(b) If, after a Going Public Transaction, the Company Shares sold by the Principal Shareholder pursuant to a Disposition represent 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 1.00% of the product of (A) the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition, and (B) the total number of Company Shares outstanding, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Disposition, of the appropriate number of common shares or entitlements thereto. For greater certainty, the percentage of Company Shares owned by the selling Principal Shareholder, referenced immediately above in (b)(i)(A), shall not take into account any common shares of Gateway acquired by such Principal Shareholder after the date hereof.

For illustration purposes only, if, after a Going Public Transaction, the Principal Shareholder completes a secondary public offering of an aggregate of 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding:

EP = (Y1 x Y2) x 0.01

= (33.3% x 40,000,000) x 0.01

= 133,333 Company Shares

(c) If the Company Shares being acquired by a person(s) that is not a Related Party(ies) pursuant to a Liquidity Event represent 100% of the then outstanding Company Shares, (i) the Equity Participation (expressed as a dollar value) will be equal to 1.00% of the consideration received for all of those Company Shares, and (ii) the Equity Participation shall be satisfied through the delivery to you, immediately prior to, and conditional on, the completion of the Liquidity Event, of the appropriate number of Company Shares.

For illustration purposes only, if 40,000,000 Company Shares are acquired by a person pursuant to a plan of arrangement for consideration of $10 per Company Share:

EP = (X x Z) x 0.01

= (40,000,000 x $10) x 0.01

= $4,000,000 of Company Shares

September 29, 2016 15

Definitions

For purposes of the equity program, the following terms shall have the following meanings:

(a) “Board” means the board of directors of the Company;

(b) “Company Shares” means, collectively, (i) the 39,356,817 common shares of the Company outstanding as of the date hereof, and (ii) such other shares issued from treasury by the Company that the Board determines, acting reasonably, should be considered to be “Company Shares” for the purposes of this Agreement; provided, however, that unless otherwise determined by the Board in its sole discretion, any common shares issued from treasury in connection with a Going Public Transaction shall not constitute “Company Shares” for the purposes of this document;

(c) “Disposition” means, after the completion a Going Public Transaction, any disposition, sale or transfer of Company Shares by the Principal Shareholder including, but not limited to, the sale of Company Shares through: (i) a secondary public offering; (ii) a private agreement; or (iii) the facilities of a Recognized Exchange or any other stock exchange on which the Company Shares may be listed from time to time;

(d) “Dividend Payment” means the declaration and payment of a dividend to the holders of the Company Shares, other than the declaration and payment of a periodic dividend pursuant to a dividend policy adopted by the Company, it being understood that the Board will also review its short term incentive program in connection with its adoption of a dividend policy in order to incentivize and align the interests of the executives with the shareholders;

(e) “Equity Participation Term” means the period commencing on the Start Date and ending on: (i) the Termination Date in respect of the termination of your employment for any reason other than termination by the Company without just cause; and (ii) six months following the Termination Date in respect of the termination of your employment by the Company without just cause;

(f) “Going Public Transaction” means the completion of an initial or secondary public offering of Company Shares by the Existing Shareholders following the issuance of a receipt by the applicable securities regulator for a final prospectus in connection with such public offering; provided, however, that upon completion of the public offering, the shares of the Company (including such Company Shares) are posted for trading on a Recognized Exchange. For greater certainty, a Going Public Transaction for the purposes of this document shall not include a treasury issuance of the Company’s shares;

(g) “Liquidity Event” means the occurrence of any one or more of the following events or circumstances: (i) a Going Public Transaction; (ii) a Disposition; (iii) a Dividend Payment; and (iv)(A) the acquisition of all of the issued and outstanding common shares of the Company by a person (other than a Related Party) pursuant to a take-over, amalgamation, plan of arrangement or other business combination, or (B) the sale of all or substantially all of the assets of the Company to a person (other than a Related Party), that results in the Existing Shareholders receiving in exchange for their Company Shares, consideration consisting of entirely or a combination of (1) cash or (2) securities of the acquiring person (or an affiliate of such person); provided, however, that, unless determined otherwise by the Board in its sole discretion, a

September 29, 2016 16

“Liquidity Event” shall not include a reverse take-over or similar transaction (regardless of whether such transaction is implemented pursuant to an arrangement, amalgamation or other structure), it being agreed by you and the Company that a reverse takeover is not generally the type of transaction contemplated to give rise to the realization of new value for the Company Shares as contemplated herein, and should not generally result in Equity Participation rights;

(h) “Principal Shareholder” means The Catalyst Capital Group Inc. and its affiliates;

(i) “Recognized Exchange” means the Toronto Stock Exchange, TSX Venture Exchange, London Stock Exchange, New York Stock Exchange, NYSE Amex Equities and the NASDAQ stock market or any successors thereto, and any other stock exchange that the Company and its financial advisor may agree, in writing, should constitute a recognized exchange for the purposes of this Agreement;

(j) “Related Party” means:

i. any person who is a holder of Company Shares as of the date of this Agreement and any shareholder, officer, director, partner or employee of such person;

ii. any employee or group of employees of the Company;

iii. a trustee or other fiduciary holding Company Shares under an employee benefit plan of the Company; or

iv. a corporation owned directly or indirectly by the holders of Company Shares in substantially the same proportion as their ownership of Company Shares;

(k) “Start Date” means the date you commence to actively perform services for the Company under your employment agreement; and

(l) “Termination Date” means the date on which your employment is terminated and you cease to actively perform services for the Company and, for greater certainty, shall not include any reasonable notice period following the termination of your employment, nor any period in respect of which you are eligible for or in receipt of severance pay.

All of your entitlements and rights to Equity Participation shall terminate at the end of the Equity Participation Term.

If you have any further questions or concerns, please do not hesitate to contact the undersigned.

Date: 9/29/16

Authorized Signature:

Title of Authorized Signatory: President / CEO

September 29, 2016 17

EX-10.8

Exhibit 10.8

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 26^th day of June, 2014

BETWEEN:

Keith Andrews an executive with a residential address at:

5985 Baxter Crescent, Lasalle, Ontario, N9H 2N9

(the “Employee”)

AND:

GATEWAY CASINOS AND ENTERTAINMENT LIMITED, a

company incorporated under the laws of the Province of British

Columbia and continued under the laws of Canada, with a head office at

300 – 4621 Canada Way, Burnaby, B.C., V5G 4X8

(the “Employer”)

WHEREAS:

A. The Employer is engaged in the business of operating and managing gaming facilities in British Columbia and Alberta (the “Business”);

B. The Employee is an executive with experience in gaming operations and wishes to provide his services to the Employer;

C. The Employer and Employee (together the “Parties”) wish to enter into an employment agreement (the “Agreement”) upon the terms and conditions set forth herein.

