Skycity Entertainment Group

Last updated

SkyCity Entertainment Group Limited
Type Public
NZX: SKC
ASX:  SKC
Industry Gambling & hospitality
Founded1996;25 years ago (1996)
Headquarters Auckland, New Zealand
Key people
Michael Ahearne (CEO)
Julie Amey (CFO)
Products Casinos & hotels
Website skycityentertainmentgroup.com
www.skycitycasino.com

SkyCity Entertainment Group, also known as simply SkyCity, is a gambling and entertainment company based in Auckland, New Zealand. It owns and operates five casino properties in New Zealand and Australia, which include a variety of restaurants and bars, three luxury hotels, [1] convention centre, [2] [3] and Auckland's Sky Tower. [4]

Contents

The group was established in 1996 as the owner of the SkyCity Auckland complex. In 1998 it took over operations of the complex from Harrah's Entertainment. [5]

The company's shares are traded on both the Australian and New Zealand Stock Exchanges.

History

Since opening its original Auckland casino on 2 February 1996, SkyCity has expanded its operations to several New Zealand and Australian cities.

In June 2000, it bought the Adelaide Casino. [6] It added another casino to its portfolio when it opened SkyCity Queenstown in the alpine resort of Queenstown.

In June 2004, the group acquired a 41% stake in the Christchurch Casino when it bought Aspinal Limited. Although the deal was opposed by Skyline Enterprises, the other owner of 41% stake, it was approved by the Casino Control Authority and the Commerce Commission. [7] [8] However, in 2012 SkyCity sold its shares to Skyline for $80 million and bought Skyline's 40% stake in Queenstown Casino for $5 million. [9]

In July 2004 it bought the Darwin Casino and Hotel from MGM Mirage and rebranded it as SkyCity Darwin. In November 2018, SkyCity sold the property to American company Delaware North for $188 million. [10]

In 2001, SkyCity bought a half share in cinema operator Force Corporation for $19.4 million, and rebranded it as Skycity Leisure. [11] In February 2010, the group sold its cinema operating business to Australian firm Amalgamated Holdings Limited (now Event Hospitality and Entertainment). [12]

Evan Davies was the founding Chief Executive, before leaving the group in 2008. During Evan’s 11 years, the company grew from a single site to having business operations throughout New Zealand, South Australia and the Northern Territory. In April 2016, longtime CEO Nigel Morrison stepped down as Managing Director and Chief Executive. [13] Graeme Stephens was appointed as SkyCity's new Chief Executive in May 2017 - December 2020 [14] with Chief Operating Officer Michael Ahearne stepping in as the new CEO until present.

In October 2017, the group acquired NPT Limited's interest in AA Centre in Auckland for NZ$47 million. [15]

On 21 May 2019, SkyCity announced a long-term agreement with Malta-based Gaming Innovation Group (GiG) to supply technology for SkyCity's new real-money online casino. The site, which will operate using GiG's Malta Gaming Authority online gambling license, plans to launch in the third quarter of 2019. [16]

In June 2019, SkyCity obtained governmental permission to buy a 1.01-hectare parcel of land in Queenstown to develop a new luxury hotel. [17] [18]

SkyCity casinos often depend to a large degree on several hundred high-stakes gamblers, often from East Asia, who may gamble hundreds of thousands of dollars in one visit to a casino. [19] Reported net profit after tax (NPAT) was $128.7 million, with the Group seeing revenue exceeding $1 billion for the first time in the company's history [ when? ].

As a result of the COVID-19 pandemic, SkyCity announced 200 job losses in New Zealand on 3 April 2020, [20] and a further 700 redundancies a month later, on 11 May. [21] In 2020, Skycity planned to raise new equity of $230 million to strengthen its balance sheet as part of its pandemic recovery plan. [22]

Properties

The SkyCity group owns five casinos in Australia and New Zealand: SkyCity Auckland, SkyCity Hamilton, SkyCity Queenstown, SkyCity Wharf Casino, and SkyCity Adelaide.

Adelaide

Adelaide Casino was bought by SkyCity Entertainment Group in June 2000. Back then it had 767 gambling machines and 72 table games. [23] Currently it has 990 gambling machines and 90 gambling tables. It has the only table gambling license issued out by the South Australian Government, giving it a monopoly over the gambling business in the state. [24] In 2011 SkyCity financed a $339 million expansion project to make the casino closer towards the city's riverfront. [25]

Auckland

SkyCity Auckland is New Zealand's largest casino. Located in Central Auckland, it provides table and slot machine gambling, with 1647 gambling machines and 110 gambling tables. The facility includes the 328-metre (1,076 ft) Sky Tower, two hotels, convention centre, a 700-seat theatre, and more than 20 restaurants and bars with regular live bands, DJs and other entertainment. It opened on 2 February 1996.

