The British Columbia government’s investigation into the conflict of interest violation of former British Columbia Lottery Corp. (BCLC) CEO Michael Graydon, has developed into a major issue that could jeopardize Paragon Gaming’s Edgewater Casino project.
David Eby, a member of the BC Legislative Assembly and designated spokesperson of the New Democrat Official Opposition had put forward a request for the Gaming Policy and Enforcement Branch (GPEB) to investigate into Mr. Graydon’s conduct in relation to Paragon Gaming’s Edgewater Casino project. However, Mr. Eby learned that the GPEB is currently conducting investigations on Paragon Gaming and its PV Hospitality affiliate, as part of its vetting procedures.
Nonetheless, he was informed that the examination coverage was expanded, in light of the provincial government’s findings that the former BCLC Chief was in conflict of interest when he accepted the PV Hospitality position offered by Paragon Gaming. As President of PV Hospitality, it would be his job to oversee the operations of the future Edgewater Casino in Vancouver.
The BC Finance Ministry, which oversees the GPEB, explained that the investigations being conducted by the gaming regulator is an independent process carried out in accordance with the authority granted by Canada’s Gaming Control Act. Since it is still ongoing and usually takes several months to complete, it is therefore inappropriate to give further comments related to the investigation.
David Eby, who is also the official opposition critic for the province’s policies on housing, liquor and tourism, the liquor distribution branch and government-owned Destination B.C., BC Lottery Corp. and B.C. Pavilion, has publicly voiced his opinion. He opines that if Graydon and Paragon are proven as complicit partners, the former head of the BCLC will be deemed as unqualified to work in another gaming company in the province.
Mr. Eby also hopes that the GPEB investigation is being carried out properly, to make sure that Paragon Gaming will not be permitted to build the Edgewater Casino at the BC Place once proven as unsuitable to operate a casino. He pointed out that the Las Vegas-based company has an unsound record of accomplishments as far as developing casinos are concerned, citing as example the Eagle River Casino of the Alexis First Nation in the province of Alberta.
The Eagle River Casino, which was a joint project with Paragon Gaming, underwent bankruptcy proceedings in January of this year, after losing more than a million dollars each day. According to Mr. Eby, GPEB’s investigation about Paragon Gaming’s involvement in the casino’s insolvency affairs is logical and appropriate, because the matter raises question about the company’s own solvency and capability to manage a very volatile business. Eagle River Casino declared tens of millions in unsettled obligation when it filed for bankruptcy proceeding and subsequently placed under receivership.
The Edgewater Casino was also in a state of insolvency when Paragon Gaming acquired it in 2006. After which, the latter launched an initiative aimed at transferring the casino to a property owned by the BC Pavilion Corporation and of building a 72,000-square foot casino gaming floor, 550 guest rooms, and spaces for restaurants, boutiques and retail outlets.