Casino Operator SkyCity Reports 45% Year-On-Year Revenue Jump

Posted on: August 23, 2023, 06:50h. 

Last updated on: August 24, 2023, 10:37h.

New Zealand-based gaming operator SkyCity Entertainment is lifting COVID-19 travel restrictions. This has helped the company report a substantial revenue increase this year, but they could still face financial issues over pending fines in Australia.

The SkyCity Adelaide casino at night
The SkyCity Adelaide casino at night. SkyCity Entertainment has seen an improvement in revenue, but ongoing issues of alleged money laundering may cause it to slip. (Image: The Advertiser)

SkyCity reported a 44.9% year-on-year increase in revenue for the 12 months from July 2022 to June 2023. The final tally for the period was NZ$926.2 million (US$551 million).

EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped an impressive 71.1%, closing at NZ$926.2 million (US$551 million). SkyCity’s net profit was just NZ$8.0 million (US$4.8 million) after taxes. That’s still a lot better than the NZ$33.6 million (US$19.98 million) loss it reported in the prior period.

Much of that concerns an investigation by the Australian Transaction Reports and Analysis Center (AUSTRAC). The financial watchdog is looking into whether the company employed money-laundering tactics similar to those that landed Crown Resorts and Star Entertainment in trouble.

Revenue on the Rise

SkyCity reported a 51% year-on-year increase in its gaming revenue, taking in NZ$759.4 million (US$452 million). Electronic gaming machines accounted for 50% of the total and increased by 38% compared to pre-COVID-19 activity.

Table games earned NZ$231 million (US$137 million), which was 50% more than a year earlier. That figure is 11% lower than the pre-COVID-19 numbers. Nongaming revenue saw the biggest year-on-year increase, reaching a 59% jump to NZ$207.4 million (US$123 million).

SkyCity Auckland has consistently been the company’s primary earner, which didn’t change in the new period. Gaming revenue saw a year-on-year increase of 70.8% to NZ$444.9 million (US$265 million). Nongaming revenue skyrocketed 76.8% to NZ$123.9 million (US$73.7 million).

SkyCity waits to learn its fate in Australia over its SkyCity Adelaide casino, so the property is helping it earn extra revenue. Gaming revenue jumped 22.2% to AU$170.8 million (US$110 million), while nongaming revenue registered a 46.3% improvement to AU$65.4 million (US$42.0 million).

Investigation Ongoing

AUSTRAC began its deep dive into the operations at SkyCity Adelaide in South Australia (SA) last December. That has led the company to prepare for the worst from the watchdog’s civil case.

SkyCity believes it could pay as much as AU$45 million (US$29.2 million) provision to settle any eventual fine. That’s how much it has set aside in preparation. Each violation it faces carries a fine of between AU$18 million and AU$22.2 million (US$11.7 million and $14.4 million).

SkyCity already took a hit on the property when it included an AU$45.6 million (US$29.3 million) impairment writedown for its license in its latest financial report. It indicated that neither the AUSTRAC provision nor the impairment would impact its normalized earnings.

SA’s Office of the Liquor and Gambling Commissioner (OLGC) is also looking into the company. SkyCity could face additional penalties once that investigation wraps up.