SkyCity Hotel, Auckland is a four-star casino hotel. It is one of New Zealand's busiest hotels and is located inside the main Auckland complex. It serves mainly families, business people and casino customers. It offers 323 rooms, which were refurbished in 2013. [26]

SkyCity Grand Hotel is a luxury five-star hotel and was officially opened by Prime Minister Helen Clark in April 2005. It is not located inside the main complex but is adjacent and is connected by a sky bridge. It serves VIPs, business people and high stake gamblers who play at the casino. The Grand features 21 floors and 316 rooms. The rooms comprise The Grand Suite, 8 Self Contained Suites, 11 King Suites and 296 rooms. Facilities and services include 24-hour room service and reception, a swimming pool, fitness center with personal trainers, sauna, health spa, baby sitting and a hotel doctor. [27]

In 2013, through a deal with the Government, SkyCity pledged to build a new convention centre catering for up to 3500 guests and costing $402 million, in exchange, it will get more gambling concessions. [28] However, the construction was delayed due to cost increase, and on 22 October 2019 the building caught fire while still under construction. [29] [30]

Hamilton

SkyCity Hamilton is a casino in Hamilton, New Zealand, that opened in September 2002. [31] The casino is authorized to offer a maximum of 339 gambling machines and 23 tables. [32] It has a restaurant and a bar, with live music and other performers on Friday and Saturday nights. It is part of the Riverside Centre on the Waikato River, which includes bars, restaurants and ten-pin bowling all operated by SkyCity Hamilton.

Queenstown

Queenstown is New Zealand's only region that hosts two casinos, both are owned and operated by SkyCity. The two casinos are SkyCity Queenstown, opened in December 2000, with 86 gambling machines and 12 gambling tables, [33] and the nearby SkyCity Wharf Casino, situated in the Steamer Wharf complex, with 74 gambling machines and 6 gambling tables. [34] [35] In 2018, the two relatively small casinos contributed only 1% of the company's nearly $1 billion turnover. [36]

Former properties

Darwin

SkyCity Darwin, previously known as the MGM Grand Darwin, was the only casino in Darwin, the capital of the Northern Territory, Australia. SkyCity bought the casino, including a 5 star hotel, from MGM Mirage on 23 June 2004 for US$140 million. SkyCity Darwin housed 700 gambling machines and 40 gambling tables.

SkyCity sold the Darwin property to American company Delaware North in November 2018 for $188 million and it was subsequently renamed as Mindil Beach Casino & Resort. [10] [37]

Controversy

Alongside other eligible New Zealand businesses, SkyCity Entertainment Group received significant financial support in the form of wage subsidies from the New Zealand government as part of a widespread economic stimulus programme following the COVID-19 outbreak. After initially receiving NZ $21.6 million in taxpayer-funded assistance, the company received an additional tranche of $9.4 million from the central government in July 2020. In all, SkyCity Entertainment Group received over $30 million from New Zealand taxpayers in 2020. [38] Despite then subsequently posting a profit of over NZ $66.3 million, SkyCity steadfastly refused to repay the funds in spite of its bumper profits, [39] a move which was widely condemned across the New Zealand political spectrum [40] and identified as an example of the "waste" and "fraud" treasury had earlier warned of. [39]

On first week of June, 2021, Australian financial watchdog AUSTRAC intimated SkyCity Entertainment Group along with Crown Resorts and Star Entertainment Group about 'potentially serious breaches' of anti-money laundering regulations at their casinos in Adelaide, Perth and Sydney respectively. [41] [42]

