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Sky City profits down after lucky year for baccarat players

Thu, Aug 15, 8:19am by Staff Writer

Casino operator Sky City says it made $137 million in profit in 12 months to June 30, down 14.7 per cent from a year ago, following the sale of its Darwin property and as international gamblers got lucky on baccarat, The West reports.

The Kiwi casino and entertainment company said the high stakes gamblers who bet $14.1 billion at Sky City casinos had a good year, resulting a house “win rate” of just 1 per cent and costing Sky City $26.4 million in profit for the year.

Baccarat has a theoretical win rate or house advantage of 1.35 per cent – meaning that for every $100 bet, the casino retains $1.35.

In the nine years before last, Sky City’s win rate averaged 1.33 per cent and was 1.32 per cent in fiscal 2018 but has been below 1 per cent before.

“Bet size and frequency of play can vary and cause win rate to deviate from the theoretical over discrete periods,” the company said.

Sky City said that stripping away the impact of its unlucky win rate, the $188 million sale of its Darwin casino to Delaware North in April and the sale of a carpark in Auckland resulted in a normalised net profit after tax of $164.4 million, up 1.9 per cent.

Sky City kept its dividend unchanged; ASX shareholders will be paid 11.7647 NZ cents per share, unfranked.

Sky City said its international convention centre and five-star hotel project in Auckland was progressing more slowly than hoped, but its $330 million expansion of its Adelaide casino was on-time and on-budget, and expected to open in October 2020, in time for the T20 Cricket World Cup.

The development will include a 123-room luxury hotel, a wellness centre and more restaurants and bars.

SkyCity’s new bar and restaurant, the Guardsman, is set to open in the Adelaide Railway Station in November.

Sky City’s bid to replace tables with pokies in Hamilton meets opposition

Sky City Hamilton’s bid to swap three blackjack tables for 60 extra poker machines is now open to public submissions, after strong opposition from many in the region, including Hamilton City Council.

News of the plan prompted Mayor Andrew King to write to the New Zealand Gambling Commission, stressing that it should be open to public submission, and also pushing back the deadline for submissions to allow Hamilton City Council to submit.

At a full council meeting last Thursday, councillors were split on whether to immediately approve a draft submission opposing Sky City’s plan, or whether to hold for future information and then make a submission to the gambling commission.

Councillor Dave Macpherson said the submission with council covered it’s position adequately.

“Pokies in my opinion are the methamphetamine of gambling. They cause by far the most harm of any form of gambling in New Zealand,” Mr Macpherson said.

“They suck the most cash from any form of gambling in New Zealand,” he said.

Mr Macpherson went on to say that hardly any money is received on the blackjack tables and that the casino is becoming a giant pokes bar.

“I think 339 pokies is more than enough, I wouldn’t advocate reducing that, but I also say no more.”

Mr Macpherson’s position is one shared by fellow councillor James Casson, who said he had personally witnessed the harms of gambling first hand.

“I’ve been in too many homes myself as a police officer and witnessed the harms of addictive gambling. There is no food in the cupboards, kids go to school hungry,” Mr Casson said.

Councillor Garry Mallett disputed the views of the Mayor and some of his other fellow councillors, believing that problem gamblers are to blame.

“Sky City is a privately owned company, they have every right to proceed the legal development of profits,” Mr Mallett said.

“Every dollar that is spent at the casino is a dollar spent voluntarily, and unfortunately we can’t say the same about council. Rates are not collected voluntarily.”

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