NOW THEREFORE in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:

1. Employment

This Agreement is in effect the later of June 27, 2014 or the date the Employee accepts the terms and conditions set out in this Agreement (the “Effective Date”).

2. Duties and Responsibilities

(a) The Employee will serve the Employer diligently and faithfully in the performance of his duties and responsibilities as Senior Vice President, Managing Director of Ontario, reporting to the Chief Executive Officer. The Employee’s duties and responsibilities will include such duties and responsibilities as the Employer may reasonably prescribe from time to time within the scope of the Employee’s capacity as an executive.

(b) The Employee will carry out his duties and responsibilities in a good and faithful manner, using his best efforts to advance the interests of the Employer. The Employee will at all times and in all respects conform to and comply with the reasonable and lawful directions given by the Employer’s board of directors (the “Board”) and the Employer’s representatives from time to time.

June 26, 2014

(c) During employment with the Employer, the Employee will, unless prevented by ill health, devote the whole of the Employee’s normal working time and attention to the businesses and affairs of the Employer and its related entities, and the Employee will promote, develop and extend the businesses and affairs of the Employer to the best of the Employee’s ability.

(d) The Employer and the Employee will mutually establish annual key performance objectives (“KPOs”).

(e) The Employee will comply with the Employer’s Policies and Procedures, including the Code of Conduct, as introduced, determined or amended from time to time by the Employer. The Employee acknowledges that some of the Employer’s Policies and Procedures provide that a failure to comply may result in disciplinary or other action being taken by the Employer, and agrees to familiarise himself with all Policies and Procedures, to ensure compliance therewith.

3. Compensation

(a) The Employer will provide to the Employee a gross annual base salary in the amount of CAD$300,000 less statutory and other payroll withholdings and deductions, payable in biweekly instalments in arrears (the “Base Salary”). As part of management the Employee is expected to work whatever hours are necessary to fulfill his duties and responsibilities. The Employee’s Base Salary has been established with this in mind, therefore no additional overtime wages will be paid and no time off in lieu will be granted.

(b) The Employee’s performance and compensation will be reviewed nine (9) months after the employee’s start date and annually thereafter starting April 2016 as part of the annual salary review process by the CEO which may result, in an increase of the Base Salary. This review will take into consideration the Employee’s individual performance against the agreed KPOs, the Employer’s overall performance for the year and other factors the CEO considers appropriate in his sole discretion.

(c) The Employee will be eligible for a one time lump sum bonus of CAD$60,000 less statutory and other payroll withholdings and deductions upon the success of the RFP for the Eastern Ontario Bundle. This bonus payment does not form part of the Employee’s compensation under Section 4 of this Agreement. This bonus payment is earned by the Employee upon payment by the Employer, and is conditional upon a continuing employment relationship between the Employer and the Employee. No bonus will be earned by or payable to the Employee during a Resignation Period or a notice period.

(d) The Employee will also be eligible to participate in the Employer’s annual Short Term Incentive Plan (the “STIP”). Under the terms of the current STIP, as in effect from time to time, the Employee may be awarded an incentive payment after the financial year-end, which is no greater than forty percent (40%) of his base salary based on the Employer’s financial performance, and the Employee achieving his Key Performance Objectives (“KPOs”) for that financial year. Staff members hired or promoted during the eligibility period will be subject to a prorated payment equal to the number of completed months of

June 26, 2014 2

active employment in a STIP entitled position. The STIP, its terms and conditions, and any payments thereunder are subject to cancellation, variation and approval each year at the sole discretion of the Board, effective immediately and without notice. STIP payments and any other form of Bonus payments do not form part of the Employee’s Annual Base Salary under Section 4 of this Agreement. If the Employee’s employment should end ‘without cause’ prior to the end of the STIP eligible year (calendar year) and provided that the Ontario region’s financial goals are on track as determined by the CEO, the Employee’s STIP payment will be paid at 80% of what he would have been eligible for if he had continued his employment for the full calendar year (considering also, any proration of STIP that may apply in the first year due to starting employment part-way through the calendar year as mentioned above). If the employee has been continuously employed throughout the STIP eligible year, but has been terminated ‘without cause’ prior to the standard STIP pay date, he will be paid 80% of his eligible STIP payment upon termination (provided that the Ontario region’s financial goals had been achieved for that year as determined by the CEO). No bonuses will be earned by or payable to the Employee during a Resignation Period.

(e) The Employee is eligible to participate in the Employer’s equity program, subject to the terms and conditions of the program. Under the equity program, the Employee will be entitled to receive consideration (the “Equity Participation”) equal to 0.25% of the consideration received by holders of the Company Shares that are subject to the Liquidity Event (the “Subject Shares”). A separate letter spelling out the details of the equity program is attached hereto as Schedule “A” to this Agreement. In the event that the award of the Equity Participation triggers tax consequences under Canadian income tax laws for the relevant taxation year for which the Employee is unable to satisfy, the Employer agrees to provide a loan on favourable terms so that the Employee can satisfy such tax consequences. For greater certainty, the Parties agree that the aforesaid loan shall be repaid in accordance with the terms thereof.

(f) The Employer will provide the Employee with a standard package of benefits made available to the Employer’s executive and management employees. The Employee’s rights under any such benefits plans now in force or later adopted by the Employer are governed by the terms and conditions of such benefits plans and the policies of the Employer in effect from time to time.

(g) All benefits are subject to the terms of the carrier’s policy from time to time in effect. The terms and conditions or application of the benefits may be changed from time to time at the carrier’s or Gateway Casinos’ discretion. The obligation and liability of Gateway Casinos regarding benefits are limited to the payment of its portion of the premiums only. Any disputes about eligibility for benefits or related issues are matters between you and the carrier under its policy.

(h) The Employer will promptly reimburse the Employee for the reasonable travelling, entertainment, telephone and other expenses actually, properly and reasonably incurred by the Employee in connection with his employment. Such payment of or reimbursement for expenses is subject to the Employee keeping proper accounts and furnishing to the Employer within 30 days after the date the expenses are incurred, all applicable statements, vouchers and other evidence of expense in such form as requested by the Employer.

June 26, 2014 3

(i) The Employee’s vacation entitlement four (4) weeks annual vacation earned pro rata in accordance with the Employer’s policies and practices and subject to business and operational needs of the Employer. Vacation pay is based on 8% of total wages annually.

(j) The Employee’s vacation time will accrue incrementally over time. As vacation time is used, his vacation accrual will be adjusted accordingly. The Employee is responsible for ensuring that his unused vacation time/pay accrued does not exceed his yearly accrual allowance at any point in time. Gateway reserves the right at its sole discretion, to require an employee to take vacation time that is in excess their accrual allowance within a specific time period. Upon cessation of employment the Employee’s vacation taken will be reconciled against the vacation pay accrued and the Employee’s acceptance of this offer is his consent to the appropriate adjustments being made to his pay.

