The New Zealand-based owners of Adelaide’s Casino say they are one step closer to their $300 million redevelopment of the North Terrace complex after gaming laws passed State parliament yesterday.
The new gaming laws extend SkyCity Entertainment Group’s exclusive casino licence until 2035. They allow for the introduction of cashless gaming and ticket-in, ticket-out (TITO) technology, lower gaming tax rates for VIP gaming, an increase in slot machines by about a third to 1,500 and an increase in gaming tables to 200.
“This enabling legislation will allow SkyCity to conclude its agreement with the South Australian Government regarding the future regulatory, taxation and exclusivity framework facilitating the transformation of SkyCity’s Adelaide Casino into a truly world-class integrated entertainment complex,” SkyCity chief executive Nigel Morrison said in a statement to the stock exchange today.
Analysts say the Adelaide development is much more of a game-changer for the casino and hotel company than its politically contentious deal with New Zealand’s Government to build an Auckland convention centre in exchange for increased gaming concessions.
The investment in the site on the banks of the River Torrens includes a six-star hotel, restaurants and new gaming facilities. The State Government has called the development “the jewel in the crown” and touted its benefits to tourism and job creation.
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High-class entertainment precincts with luxury VIP facilities “are vital to attracting high-end Asian, particularly Chinese tourists”, Morrison said in the statement.
“Our development will help South Australia attract a greater share of this lucrative and growing market.”
Forsyth Barr analyst Jeremy Simpson said in a May report that SkyCity’s major opportunity in Adelaide was in the electronic gaming machine market, of which its casino has only an 8 per cent share of the city’s market for slot machines.
With current restrictions, Adelaide Casino’s daily win rate per slot machine is about $A180, compared to $A300 in Queensland, $A400 in NSW and Victoria, and $NZ360 ($A317) in Auckland, Simpson said in his report.
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“The Adelaide Casino under-performs many other casinos in Australia and New Zealand on a number of metrics, and what is proposed in Adelaide will level the playing field in a number of areas,” he said.
New Zealand shares of SkyCity last traded at $NZ4.20 and have gained 11 per cent this year on the NZ exchange while jumping from $3.00 to $3.65 on the Australian exchange in the last six months.
“SkyCity will invest over $A300 million to transform the Adelaide Casino into a world-class integrated entertainment complex which will include Adelaide’s first six-star boutique hotel, celebrity and signature restaurants, world-class VIP gaming experiences with ‘Horizon’ international suites with adjoining private gaming salons, all as part of the new entertainment precinct on the banks of the River Torrens,” Morrison’s statement said today.
“With Adelaide’s outstanding wineries and leading international golf courses, we are very confident that we will be able to package one of the best VIP experiences available in Australia.
“SkyCity’s investment will create much-needed jobs and economic growth for South Australia, and complement the redeveloped Adelaide Oval and the new and expanded Adelaide Convention Centre.
“We are pleased that the legislation has now been passed and that the casino reforms facilitating the redevelopment of the Adelaide Casino were strongly supported by both sides of Parliament.
“We now look forward to promptly finalising agreements with the Government and commencing this exciting redevelopment.”
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