NEW ZEALAND

SkyCity takes to the cloud

SkyCity Entertainment Group is forging ahead with plans to launch an online casino, even though offering internet gaming is prohibited under New Zealand law.

The country’s dominant land-based operator is getting around the ban by running its operations out of Malta. Although it’s not possible to offer services from home, many New Zealanders gamble using offshore sites, which is not illegal.

This results in a significant loss of revenue to the government and onshore gaming and wagering firms. According to reports, some $400 million a year is currently leaking offshore to unregulated overseas websites. SkyCity wants to reclaim some of the $180 million of that which goes to online casinos.

SkyCity’s Maltese subsidiary recently announced it would partner with Gaming Innovation Group Inc (GiG) to provide New Zealanders the ‘skycitycasino’ online gaming site. It’s expected to go live in mid-2019 and will be operated from Malta under a .com URL.

The service will be targeted at Kiwis and will be in Kiwi dollars.

SKYCITY Chief Executive Graeme Stephens said that while the skycitycasino online gaming site will be operated from offshore, it will ensure that its obligations under New Zealand General Sales Tax legislation are complied with.

Stephens went on to add that SKYCITY would be supportive of any future plans by the government to regulate the New Zealand online casino market, including introducing an appropriate licensing regime for operators and imposing taxes and mandatory host responsibility requirements.

“Online casinos are widely used by New Zealand customers and this trend will only continue. The world is rapidly moving online and our industry is no exception, so we have to ensure we remain relevant to changing consumer trends and preferences,’’ he says.

According to reports, some $400 million a year is currently leaking offshore to unregulated overseas websites.

“As an established land-based casino operator with significant investments in New Zealand and a track record of compliance in a highly regulated environment, we know a great deal about host responsibility and harm minimization. We believe the skycitycasino online gaming site offers customers an opportunity to enjoy playing in a safe, secure environment with a brand they know and trust and we will be striving to set the benchmark for any regulation in the future.”

Stephens says SKYCITY will be making a conservative entry to online gaming and will actively avoid the sales and marketing tactics adopted by some existing overseas operators.

“This means SKYCITY is not initially expecting to monetize materially from this initiative – it should be seen more as a strategic entry into a space that we believe has long-term relevance.”

About the company’s tie up with GiG, Stephens said he believes “GiG provides the right balance of experience, coupled with a new software platform relevant to the future and access to high-quality content for online gaming customers. GiG has experience in partnering with land-based casinos through their relationship with Hard Rock International and is licensedin some of the world’s most regulated gaming markets, including the United Kingdom and the United States.’’

As part of the agreement, GiG will provide a full-suite online casino solution which includes a technical platform, gaming content, managed services and front-end development. The arrangements will be structured primarily as a revenue share arrangement, with the majority of operating costs variable or directly linked to revenue generation. The SKYCITY subsidiary in Malta will assume a modest level of on-going fixed costs, such as staff, technical support and regulatory and compliance. If SKYCITY ultimately becomes a licensed operator in a regulated New Zealand online casino market, the agreement with GiG allows for SKYCITY to assume the B2C (i.e. customer facing) components of the business in the same way as it does for its current land-based activities.

The skycitycasino online gaming business will be managed by an Online Director (Steve Salmon) based in Europe. Mr Salmon has a wealth of experience in online casino gaming and wagering, including senior leadership roles with industry leaders such as Rank Group plc, a leading multi-channel gaming operator in the United Kingdom, and High5 Games, a leading content creator for the land-based, online and social gaming markets.

Although SKYCITY is not anticipating meaningful incremental earnings from its online business pre-regulation of the online casino market in New Zealand, Stephens felt that “consistent with our group strategy, longer-term we see an exciting opportunity to grow and diversify our earnings through provision of a multichannel offering to gaming customers both online and at our land-based casinos in New Zealand.”

NZ cuts betting levy to kick start racing industry

The New Zealand government said it’s phasing out its current betting levy over the next three years in an effort to revitalise the country’s racing industry.

The funds will be redirected to the racing and sports sectors, instead of going to the Crown. New Zealand raised NZ$13.9 million in 2018, that’s about 4 percent of the profit generated by the industry.

“This change will provide an important source of revenue for industry investment decisions,” Racing Minister Winston Peters said announcing the decision.

The funds will be redistributed to the racing Codes and Sport New Zealand, with a proportion set aside to support the reduction of gambling harm.

“The racing industry plays a vital role in the New Zealand economy, having contributed NZ$1.6bn to the economy in 2016/17 whilst employing tens of thousands of New Zealanders, many of them young, and boosting New Zealand’s exports.”

SKYCITY battles regulatory red tape in Queenstown

SKYCITY Ltd has now obtained permission to buy land in Queenstown for a new luxury hotel complex, but is still battling with regulatory issues over its casino licenses.

SKYCITY owns both the casino licenses in Queenstown. It has recently renewed its lease on one set of premises in the downtown area for a further three years, but under the law may not transfer the second license to its planned new luxury property on a 1.01-hectare parcel of land.

The New Zealand government has also imposed a freeze on the granting of new casino licenses.

This means that if the project proceeds the hotel would have to operate without a casino license, and the company would need to offer various incentives to attract high rollers to its Queenstown casinos.