(k) The Employee will be provided with a cell phone and associated costs will be paid by the Employer. Reasonable personal use of the cell phone is permitted.

4. Termination

(a) The Employee may resign as an employee of the Employer at any time during the term by giving to the Employer three (3) months’ prior written notice of the effective date of such resignation (the “Resignation Period”). On giving of any such notice, or at any time during the Resignation Period, the Employer will have the right to immediately accelerate the Employee’s effective resignation date by payment to the Employee of the pro rata Base Salary due to the Employee for the balance of the Resignation Period. The Employer may require, for all or part of the Resignation Period, that the Employee: (i) not attend work, (ii) perform other duties, (iii) or take up another position or role.

(b) The Employer may terminate the Employee’s employment at any time without cause. If termination occurs before the Employee has completed his first year (twelve months) of service, the Employer will pay the Employee a lump sum payment equal to six months of the Employee’s then Annual Base Salary less statutory deductions for service provided up to and including the sixth month of employment. In an instance where termination without cause occurs after the Employee has completed six months but less than twelve months service, the Employer will pay the Employee a lump sum of one month’s Annual Base Salary less statutory deductions for each completed month of service. (For example, if the Employee has worked 7 months, he will be eligible for a severance payment of 7 months of his Base Salary. If he works 8 months, he will be eligible for severance of 8 months of his Base Salary and so on, up to 12 months service) In an instance where termination without cause occurs at or after one year (12 months) of service, The Employer will pay the Employee a lump sum payment equal to the Employee’s then Annual Base Salary (12 months Base Salary), less statutory deductions. Upon termination of employment, all of the Employee’s benefits and perquisites will immediately terminate, except the Employee’s provincial medical coverage, extended health and dental coverage which will continue for the statutory notice period specified in the Employment Standards Act. The Employee is not entitled to any compensation arising from his dismissal other than as expressly set out in this provision. The Employee’s legal right to notice or compensation in lieu is governed by this provision, not by common law.

(c) Notwithstanding any of the foregoing, the Employer may terminate the Employee’s employment at any time for cause without notice or pay in lieu for notice of any kind.

June 26, 2014 4

Where the Employer terminates the Employee’s employment for cause, all of the Employee’s benefits and perquisites will immediately terminate. If there is a dispute as to whether the Employer has cause for dismissal, and if it is determined by a court of competent jurisdiction that the Employer did not have cause for dismissal, the Employee will be entitled to damages in the amount of compensation the Employee would have received had the Employer terminated the Employee without cause in accordance with Subsection 4(b) above.

(d) The Employer may, for business reasons, have occasion to lay you off for temporary periods. If your lay off exceeds thirteen (13) weeks in any period of twenty (20) consecutive weeks you are entitled to wages (Base Salary) in lieu of notice in accordance with this Section 4 and your employment will be deemed to be terminated at the beginning of the layoff.

(e) The Employee will not, as a result of the termination of the Employee’s employment either by the Employee or by the Employer, be entitled to any notice, payments, benefits or damages in excess of those specified in this Section 4.

(f) Upon termination or resignation of the Employee’s employment pursuant to this Section 4, this Agreement and the employment of the Employee shall be wholly terminated with the exception of the clauses specifically contemplated to continue in full force and effect beyond the termination of this Agreement, including those set out in Sections 9, 10, 12, 13, 14, 15, 16, 17, 19, 21 and 22.

5. Suspension

(a) The Employer may suspend the Employee from the Employee’s duties and direct the Employee not to attend the Employer’s premises, provided the Employer continues to provide Base Salary and benefits to the Employee (“Paid Suspension”), and informs the Employee of the reason for the suspension.

(b) During any period the Employee is placed on paid suspension, the Employee must observe all obligations of employment and this Agreement (which are not inconsistent with any direction given). The Employee must also observe all common law duties as an employee of the Employer, such as the duty of good faith, fidelity and confidentiality.

(c) During a period the Employee is on paid suspension, the Employee must not obtain or engage in employment or work from any other source (whether or not a competitor of the Employer) without the prior written consent of the Employer.

6. Regulatory Approval

(a) The Employee’s employment with the Employer is subject to and conditional upon the Employee obtaining and maintaining any personal licences or approvals required by gaming regulators in any jurisdiction where the Employer or its subsidiaries conducts its operations and which are necessary for the Employee to discharge his duties under this Agreement.

(b) In the event that any gaming regulator suspends, cancels or fails to renew any such licence or the Employee does not otherwise satisfy at all times the regulatory requirements of any gaming regulatory authority or body which are necessary for the

June 26, 2014 5

Employee to discharge his duties under this Agreement, the Employee’s employment with the Employer may be suspended without pay or terminated for cause at the Employer’s discretion.

(c) The Employee agrees that he must immediately advise the Employer and all relevant gaming regulators: (i) if charged with or convicted of any criminal offence, (ii) on the commencement or finalisation of any civil proceedings in which the Employee is a party, (iii) on the commencement of any bankruptcy proceedings against the Employee, (iv) upon any order of default judgment against the Employee, or (v) upon making any change of name or residential address. Failure to provide such information may lead to suspension or cancellation of any licence, and disciplinary action, up to and including termination of employment for cause.

7. Conflicts of Interest

(a) The Employee agrees he will not, during his employment, be involved in any way with any other business either on his own account or as an employee, director, consultant or contractor unless specifically authorized in writing by the Employer to do so.

(b) The Employee agrees he will not, during his employment, accept or undertake to accept, either directly or indirectly, any gifts, commissions or other favour of any kind whatsoever in connection with his work except with the prior consent of the Employer or in accordance with the Employer’s policy.

8. Use of Facilities

Except with written permission of the Board or its authorised delegate, the Employee acknowledges and agrees:

(a) during the Employee’s employment, the Employee is prohibited from gambling at any gaming facility or operation (including any electronic or internet-based gaming facility or operation) operated or offered by the Employer or any related companies or businesses. The Employer will strictly enforce this prohibition and any contravention will be subject to disciplinary action, up to and including termination for cause; and

(b) during the Employee’s employment, and for a period of three (3) months following the termination of the Employee’s employment with the Employer for any reason, he is prohibited from gambling at any gaming facility or operation (including any electronic or internet-based gaming facility or operation) operated or offered by the Employer or any related companies or businesses.

9. Restrictive Covenants

(a) Covenant Not to Compete. During the Employee’s employment and following the termination thereof for the duration of the Restricted Period, the Employee shall not, either individually or with others, directly or indirectly, whether through agents, employees, corporations or other business entities, or through any other means whatsoever, engage in duties equivalent to those performed under this Agreement for Competitors of the Employer.