See also

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References

  1. ↑ "SkyCity Hotel - 4 Star Luxury Hotel". SKYCITY. Retrieved 7 June 2021.
  2. ↑ "SKYCITY Auckland Convention Centre nominee profile on WorldTravelAwards.com". World Travel Awards. Retrieved 7 June 2021.
  3. ↑ "Home Page". NZICC - New Zealand International Convention Centre | Auckland. Retrieved 7 June 2021.
  4. ↑ "SkyCity Casino NZ".
  5. ↑ "US gambling giant linked to SkyCity". The Dominion Post . 26 September 2007.
  6. ↑ "SkyCity share price soars on takeover approach". abc.net.au . 21 September 2007.
  7. ↑ "SkyCity Completes Casino Deal". au.news.yahoo.com. 28 June 2004. Archived from the original on 5 August 2004.
  8. ↑ "Sky City pays $93.8m for Aspinall stake in Christchurch Casino". The New Zealand Herald . 5 April 2004. Archived from the original on 18 June 2020.
  9. ↑ "SkyCity sells out of Chch - takes over Queenstown". The New Zealand Herald. 20 December 2012. Archived from the original on 26 December 2012.
  10. 1 2 "Darwin's SkyCity Casino sold to America's Delaware North". abc.net.au . 8 November 2018. Archived from the original on 8 November 2018.
  11. ↑ "Davies to head Force Corporation". The New Zealand Herald. 4 April 2001.
  12. ↑ "Australian firm buys SkyCity cinemas". stuff.co.nz . 25 November 2009.
  13. ↑ "SkyCity chief executive Nigel Morrison resigns". nbr.co.nz. 7 April 2016. Archived from the original on 19 April 2016.
  14. ↑ "SKYCITY welcomes new CEO Graeme Stephens with traditional Maori cultural ceremony". SkyCity Entertainment Group. 3 May 2017.
  15. ↑ officialhoistory
  16. ↑ Rowe, Don (22 May 2019). "SkyCity ignores government, signs deal to open online casino". The Spinoff. Archived from the original on 31 May 2019. Retrieved 22 May 2019.
  17. ↑ "SkyCity granted approval to buy land for new five-star Queenstown hotel". asgam.com. 7 June 2019. Archived from the original on 18 June 2020.
  18. ↑ "SkyCity's Queenstown problem unresolved despite land purchase". Asia Gaming Brief. 13 June 2019. Archived from the original on 19 June 2020.
  19. ↑ Hembry, Owen (1 March 2007). "SkyCity hit as luck changes for VIPs". The New Zealand Herald. Archived from the original on 29 June 2011. Retrieved 12 November 2011.
  20. ↑ "Covid 19 coronavirus: SkyCity axes 200 jobs". The New Zealand Herald . 3 April 2020. Archived from the original on 21 April 2020. Retrieved 11 May 2020.
  21. ↑ "Covid 19 Coronavirus: SkyCity plans to shed another 700 staff". The New Zealand Herald. 11 May 2020. Archived from the original on 29 May 2020. Retrieved 11 May 2020.
  22. ↑ "SkyCity bites the bullet, proceeds with $230m capital raise". The New Zealand Herald . 16 June 2020. Retrieved 13 April 2021.
  23. ↑ "Sky City Buys Adelaide Casino". scoop.co.nz. 23 February 2000. Archived from the original on 17 July 2020.
  24. ↑ The Office of the Liquor and Gambling Commissioner. "Casino Frequently Asked questions". olgc.sa.gov.au. Archived from the original on 17 February 2011. Retrieved 16 July 2010.
  25. ↑ "SkyCity spend up for Adelaide". The New Zealand Herald. 2 April 2011. Archived from the original on 8 January 2014.
  26. ↑ "SkyCity Hotel official site".
  27. ↑ "SkyCity Grand Hotel official site".
  28. ↑ "Govt confirms $402M convention centre deal". 3 News NZ. 13 May 2013. Archived from the original on 10 November 2013.
  29. ↑ "Auckland's SkyCity Convention Centre fire: Firefighter in serious condition as building goes up in flames". Stuff. 22 October 2019. Archived from the original on 10 December 2019.
  30. ↑ "SkyCity convention centre set to create 800 jobs - Joyce". TVNZ. 13 May 2013.
  31. ↑ "SKYCITY ENTERTAINMENT GROUP LIMITED - Interim Result Half Year Ended 31 December 2003" (PDF). Skycity Entertainment Group.
  32. ↑ "Gambling Inspectors, Christmas at casinos". Department of Internal Affairs . 21 December 2004.
  33. ↑ "Our Business". SkyCity Entertainment Group. Retrieved 13 April 2019.
  34. ↑ "SkyCity buys Wharf Casino". Otago Daily Times . 20 May 2013. Archived from the original on 15 June 2020.
  35. ↑ "SkyCity to buy Queenstown casino from Lasseters". Asia Gaming Brief. 24 May 2013. Archived from the original on 15 June 2020.
  36. ↑ "SkyCity seeks Overseas Investment consent to buy Queenstown hotel land". stuff.co.nz. 1 May 2019. Archived from the original on 5 May 2019.
  37. ↑ "Blast from the past: Darwin Skycity Casino's new name revealed" . NT News. 27 March 2019.
  38. ↑ Gibson, Anne (22 July 2020). "SkyCity Entertainment Group gets wage subsidy extension: extra $9.4m for 2219 staff". The New Zealand Herald . Retrieved 1 December 2020.
  39. 1 2 Fleming, Zac (28 November 2020). "Finance Minister Grant Robertson was warned removing wage subsidy cap risked 'waste, fraud'". Newshub. Retrieved 1 December 2020.
  40. ↑ "'Morally wrong' – Party leaders at loggerheads over abuse of Covid-19 wage subsidy scheme by companies". One News. TVNZ. 30 September 2020. Retrieved 1 December 2020.
  41. ↑ "Crown, The Star and SkyCity all hit with money laundering investigations". Travel Weekly. Retrieved 7 June 2021.
  42. ↑ "Australian casino operators notified of potential serious breaches by Australia's Anti-Money Laundering watchdog". IAG. 6 June 2021. Retrieved 7 June 2021.
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