Fri, Jul 19, 3:38am by Kevin Pitstock
SkyCity Entertainment Group has been given permission by New Zealand’s Commerce Commission to buy the Wharf Casino in Queenstown, New Zealand for NZ $5 million. In the same transaction, SkyCity was given permission to build an AU $384 million convention centre in Auckland.
Meanwhile, the Commerce Commission agreed to allow the group to buy Lasseters Otago Casino. Due to the purchase, six gaming tables and 74 gaming machines will be added to Skycity’s operations in the city.
Kiwi officials said the purchase would not affect competition in the area, despite the fact both of Queenstown’s casinos are owned by the same financial entity now. Mark Berry, chairman of the Commerce Commission, said the high level of regulation and other legal constraints placed on SkyCity make it unlikely to exploits its newfound monopoly on gaming.
In many ways, this announcement signals the reverse of government policies and gaming trends in Australia. In the Australian market, duopolies are beginning to become more common and monopolistic gambling operations are rarer. Where Aussie gaming becomes more fragmented, New Zealander gaming is becoming more consolidated.
The recent decision by the Commerce Commission simply finalizes what was already known by many in the country. The sale of the Queenstown Casino happened in December 2012, when SkyCity gained 100% control after a 40% buyout of Skyline Enterprises. The recent approval sets that decision in stone.
The convention centre in Auckland has a more complicated ownership structure. A Maori group institution called Ngai Tahu Property and the Wellington-based investment bank Morrison & Co are two other key investors in the Auckland convention centre.
SkyCity Entertainment Group is a New Zealand corporation which operates casinos and gaming businesses in New Zealand and Australia. The company is sold on the New Zealand and the Australia stock exchanges. It is one of four major gaming entities operating in Australasia, but SkyCity is the smallest of the four.
The gaming group was established in 1996. Its first property was the Skycity Auckland Complex. The company’s CEO is Nigel Morrison and its CFO is Alistair Ryan. Net profits per year are around NZ $100 million. The company’s casinos collect many of their profits from high stakes gamblers from China and other East Asian countries.
The company has casinos in Australian cities like Adelaide and Darwin. In New Zealand, Skycity’s chief gambling establishments are found in Auckland, Christchurch, Hamilton, and Queenstown. The combination of scenic vacation spots and good casino gambling draws many tourists and gamblers from the Asian mainland.
One should not confuse the company with Sky City One, a famous Chinese skyscraper in the city of Changsha, Hunan. Sky City was built by the Chinese construction company, Broad Sustainable Building, but is not affiliated with that company in any way.
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