“Restricted Period” shall mean:

June 26, 2014 6

a) in the event of the Employee’s resignation or termination for cause, twelve (12) months;

b) in the event of the Employee’s termination without cause, six (6) months;

“Competitors” shall mean;

a) within the Province of British Columbia, Great Canadian Gaming Corporation, Paragon Gaming, the British Columbia Lottery Corporation and Pacific Fundraising; and

b) within the Province of Alberta, Paragon Gaming and Casino ABS.

c) gaming operators within the Province of Ontario.

(b) Non-solicitation of Clients or Customers. During the Employee’s employment and for a period of twelve (12) months following the termination thereof, regardless of the reason therefore, the Employee shall not solicit or attempt to solicit any client or customer or prospective client or customer of the Employer, which has been solicited, engaged or serviced by the Employer within one (1) year prior to the termination of this Agreement.

(c) Non-solicitation of Employees. During the Employee’s employment and for a period of twelve (12) months following the termination of this Agreement, regardless of the reason therefore, the Employee shall not attempt to solicit for employment or employ any person who was employed by the Employer at any time during the six (6) month period immediately preceding the termination of this Agreement.

(d) Corporate Opportunities. Any business opportunities related to the business of the Employer, or any of its affiliates, which become known to, or are learned by, the Employee during the period of his employment hereunder must be fully disclosed and made available to the Employer by the Employee and the Employee agrees not to take or omit to take any action if the result would be to divert from the Employer or any of its affiliates any opportunity which is within the scope of its business as known to or learned by the Employee from time to time.

10. Reasonableness of the Restrictive Covenants

The Employee confirms that the obligations in Section 9 are fair and reasonable given that, among other reasons:

(a) The Employee’s role with the Employer has and will continue to expose the Employee to Confidential Information regarding the Employer’s business strategies and technology, and the Employer’s unique methods of satisfying its customers and clients, all of which the Employee agrees not to act upon to the detriment of the Employer;

(b) the Employer operates in a highly competitive market;

(c) the nature of the Business is such that the Employee could relatively easily and effectively compete with the Employer from any place in the world;

June 26, 2014 7

(d) the Employee has access to confidential information of the Employer, including plans and strategies for its business, which the Employee is privy to;

(e) the Employee will be paid by the Employer an amount equivalent to a significant period of the non-compete covenant in the event the termination of the Employee’s employment is not his decision and is without cause; and

(f) the Employee will be privy to important business development and strategic work by the Employer and the Employee agrees that the obligations in Section 9, together with the Employee’s other obligations under this Agreement, are reasonably necessary for the protection of the Employer’s proprietary interests. The Employee further confirms that the geographic scope of the obligation in Section 9 is reasonable given the international nature of the market business. The Employee also acknowledges and agrees that his obligations under this Agreement will not preclude him from becoming gainfully employed following a termination of his employment with the Employer given the Employee’s training, general knowledge and experience.

11. Adherence to Policies and Procedures

The Employee agrees to abide by the Code of Professional Conduct and all other Employer, and regulatory authorities’ policies, procedures and standards as amended from time to time. The Employee understands that failure to do so will be considered just cause for disciplinary action up to and including termination of employment for cause as appropriate.

12. Confidential Information

(a) For the purposes of this Agreement, “Confidential Information” means, in addition to its meaning under applicable law, information which is not generally known in the Employer’s industry and which is proprietary to the Employer including:

(i) trade secret information about the Employer and its business; and

(ii) information relating to the business of the Employer or anticipated to be conducted by the Employer and to any of its past, current or anticipated business, including, without limitation, information about the Employer’s purchasing, accounting, marketing, selling, or servicing.

Without limiting the foregoing, all information which the Employee has a reasonable basis to consider Confidential Information or which is treated by the Employer as being Confidential Information shall be presumed to be Confidential Information, whether originated by the Employee or by others, and without regard to the manner in which the Employee obtains access to such information. All Confidential Information shall be and remain at all times the exclusive property of the Employer.

(b) Except as required by law, the Employee shall not, either during the term of this Agreement or any time following expiration or termination of this Agreement, use or disclose any Confidential Information to any person not employed by the Employer without the prior written authorization of the Employer and shall exercise prudence and reasonable care to safeguard and protect, and to prevent the unauthorized disclosure of Confidential Information.

June 26, 2014 8

(c) Upon expiration or termination of this Agreement, or at the Employer’s request, the Employee shall turn over to the Employer all property in the Employee’s possession and custody and belonging to the Employer. The Employee shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, drawings, photographs or other documents relating in any way to the affairs of the Employer which came into the Employee’s possession at any time during the term of this Agreement.

13. Ownership of Intellectual Property:

(a) The Employee agrees that every improvement, invention, process, apparatus, method, design and any other creation that the Employee may invent, discover, conceive, or originate by himself or in conjunction with any other Person during the term of the Employee’s employment under this Agreement that relates to the business carried on by the Employer during the term of the Employee’s employment under this Agreement shall be the exclusive property of the Employer.

(b) The Employee acknowledges and agrees that the Employee will not acquire any right, title or interest in or to the Confidential Information.

(c) The Employee agrees to make full disclosure to the Employer of each Development promptly after its creation. The Employee also agrees to disclose to the Employer every patent application, notice of copyright or other action taken by the Employee or any Person working directly or indirectly with the Employee to protect intellectual property during the term of this Agreement and for 18 months thereafter. The Employee hereby assigns and transfers to the Employer, and agrees that the Employer will be the exclusive owner of, all of the Employee’s right, title and interest to each Development throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein. The Employee further agrees to cooperate fully at all times during and subsequent to the Employee’s employment with respect to signing further documents and doing such acts and other things reasonably requested by the Employer to confirm such transfer of ownership of rights, including intellectual property rights, effective at or after the time the Development is created and to obtain patents or copyrights or the like covering the Developments. The Employee agrees that the obligations in this section will continue beyond the termination of the Employee’s employment with the Employer with respect to Developments created during the Employee’s employment with the Employer.

(d) The Employee agrees that the Employer, its assignees and their licensees are not required to designate the Employee as the author of any Developments. The Employee hereby waives in whole all moral rights which the Employee may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to restrain or claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection with any service, cause or institution.

(e) Protection of Computer Systems and Software. The Employee agrees to take all necessary precautions to protect the computer systems and software of the Employer and of the suppliers and clients of the Employer.

(f) Definitions. In this Section, the following definitions have the following meanings:

June 26, 2014 9

“Developments” includes all:

(i) products, software, data, designs, devices, integrated circuit topographies, reports, flowcharts, research results, trade-marks, models, specifications and source code listings, and any related works, including any enhancements, modifications or additions to the Products owned, licensed, sold, marketed or used by the Employer;

(ii) copyrightable works of authorship including, without limitation, any technical descriptions for Products, user guides, illustrations and advertising materials; and

(iii) inventions, discoveries, procedures, methodologies, concepts, ideas, improvements, modifications, algorithms, formulae, processes, techniques, systems and improvements or modifications thereto,

whether patentable or not, developed, created, generated or reduced to practice by the Employee, alone or jointly with others, during the Employee’s employment with the Employer or which result from tasks assigned to the Employee by the Employer or which result from the use of the premises or property (including equipment, supplies or Confidential Information) owned, leased or licensed by the Employer.

