Page 62 - 2007_2008_Annual_Report

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1. General information:
Saskatchewan Indian Gaming Authority Inc. (SIGA) is incorporated under the
Non-profit Corporations
Act, 1995
of Saskatchewan as a Charitable Corporation. The Federation of Saskatchewan Indian Nations
(FSIN) owns the only issued Class A Membership in SIGA. Class B Memberships in SIGA were issued to
each of nine Tribal Councils in Saskatchewan that are recognized by the Saskatchewan Indian Gaming
Commission of the FSIN. The Government of Saskatchewan and the FSIN made a Framework Agreement
in 2002 that authorizes SIGA to operate casinos. SIGA operates five casinos on reserves in accordance with
the 2002 Casino Operating Agreement (Agreement) with Saskatchewan Liquor and Gaming Authority
(SLGA). SLGA is responsible for the overall conduct and management of the slot machines in those casinos
as required under
The Criminal Code of Canada
. Under the Agreement, SIGA is entitled to withhold the
casinos’ operating expenses, incurred in accordance with the operating policies and directives approved
by SLGA, from slot machine revenues. SIGA is required to deposit the remainder into a trust account for
SLGA in accordance with the procedures and formulas specified in the Agreement as outlined below.
Under the Agreement, SIGA is entitled to recover, in any year, any net loss from the operation of licensed
table games and ancillary operations from the net income earned from the operation of slot machines.
The Agreement provides for SIGA to use any net income from the operation of licensed table games for
charitable or religious objects or purposes. The Agreement expires on June 10, 2027.
The Agreement also provides for SIGA to remit to SLGA the net income from the operation of the slot
machines in the SIGA casinos. More specifically, net income from the operation of slot machines is
remitted to SLGA in accordance with a formula as defined in the Agreement. This formula provides for
SIGA to remit to SLGA, on a weekly basis, one-half of the amount by which actual slot machine gaming
revenue exceeds one-fifty-second of SIGA’s annual budget. Shortfalls in weekly slot machine gaming
revenue as compared to budget are recoverable against future remittances. The remaining one-half of
the amount determined above is remitted to SLGA within one-hundred and eighty days of the applicable
week. Pursuant to the Agreement, if, at the end of any operating year, SIGA has not been fully reimbursed
for amounts to which it is entitled for the operation of casinos, such amounts may be recovered from
future operations. SIGA is allowed to retain $5,000,000 as a capital reserve for the sole purpose of
acquiring capital assets.
Also, under the Agreement, SIGA has granted a first charge security interest on all its present and
after acquired assets to SLGA to secure contractual obligations of SIGA under the Agreement. However,
the Agreement requires that upon joint written request by SIGA and its lenders, SLGA shall postpone
such security in favour of the lenders who require a prior charge relating to funds lent to SIGA for the
financing of its operations carried out in accordance with the Agreement.
On June 11, 2002, the Government of Saskatchewan and the FSIN signed a new gaming Framework
Agreement which expires on June 10, 2027. The Government must distribute, in accordance with the
provisions of the Framework Agreement, the net income remitted to SLGA. Under the provisions of
the 2002 Framework Agreement, the Government of Saskatchewan, as represented by the Minister
responsible for SLGA, is entitled to recover its proportion of expenses that SLGA determines are not in
accordance with the approved operating policies and directives from the future amounts payable to
the First Nations Trust Fund.
S A S K A T C H E WA N I N D I A N G A M I N G A U T H O R I T Y I N C .
Notes to the Consolidated Financial Statements
Year ended March 31, 2008