AUSTRALASIA 42
New zealand
Red tape tangles expansion plans SkyCity Entertainment is grappling with capacity issues, as licensing regulations in New Zealand make expansion of its properties difficult.
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he company this week reported its annual results, posting an almost 15 percent drop in reported profit and a slight increase in normalised profit. Management also presented investors with an update on the status of its projects and future plans. New Zealand’s only listed operator has three properties in its home country and one in Australia. The company made a significant comment in relation to its position in Queenstown where it has recently acquired 1.01 hectares of prime development land on the edge of town. SkyCity currently owns both casino licences in the town, but neither of the downtown sites is in premises the company regards as satisfactory and expansion on either site would be very difficult; hence the attraction of a whole new site.
NZ pushes gaming industry development
REVENUE BY BUSINESS Auckland
+3.8%
Hamilton
+1.9%
Queenstown/ other Adelaide (A$)
+2.2% +0.2% (Source: SkyCity)
SkyCity workers strike for improved pay Workers at SkyCity Casino in New Zealand have been taking industrial action to improve their weekend and night-time pay rates. Unite union’s national secretary, Gerard Hehir said the workers were seeking better pay rates for weekend and night work. The workers staged strikes on two consecutive weekends in late September to push their concerns. There are around 2000 employees at Skycity, and around 900 union members, most of which are front of house staff.
Asia Gaming Briefings | October 2019
However, there is a significant legal difficulty. SkyCity cannot get a new casino licence because there is a government-imposed freeze on the granting of licences and the current law does not allow licences to be transferred from one set of premises to another even within the same city. This means that the only way SkyCity can operate its proposed new hotel with a casino is to persuade the government to amend the law to allow a transfer to take place. CEO Graeme Stephens explained that the company will do a feasibility study of the project with the assumption built in that the hotel has a casino licence. And if the project is attractive, then it will seek regulatory approval to make this possible. The company would talk to industry regulator, the Gambling Commission and the Minister of Internal Affairs about getting amending legislation put through Parliament.
New Zealand’s fledgling gaming industry is pushing a plan for government assistance to help it become a billion dollar export earner in an industry currently worth $258 billion. A report on the state of the industry has won initial support from government ministers who like the growth model and the goals the industry is promoting. The report prepared by the New Zealand Game Developers Association wants to expand exports from $143 million in 2018 to a billion dollars by 2024. The gaming industry is seeking to copy the success of New Zealand’s film and music industries which have government and industry partnerships to steer growth in the industry and development funds for research and innovation. “The past six years have seen the (New Zealand gaming) sector grow by 39 percent annually to become a $143 million industry, with a number of companies already shining,” Economic Development Minister Phil Twyford said.
If amendments were not possible, SkyCity would then look again at whether the hotel development was a sound investment in its own right. All of this will take time, perhaps several years. The company also has another regulatory issue on its hands, but a solution looks more immediately achievable. In Hamilton – a 170 000 person city south of Auckland in a prosperous farming area – the company’s casino is small and the present site is capacity constrained although SkyCity does own more land adjacent to its current casino. Stephens said demand for gaming machines was greater than for gaming tables and particularly when the casino was busiest on Friday and Saturday nights it was unable to meet demand. Gamblers were being turned away, and he thought they simply went to clubs and pubs or gambled online.