“Products” means:

(i) any intellectual property or assets discovered, developed, owned, licensed, sold, marketed or used by the Employer in connection with the Business, including enhancements, modifications, additions or other improvements to such intellectual property; and

(ii) any other services or products discovered, developed, re-profiled, repositioned, produced, licensed, sold or marketed by the Employer during the Employee’s employment.

14. Remedies

The parties agree that the Employee’s services to be rendered pursuant to the terms of this Agreement are unique and special; that in the event of the Employee’s breach of Sections 9, 12 and 13 of this Agreement, damages would be an inadequate remedy and difficult to ascertain, and that the Employer would suffer irreparable harm from such breach; and therefore that in the event of such breach by the Employee, the Employer, in addition to any remedies the Employer may have at law, shall have the right to equitable relief including injunctive relief against the Employee in the event of breach of the covenants contained in Sections 9, 12 and 13 of this Agreement.

15. Dispute Resolution

In the event of a dispute arising out of or in connection with this Agreement, or in respect of any legal relationship associated with it or from it, which does not involve the Employer seeking a court injunction or other relief in order to protect its business, confidential information, intellectual or other property, that dispute will be resolved as follows:

June 26, 2014 10

(a) Amicable Negotiation – The Parties agree that, both during and after the performance of their responsibilities under this Agreement, each of them will make bona fide efforts to resolve any disputes arising between them by amicable negotiations;

(b) Mediation – If the Parties are unable to negotiate resolution of a dispute, either Party may refer the dispute to mediation by providing written notice to the other Party. If the Parties cannot agree on a mediator within thirty (30) days of receipt of the notice to mediate, then either Party may make application to the British Columbia Mediator Roster Society to have one appointed. The mediation will be held in Vancouver, B.C., in accordance with the British Columbia International Commercial Arbitration Centre’s (the “BCICAC”) under its Commercial Mediation Rules, and each Party will bear its own costs, including one-half share of the mediator’s fees.

(c) Arbitration – If, after mediation, the Parties have been unable to resolve a dispute and the mediator has been inactive for more than 90 days, or such other period agreed to in writing by the Parties, either Party may refer the dispute for final and binding arbitration by providing written notice to the other Party. If the Parties cannot agree on an arbitrator within thirty (30) days of receipt of the notice to arbitrate, then either Party may make application to the British Columbia Arbitration & Mediation Institute to appoint one. The arbitration will be held in Vancouver, B.C., in accordance with the BCICAC’s Shorter Rules for Domestic Commercial Arbitration, and each Party will bear its own costs, including one-half share of the arbitrator’s fees.

16. Survival

(a) This Agreement once signed, shall survive changes in the Employer and its business including but not limited to the passage of time, changes in duties or responsibilities, changes in compensation and changes in ownership.

(b) Except as otherwise provided herein, each and all of the provisions of Sections 9, 10, 12, 13, 14, 15, 16, 17, 19, 21 and 22 shall survive the termination of this Agreement and the Employee’s employment under this Agreement (regardless of the reason for such termination).

17. Waiver

No waiver of any term, condition or covenant of this Agreement shall be deemed to be a waiver of subsequent breaches of the same or other terms, covenants or conditions hereof.

18. Assignability

The Employee may not assign this Agreement to any third party for whatever purpose; however, the Employer may assign its obligations under this Agreement to any of its subsidiaries, affiliates or successors. The Employer may not otherwise assign this Agreement to any third party without the express written consent of the Employee. The Employer may require the Employee to perform management services for a related party, provided that the Employer continues to employ the Employee and the management services are in an executive capacity.

June 26, 2014 11

19. Severability

In the event part or any portion of this Agreement is determined in a legally binding manner to be invalid and unenforceable, the parties agrees that the remainder of this Agreement shall remain in force and effect between them and applied as if the offending part or portion did not comprise an element of this Agreement. Further, if any provision of this Agreement is held by a court of competent jurisdiction to be excessively broad as to duration, activity, geography, or subject, said court will deem and interpret such provision to be valid and enforceable to the maximum duration, activity, geographic extent, and subject permissible under applicable law.

20. Employee Acknowledgement

The Employee acknowledges that:

(a) The Employee has had sufficient time to review this Agreement thoroughly;

(b) The Employee has read and understands the terms of this Agreement and the obligations hereunder, and

(c) The Employee has been given an opportunity to obtain independent legal advice concerning the interpretation and effect of this Agreement.

21. Entire Agreement

This Agreement constitutes the entire agreement between the Employee and the Employer with respect to the subject matter herein. It supersedes and replaces any and all earlier or additional agreements or representations, whether oral or written. All such agreements or representations are invalid and non-operative, whether or not they conflict with any of the terms of this Agreement.

22. Governing Law and Jurisdiction

This Agreement shall be governed by and construed under the laws of the Province where the Employee works.

23. Counterparts

This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original and all of which will constitute one Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

SIGNED, SEALED AND DELIVERED by Keith	)
Andrews in the presence of:	)
	) )
Signature of witness	)	Keith Andrews
Susan Stockwell-Andrews	) )
Print Name	) )

June 26, 2014 12

5985 Baxter Cres	)
Address	)
Vice President, WFCU	)
Occupation	)
THE EMPLOYER, GATEWAY CASINOS & ENTERTAINMENT LIMITED

By:
	Authorized Signatory

June 26, 2014 13

April 7, 2016

Keith Andrews

Senior Vice President, Managing Director, Ontario

Dear Keith:

Re: 2016 Salary Review and KPO Process

This letter confirms that the 2016 salary review process has been completed and that a new and improved KPO program is now underway.

I am pleased to confirm that your annual salary will increase by $6,000 and your new annual salary will be $306,000, less all normal and statutory deductions, retroactive to April 1^st, 2016. This increase is based on a number of factors including your overall performance as well as internal & external equity considerations.

Your total compensation includes much more than just your salary. Please see your HR representative for information about your total compensation package including information about your provincial healthcare benefits, extended health & dental benefits, Group RSP, life & accident insurance, confidential counseling services through the Employee Assistance Program, vacation accruals and more.

We have already established your KPOs for 2016. We will enter these KPOs into the new performance review system, Halogen, to help both of us track your progress on the KPOs. Throughout the year we will meet to review your progress on these objectives and make adjustments as required.

Thank you for your efforts and ongoing commitment to the company’s success.

