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Gateway Casinos Entertainment Ltd., which owner Catalyst Capital Group Inc. has been attempting to sell or take public for years, is receiving interest from a number of American acquirers, sources say.

Catalyst is trying to negotiate a sale of Gateway to U.S. casino operators that either have a foothold in the Ontario market or want to move into Canada, according to sources familiar with the company’s strategy. Potential bidders include Hard Rock Cafe International Inc. and Caesars Entertainment Corp., which already have stakes in casinos in Ottawa and Windsor, respectively.

At the same time, Catalyst continues to work on the sale of a stake in Gateway through an initial public offering, in case a takeover fails to materialize. Catalyst and Gateway declined to comment Monday on their plans.

Catalyst, controlled by financier Newton Glassman, is attempting to take advantage of U.S. interest in Canadian expansion after Gateway acquired the operating rights to government-owned Ontario properties and development sites. Catalyst acquired Gateway in 2010 and first tried to sell-down its stake in the company in 2012 though an initial public offering, which was subsequently withdrawn.

Burnaby, B.C.-based Gateway operates nine Ontario casinos and struck a deal with the Ontario Lottery and Gaming Corp. in March for three more properties. The other major domestic gaming company is Richmond, B.C.-based Great Canadian Gaming Corp., which runs 21 casinos, including eight Ontario sites.

“The Canadian gaming industry and the international gaming industry has been a little surprised that most of the province [of Ontario] has gone to these two companies, given that they’re not major global gaming companies,” said lawyer Ilkim Hincer at Osler Hoskin & Harcourt LLP, who frequently advises casino companies.

He said that when the province began selling its casinos, “OLG wanted to create world-class gaming entertainment options for patrons, in a socially responsible way. The idea was that they would draw a lot of attention from these international gaming companies, like [Las Vegas Sands Corp.], MGM, Caesars.”

U.S. companies already run casinos in Ontario, but industry experts say several of these players are interested in rolling the dice for a larger share of what’s seen as a growing domestic market. Orlando-based Hard Rock acquired an Ottawa casino from OLG last May and recently announced plans for a $318-million expansion. Las Vegas-based Caesars is one of the world’s biggest casino operators, running 47 properties, including a Windsor site that first opened its doors 24 years ago.

Gateway could fetch $1.5-billion or more in a sale, based on the prices paid for casinos in recent takeovers. Along with its 25 existing sites, the company plans to build casinos in Collingwood, Kenora and North Bay, Ont.

In a recent letter to its investors, Catalyst said it hired investment banks Morgan Stanley and CIBC World Markets Inc. is leading a possible IPO, while Morgan is said to be simultaneously leading the search for a buyer for the company – an approach to selling that is known as a dual-track process.

Gateway expects to spend approximately $700-million over the next three years to renovate its existing properties and build new casinos, part of a strategy to lure more clients by building steak houses and sports bars alongside larger gaming areas.

To build new properties and bring more gamblers to existing sites, Gateway has forecast approximately $320-million of capital spending this year, $290-million in 2019 and $100-million in 2020 in presentations done for investment bankers last month. Maintenance capital spending at Gateway – the budget for keeping properties looking fresh and enticing – is approximately $30-million annually.

Gateway projects that as new casinos open, earnings before interest, taxes, depreciation and amortization (EBITDA) will increase by 88 per cent over the next four years to $275-million in 2020, from $146-million in 2017.

Catalyst has invested approximately $6-billion on behalf of backers such as pension plans, and owns several businesses that are doing poorly, including Callidus Capital Corp., a lender to distressed companies. Catalyst, founded in 2002, faces pressure from some investors to cash in on what’s perceived as a successful investment at Gateway.