New Zealand Casino Operator SkyCity Posts Major Loss for Latest Fiscal Year
Posted on: August 25, 2022, 09:14h.
Last updated on: August 29, 2022, 02:16h.
The latest financial report from SkyCity Entertainment Group shows that it’s going through a rough patch. The New Zealand casino operator’s financial health for its fiscal year 2022 saw a significant drop from the previous year.
The removal of COVID-19 restrictions has led most gaming hubs to see improvements, with the possible exception of Macau. The Chinese special administrative region (SAR) continues to battle the pandemic, which means its casinos are suffering as well.
However, SkyCity was still dealing with some COVID-19 restrictions during its fiscal year. As a result, it had to report a loss of NZ$33.6 million (US$20.88 million) for the period.
SkyCity Soft in Spite of NZ Gains
This past March, the New Zealand Department of Internal Affairs showed positive results in the country’s gaming sector. It reported that across its recently-concluded fiscal year, the gambling industry improved by 17% compared to the prior year. Gambling spend in the country was around NZ$2.63 billion (US$1.24 billion).
SkyCity, which has become a target for regulators, hasn’t enjoyed that same success. Its loss came at the expense of traffic, resulting in a 32.9% year-on-year drop in revenue. The final figure was NZ$639 million (US$397.14 million).
Much of that was due to the closure of the company’s flagship casino in Auckland. It shut down for 107 days in response to New Zealand’s health restrictions. As a result, the property saw revenue of NZ$330.6 million (US$205.36 million), a 32.3% drop.
In addition, SkyCity Hamilton had a 23.5% drop in its revenue, recording NZ$56.2 million (US$35 million). Its other New Zealand casino, SkyCity Queenstown, reported revenue of NZ$10.2 million (US$6.33 million), a loss of 16.9%.
SkyCity’s casino in Adelaide, Australia, also reported a dip of 6.3%. Its final tally was NZ$206.4 million (US$128.23 million).
There is good news, though. SkyCity’s business is improving, and revenue for its iGaming segment increased by 28.8%. The company reports that should everything stay on track, it could reach pre-COVID-19 revenue sometime during the current fiscal year.
Adelaide Casino Not Changing Hands
Although revenue at SkyCity’s casino in Australia dropped, the fact that it was only a single-digit loss is a positive sign. The company has injected AUD330 million (US$229.64 million) to upgrade the property, completing a number of renovations in 2020.
Recently, The Australian reported that SkyCity contacted an investment bank to broker a potential sale of the property. There was talk that The Blackstone Group, which recently acquired Crown Resorts, could be the buyer.
SkyCity denies the rumor. A spokesperson told the NZ Herald that any talk of a potential sale of the property is gossip and that the company is committed to its success.
Officials in New South Wales recently announced an inquiry into SkyCity to determine its suitability to “be a close associate of SkyCity Adelaide.” This followed reports of potential wrongdoing similar to what caused trouble for Crown and Star Entertainment.
In addition, the Australian Transaction Reports and Analysis Centre launched a probe into anti-money laundering concerns last year. That investigation is still in progress more than a year after it began, according to InDaily.
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