Sincerely,

Gateway Casinos and Entertainment Limited

Tony Santo

Chief Executive Officer

August 29, 2017

Personal and Confidential

Keith Andrews

5985 Baxter Crescent

LaSalle, ON

N9H 2N9

Dear Keith:

Re: Amendment to Your Employment Agreement

The purpose of this letter is to confirm the terms on which you and Gateway Casinos & Entertainment Limited (the “Employer”) have agreed to amend your employment agreement dated June 26, 2014, as subsequently amended on April 7, 2016 and October 5, 2016 (the “Agreement”). You and the Employer hereby agree amend the Agreement as follows:

1. Section 3(a) of the Agreement shall be amended to increase your Base Salary from $306,000 to $325,000 effective September 3, 2017

Except as amended above, all other terms and conditions of the Agreement shall continue to apply and remain in full force and effect.

To confirm your agreement to this amendment, please sign this letter in the space provided below and return it to Scott Phillips, SVP Human Resources by 5:00 p.m. on August 30, 2017. Once you sign and return this letter, it shall constitute a binding amendment to the Agreement.

Sincerely,

GATEWAY CASINOS & ENTERTAINMENT LIMITED

Tony Santo

Chief Executive Officer

***********************

I, Keith Andrews, have read, understand and having had a reasonable opportunity to obtain independent legal advice, hereby confirm that I am voluntarily consenting to and agreeing to the amendments to the Agreement as outlined above.

Date:	August 29, 2017
		Keith Andrews

Witness:

- 2 -

EX-10.11

Exhibit 10.11

PERSONAL AND CONFIDENTIAL

October 5, 2016

Keith Andrews

5985 Baxter Cresc

LaSalle, ON

N9H 2N9

Dear Keith:

This is to confirm that the equity program was recently reviewed and updated. You are eligible to participate in this equity program in accordance with the terms set out in the attached Schedule “A” to this letter. The Equity Program does not form part of your Base Salary.

All other terms and conditions from your Employment Agreement dated June 26, 2014 will remain in force and effect except as modified by this letter.

Yours truly,

Tony Santo

Chief Executive Officer

Encl.     Schedule A

Oct 27, 2016

SCHEDULE A

Equity Program: Keith Andrews

This document sets forth the terms of the equity program of Gateway Casinos & Entertainment Limited (“Gateway” or the “Company”) as they are applicable to you.

As an Incentive for you to assist in creating value in the Company, subject to the terms hereof, if a Liquidity Event (as defined below) occurs during the Equity Participation Term (as defined below), you will be entitled to receive consideration (the “Equity Participation”) equal to 0.33% of the consideration received by the existing holders immediately prior to any Liquidity Event (the “Existing Shareholders”) of the Company Shares (as defined below) that are subject to such Liquidity Event on the following basis.

Equity Participation Formula

The Equity Participation (“EP”) will be calculated as follows:

Going Public Transaction: EP = X x 0.0033 (expressed as a number of Company Shares)

Disposition: EP = (Y1 x Y2) x 0.0033 (expressed as a number of Company Shares)*

Dividend Payment or Sale of Company: EP = (X x Z) x 0.0033 (expressed as a dollar value)

where:

X = the total number of Company Shares subject to a Liquidity Event;

Y1 = the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition;

Y2 = the total number of Company Shares outstanding (including any Company Shares not subject to the Disposition); and

Z = the consideration received (in whatever form) per Company Share pursuant to the Liquidity Event.

*Upon a Disposition resulting in the Principal Shareholder owning less than 10% of the Company Shares owned by the Principal Shareholder as at the date hereof, you will be entitled to receive the remaining portion of your total Equity Participation.

The Company shall pay the Equity Participation to you, less any required statutory deductions. The Equity Participation will only be settled in shares issued from treasury and will not be paid in cash.

Illustration of Calculations

For example:

(a) If the Company Shares sold by the Existing Shareholders pursuant to a Going Public Transaction represent 30% of the Company’s shares qualified for sale (and sold) pursuant to the prospectus filed in connection with the Going Public Transaction, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 0.33% of the Company Shares so sold, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Liquidity Event, of the appropriate number of common shares of Gateway.

For illustration purposes only, if Gateway completes a Going Public Transaction where Company Shares sold by the Existing Shareholders equal 10,000,000 Company Shares:

EP	= X x 0.0033
	= 10,000,000 x 0.0033
	= 33,000 Company Shares

(b) If, after a Going Public Transaction, the Company Shares sold by the Principal Shareholder pursuant to a Disposition represent 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 0.33% of the product of (A) the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition, and (B) the total number of Company Shares outstanding, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Disposition, of the appropriate number of common shares or entitlements thereto. For greater certainty, the percentage of Company Shares owned by the selling Principal Shareholder, referenced immediately above in (b)(i)(A), shall not take into account any common shares of Gateway acquired by such Principal Shareholder after the date hereof.

For illustration purposes only, if, after a Going Public Transaction, the Principal Shareholder completes a secondary public offering of an aggregate of 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding:

EP	= (Y1 x Y2) x 0.0033
	= (33.3% x 40,000,000) x 0.0033
	= 44,000 Company Shares

(c) If the Company Shares being acquired by a person(s) that is not a Related Party(ies) pursuant to a Liquidity Event represent 100% of the then outstanding Company Shares, (i) the Equity Participation (expressed as a dollar value) will be equal to 0.33% of the consideration received for all of those Company Shares, and (ii) the Equity Participation shall be satisfied through the delivery to you, immediately prior to, and conditional on, the completion of the Liquidity Event, of the appropriate number of Company Shares.

For illustration purposes only, if 40,000,000 Company Shares are acquired by a person pursuant to a plan of arrangement for consideration of $10 per Company Share:

EP	= (X x Z) x 0.0033
	= (40,000,000 x $10) x 0.0033
	= $1,320,000 of Company Shares

Definitions

For purposes of the equity program, the following terms shall have the following meanings:

(a) “Board” means the board of directors of the Company;

(b) “Company Shares” means, collectively, (i) the 39,356,817 common shares of the Company outstanding as of the date hereof, and (ii) such other shares issued from treasury by the Company that the Board determines, acting reasonably, should be considered to be “Company Shares” for the purposes of this Agreement; provided, however, that unless otherwise determined by the Board in its sole discretion, any common shares issued from treasury in connection with a Going Public Transaction shall not constitute “Company Shares” for the purposes of this document;

(c) “Disposition” means, after the completion a Going Public Transaction, any disposition, sale or transfer of Company Shares by the Principal Shareholder including, but not limited to, the sale of Company Shares through: (i) a secondary public offering; (ii) a private agreement; or (iii) the facilities of a Recognized Exchange or any other stock exchange on which the Company Shares may be listed from time to time;

