Sky City Rises on Australian Casino Contracts: Wellington Mover
SkyCity Entertainment Group Ltd. (SKC), New Zealand’s largest casino operator, rose the most in nine months after agreeing regulatory concessions at its South Australia site that will lead to a major redevelopment.
The state government will extend Adelaide Casino’s exclusivity for table games and premium gaming for 20 years to 2035, Auckland-based SkyCity said in a statement. The deal, subject to regulatory approval, allows the company to spend more than $A300 million ($316 million) at the site, it said. The shares rose 3.6 percent, heading for the biggest move since March 15.
SkyCity wants to boost revenues in Adelaide after saying in August that second-half profits were curbed by falling revenues from its South Australian unit amid soft demand and exchange- rate effects. The company plans to build a 6-star hotel, restaurants and new carpark facilities, it said.
The new agreement “levels the playing field with our regional competitors,” Chief Executive Officer Nigel Morrison said in the statement.
Under the agreement, SkyCity will add more gaming machines and tables, and will also pay more tax on gaming earnings. The tax rate on machines will rise to as much as 41 percent from 34.4 percent, it said.
SkyCity shares rose 13 cents to NZ$3.75 at 12:50 p.m. in Wellington.
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