SkyCity share price down after Adelaide casino closure
The six-day lockdown of South Australia announced by Premier Steven Marshall has triggered a drop in SkyCity Entertainment’s share price.
The Motley Fool reports that the casino and resorts operator’s shares ended the day 0.35 per cent on Wednesday at $2.88, compared to a 0.5 per cent gain by the S&P/ASX 200 index.
The share price came under pressure after the casino was forced to close its Adelaide facility from Thursday at midnight.
It is expected the venue will be able to reopen on November 24.
The company advised that the opening of its new $330 million expansion development, which includes a 120-room luxury hotel, will now be delayed until further notice.
The New Zealand operations of its business are unaffected and remain open.
SkyCity isn’t alone in having to rethink its reopening plans, with Crown Resorts told its new Sydney operation won’t be able to open in December as planned.
Crown blocked from December opening
The New South Wales Independent Liquor and Gaming Authority blocked the opening in response to Crown admitting at an inquiry that it was likely that money laundering had occurred through accounts it set up for its VIP players.
ILGA chairman Philip Crawford said: “Because when we talk about money laundering…we’re talking about potential drugs, child sexual exploitation, people trafficking and financial terrorism…you can see why we have concern.”
“In light of this, we did not consider it appropriate to determine the applications before the authority under the findings of the Bergin inquiry,” he said.
The findings of the inquiry are not expected to be released until February.
The business is now in a holding pattern until the inquiry hands down its findings.
There are three possibilities following this.
The casino will be allowed to open and operate as normal, which would be Crown’s preference.
The building was due to host a casino, 14 bars and restaurants and a luxury 350-room hotel, set to open on December 14.
Although the regulator barred Crown from operating the casino, that could change in February.
If Commissioner Patricia Bergin finds in their favour, the gaming floors in the 72-storey building would be free to open next autumn.
Another option that could be on the table is that Crown can salvage its gaming business, but cut ties with James Packer.
The former chairman resigned as director of Crown Resorts in 2018 and sold off a large portion of his shares but remains a major shareholder.
Counsel assisting Adam Bell SC urged the Commissioner to ban Mr Packer from associating with Crown.
Threatening emails sent by Mr Packer to an anonymous businessman were presented to the inquiry, which Mr Packer admitted were “shameful” and “disgraceful”.
Mr Packer also said he knew of at least four junket operators during his tenure reportedly linked to organised crime.
He said the junket operators were “good for business” but admitted he had no understanding of Crown’s oversight of them.
The third option would be the casino being blocked from opening altogether.
Mr Bell told the inquiry he believed Crown should not be allowed to open its casino.
“In summary, we submit that the evidence presented to this inquiry demonstrates that the licensee is not a suitable person to continue to give effect to the licence and that Crown Resorts is not a suitable person to be a close associate of the licensee,” he said.
If Crown’s 99-year licence is revoked, the casino element of the tower could be taken over by another operator or repurposed.