(d) “Dividend Payment” means the declaration and payment of a dividend to the holders of the Company Shares, other than the declaration and payment of a periodic dividend pursuant to a dividend policy adopted by the Company, it being understood that the Board will also review its short term incentive program in connection with its adoption of a dividend policy in order to incentivize and align the interests of the executives with the shareholders;

(e) “Equity Participation Term” means the period commencing on the Start Date and ending on: (i) the Termination Date in respect of the termination of your employment for any reason other than termination by the Company without just cause; and (ii) six months following the Termination Date in respect of the termination of your employment by the Company without just cause;

(f) “Going Public Transaction” means the completion of an initial or secondary public offering of Company Shares by the Existing Shareholders following the issuance of a receipt by the applicable securities regulator for a final prospectus in connection with such public offering; provided, however, that upon completion of the public offering, the shares of the Company (including such Company Shares) are posted for trading on a Recognized Exchange. For greater certainty, a Going Public Transaction for the purposes of this document shall not include a treasury issuance of the Company’s shares;

(g) “Liquidity Event” means the occurrence of any one or more of the following events or circumstances: (i) a Going Public Transaction; (ii) a Disposition; (iii) a Dividend Payment; and (iv)(A) the acquisition of all of the issued and outstanding common shares of the Company by a person (other than a Related Party) pursuant to a take-over, amalgamation, plan of arrangement or other business combination, or (B) the sale of all or substantially all of the assets of the Company to a person (other than a Related Party), that results in the Existing Shareholders receiving in exchange for their Company Shares, consideration consisting of entirely or a combination of (1) cash or (2) securities of the acquiring person (or an affiliate of such person); provided, however, that, unless determined otherwise by the Board in its sole discretion, a “Liquidity Event” shall not include a reverse take-over or similar transaction (regardless of whether such transaction is implemented pursuant to an arrangement, amalgamation or other structure), it being agreed by you and the Company that a reverse takeover is not generally the type of transaction contemplated to give rise to the realization of new value for the Company Shares as contemplated herein, and should not generally result in Equity Participation rights;

(h) “Principal Shareholder” means The Catalyst Capital Group Inc. and its affiliates;

(i) “Recognized Exchange” means the Toronto Stock Exchange, TSX Venture Exchange, London Stock Exchange, New York Stock Exchange, NYSE Amex Equities and the NASDAQ stock market or any successors thereto, and any other stock exchange that the Company and its financial advisor may agree, in writing, should constitute a recognized exchange for the purposes of this Agreement;

(j) “Related Party” means:

i. any person who is a holder of Company Shares as of the date of this Agreement and any shareholder, officer, director, partner or employee of such person;

ii. any employee or group of employees of the Company;

iii. a trustee or other fiduciary holding Company Shares under an employee benefit plan of the Company; or

iv. a corporation owned directly or indirectly by the holders of Company Shares in substantially the same proportion as their ownership of Company Shares;

(k) “Start Date” means the date you commence to actively perform services for the Company under your employment agreement; and

(l) “Termination Date” means the date on which your employment is terminated and you cease to actively perform services for the Company and, for greater certainty, shall not include any reasonable notice period following the termination of your employment, nor any period in respect of which you are eligible for or in receipt of severance pay.

All of your entitlements and rights to Equity Participation shall terminate at the end of the Equity Participation Term.

If you have any further questions or concerns, please do not hesitate to contact the undersigned.

Date:   10/3/16

Authorized Signature:

Title of Authorized Signatory: CEO

EX-10.13

Exhibit 10.13

SCHEDULE A

Equity Program: EMPLOYEE NAME

This document sets forth the terms of the equity program of Gateway Casinos & Entertainment Limited (“Gateway” or the “Company”) as they are applicable to you.

As an incentive for you to assist in creating value in the Company, subject to the terms hereof, if a Liquidity Event (as defined below) occurs during the Equity Participation Term (as defined below), you will be entitled to receive consideration (the “Equity Participation”) equal to 0.25% of the consideration received by the existing holders immediately prior to any Liquidity Event (the “Existing Shareholders”) of the Company Shares (as defined below) that are subject to such Liquidity Event on the following basis.

Equity Participation Formula

The Equity Participation (“EP”) will be calculated as follows:

Going Public Transaction: EP = X x 0.0025 (expressed as a number of Company Shares)

Disposition: EP = (Y1 x Y2) x 0.0025 (expressed as a number of Company Shares)*

Dividend Payment or Sale of Company: EP = (X x Z) x 0.0025 (expressed as a dollar value)

where:

X = the total number of Company Shares subject to a Liquidity Event;

Y1 = the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition;

Y2 = the total number of Company Shares outstanding (including any Company Shares not subject to the Disposition); and

Z = the consideration received (in whatever form) per Company Share pursuant to the Liquidity Event.

* Upon a Disposition resulting in the Principal Shareholder owning less than 10% of the Company Shares owned by the Principal Shareholder as at the date hereof, you will be entitled to receive the remaining portion of your total Equity Participation.

The Company shall pay the Equity Participation to you, less any required statutory deductions. The Equity Participation will only be settled in shares issued from treasury and will not be paid in cash.

Illustration of Calculations

For example:

(a) If the Company Shares sold by the Existing Shareholders pursuant to a Going Public Transaction represent 30% of the Company’s shares qualified for sale (and sold) pursuant to the prospectus filed in connection with the Going Public Transaction, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 0.25% of the Company Shares so sold, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Liquidity Event, of the appropriate number of common shares of Gateway.

Page 1

For illustration purposes only, if Gateway completes a Going Public Transaction where Company Shares sold by the Existing Shareholders equal 10,000,000 Company Shares:

EP	= X × 0.0025
	= 10,000,000 × 0.0025
	= 25,000 Company Shares

(b) If, after a Going Public Transaction, the Company Shares sold by the Principal Shareholder pursuant to a Disposition represent 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding, (i) the Equity Participation (expressed as a number of Company Shares) shall be equal to 0.25% of the product of (A) the percentage of the total number of Company Shares owned by the Principal Shareholder as at the date hereof which are subject to the Disposition, and (B) the total number of Company Shares outstanding, and (ii) the Equity Participation shall be satisfied through the delivery to you, promptly after the completion date of the Disposition, of the appropriate number of common shares or entitlements thereto. For greater certainty, the percentage of Company Shares owned by the selling Principal Shareholder, referenced immediately above in (b)(i)(A), shall not take into account any common shares of Gateway acquired by such Principal Shareholder after the date hereof.

