Skycity eyes online casino options, posts huge jump in profit, revenue
Casino operator Skycity Entertainment Group is evaluating whether it could launch an online casino to compete with overseasbased competitors.
Chief executive Graeme Stephens said the most likely route to launch would be to partner with an offshore-based online casino operator.
The news, revealed in Skycity’s profit announcement to the sharemarket yesterday, has been condemned by the Problem Gambling Foundation.
‘‘We would not want that to happen at all because online gambling creates an immense amount of risk,’’ the foundation’s spokeswoman, Andree Froude, said.
Already Kiwis could gamble online with TAB, and also play Lotto online, she said.
Stephens said New Zealanders were already gambling at online casinos run from overseas.
‘‘A lot of offshore-based casino operators are making their online offerings available to Kiwis, including our own customers,’’ he said.
‘‘The future of the world, not just our industry, but everywhere is going online. We are evaluating our options in that space, and if we can make something work, we would like to.’’
There are two big hurdles for Skycity to launch an online casino. The first is surmountable.
Stephens said the company lacked the internal competence to do it, which means any launch would probably be in partnership with an overseas operator.
‘‘You couldn’t have a secondrate offering online and hope to attract business,’’ he said.
The second hurdle is a legal one. A law change would be needed to allow an onshore company to set up an online casino.
‘‘It’s not regulated in New Zealand. Therefore there’s no opportunity to create a business in New Zealand today,’’ Stephens said.
Skycity yesterday posted a huge profit jump. Its after-tax profit in the 12 months to the end of June was $169.5 million, up from $44.9m in the previous year.
The company said key reasons for the improvement were continued growth in Auckland revenues, the improved performance of its Adelaide casino, and effective cost management.
Total revenue excluding GST was $996.8m, up 7.4 per cent on the previous year.
Skycity’s performance continues to be a tale of two countries, with large revenue rises on this side of the Tasman and weak performance in Australia.
Auckland dominates the company, providing $584.7m of its total revenue. Revenue was up in Auckland (up 3.2 per cent), Hamilton (up 2.1 per cent), and Queenstown (up 7.2 per cent).
But overall Australian revenue fell by 0.2 per cent.
A fully imputed final dividend of 10 cents per share will be paid in September.