For illustration purposes only, if, after a Going Public Transaction, the Principal Shareholder completes a secondary public offering of an aggregate of 10,000,000 of the 30,000,000 Company Shares owned by the Principal Shareholder and 40,000,000 Company Shares are outstanding:

EP	= (Y1 × Y2) × 0.0025
	= (33.3% × 40,000,000) × 0.0025
	= 33,333 Company Shares

(c) If the Company Shares being acquired by a person(s) that is not a Related Party(ies) pursuant to a Liquidity Event represent 100% of the then outstanding Company Shares, (i) the Equity Participation (expressed as a dollar value) will be equal to 0.25% of the consideration received for all of those Company Shares, and (ii) the Equity Participation shall be satisfied through the delivery to you, immediately prior to, and conditional on, the completion of the Liquidity Event, of the appropriate number of Company Shares.

For illustration purposes only, if 40,000,000 Company Shares are acquired by a person pursuant to a plan of arrangement for consideration of $10 per Company Share:

EP	= (X × Z) × 0.0025
	= (40,000,000 × $10) × 0.0025
	= $1,000,000 of Company Shares

Definitions

For purposes of the equity program, the following terms shall have the following meanings:

(a) “Board” means the board of directors of the Company;

Page 2

(b) “Company Shares” means, collectively, (i) the 39,356,817 common shares of the Company outstanding as of the date hereof, and (ii) such other shares issued from treasury by the Company that the Board determines, acting reasonably, should be considered to be “Company Shares” for the purposes of this Agreement; provided, however, that unless otherwise determined by the Board in its sole discretion, any common shares issued from treasury in connection with a Going Public Transaction shall not constitute “Company Shares” for the purposes of this document;

(c) “Disposition” means, after the completion a Going Public Transaction, any disposition, sale or transfer of Company Shares by the Principal Shareholder including, but not limited to, the sale of Company Shares through: (i) a secondary public offering; (ii) a private agreement; or (iii) the facilities of a Recognized Exchange or any other stock exchange on which the Company Shares may be listed from time to time;

(d) “Dividend Payment” means the declaration and payment of a dividend to the holders of the

Company Shares, other than the declaration and payment of a periodic dividend pursuant to a dividend policy adopted by the Company, it being understood that the Board will also review its short term incentive program in connection with its adoption of a dividend policy in order to incentivize and align the interests of the executives with the shareholders;

(e) “Equity Participation Term” means the period commencing on the Start Date and ending on: (i) the Termination Date in respect of the termination of your employment for any reason other than termination by the Company without just cause; and (ii) six months following the Termination Date in respect of the termination of your employment by the Company without just cause;

(f) “Going Public Transaction” means the completion of an initial or secondary public offering of Company Shares by the Existing Shareholders following the issuance of a receipt by the applicable securities regulator for a final prospectus in connection with such public offering; provided, however, that upon completion of the public offering, the shares of the Company (including such Company Shares) are posted for trading on a Recognized Exchange. For greater certainty, a Going Public Transaction for the purposes of this document shall not include a treasury issuance of the Company’s shares;

(g) “Liquidity Event” means the occurrence of any one or more of the following events or circumstances: (i) a Going Public Transaction; (ii) a Disposition; (iii) a Dividend Payment; and (iv)(A) the acquisition of all of the issued and outstanding common shares of the Company by a person (other than a Related Party) pursuant to a take-over, amalgamation, plan of arrangement or other business combination, or (B) the sale of all or substantially all of the assets of the Company to a person (other than a Related Party), that results in the Existing Shareholders receiving in exchange for their Company Shares, consideration consisting of entirely or a combination of (1) cash or (2) securities of the acquiring person (or an affiliate of such person); provided, however, that, unless determined otherwise by the Board in its sole discretion, a “Liquidity Event” shall not include a reverse take-over or similar transaction (regardless of whether such transaction is implemented pursuant to an arrangement, amalgamation or other structure), it being agreed by you and the Company that a reverse takeover is not generally the type of transaction contemplated to give rise to the realization of new value for the Company Shares as contemplated herein, and should not generally result in Equity Participation rights;

(h) “Principal Shareholder” means The Catalyst Capital Group Inc. and its affiliates;

Page 3

(i) “Recognized Exchange” means the Toronto Stock Exchange, TSX Venture Exchange, London Stock Exchange, New York Stock Exchange, NYSE Amex Equities and the NASDAQ stock market or any successors thereto, and any other stock exchange that the Company and its financial advisor may agree, in writing, should constitute a recognized exchange for the purposes of this Agreement;

(j) “Related Party” means:

i. any person who is a holder of Company Shares as of the date of this Agreement and any shareholder, officer, director, partner or employee of such person;

ii. any employee or group of employees of the Company;

iii. a trustee or other fiduciary holding Company Shares under an employee benefit plan of the Company; or

iv. a corporation owned directly or indirectly by the holders of Company Shares in substantially the same proportion as their ownership of Company Shares;

(k) “Start Date” means the date you commence to actively perform services for the Company under your employment agreement; and

(l) “Termination Date” means the date on which your employment is terminated and you cease to actively perform services for the Company and, for greater certainty, shall not include any reasonable notice period following the termination of your employment, nor any period in respect of which you are eligible for or in receipt of severance pay.

All of your entitlements and rights to Equity Participation shall terminate at the end of the Equity Participation Term.

If you have any further questions or concerns, please do not hesitate to contact the undersigned.

Date:                                              

Authorized Signature:                                              

Title of Authorized Signatory:                                                  

Page 4

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this registration statement on Amendment No. 1 to Form F-1 of Gateway Casinos & Entertainment Limited of our report dated December 18, 2018 relating to the consolidated financial statements of Gateway Casinos & Entertainment Limited, which appears in such registration statement. We also consent to the reference to us under the heading “Experts” in such registration statement.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia, Canada

December 18, 2018

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated December 18, 2018, with respect to the consolidated financial statements of Gateway Casinos & Entertainment Limited contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

December 18, 2018

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

We have issued our report dated December 18, 2018, with respect to the statement of assets acquired and liabilities assumed of the Central Gaming Bundle of Gateway Casinos & Entertainment Limited contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

December 18, 2018

EX-23.4

Exhibit 23.4

KPMG LLP

Bay Adelaide Centre

Suite 4600

333 Bay Street

Toronto, Ontario

M5H 2S5

Telephone (416) 777-8500

Fax (416) 777-8818

www.kpmg.ca

Consent of Independent Registered Public Accounting Firm

To the Board of Directors of Gateway Casinos & Entertainment Limited

We consent to the use of our reports included herein on our audits of the Combined Schedules of Revenue and Direct Expenses of Ontario Lottery and Gaming Corporation, for the:

—  North Gaming Bundle for the years ended March 31, 2017 and 2016;

—  Southwest Gaming Bundle for the years ended March 31, 2017 and 2016; and

—  Central Gaming Bundle for the years ended March 31, 2018 and 2017

and to the reference to our firm under the heading “Experts” in the registration statement.

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

December 18, 2018

KPMG LLP is a Canadian limited liability partnership and a member firms of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to

KPMG LLP.