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SkyCity shares up after online casino announcement

Fri, May 24, 8:46am by Staff Writer

SkyCity Entertainment Group’s share price has edged higher following the news that they will open an online sports book later this year.

At the time of writing, the casino and resorts operator’s shares are up slightly at $3.62, according to The Motley Fool.

SkyCity’s Maltese subsidiary, SkyCity Malta Limited will partner with international iGaming company Gaming Innovation Group to provide New Zealanders with an online casino gaming platform.

According to the release, the proposed ‘skycitycasino’ online gaming site is expected to be launched in the middle of the year and operated from Malta under a .com URL.

The company is operating the online gaming site from the small European island because only government-owned Lotto and the TAB are permitted to offer online gaming from within New Zealand under current law.

However, many New Zealanders freely participate in online casinos provided by offshore operators.

SkyCity chief executive Graeme Stephens believes the skycitycasino online gaming site provides New Zealanders a brand name they can trust and advised that it will offer best in class host responsibility.

Although the online casino will be operated from offshore, it will ensure that its obligations under New Zealand GST legislation are complied with.

The existing online casino market in New Zealand is well established and offshore operators are estimated to be generating revenue of NZ$160 million per year.

Mr Stephens said: “online casinos are widely used by New Zealand customers and this trend will only continue. The world is rapidly moving online and our industry is no exception, so we have to ensure we remain relevant to changing consumer trends and preferences.”

He added: “as an established land-based casino operator with significant investments in New Zealand and a track record of compliance in a highly regulated environment, we know a great deal about host responsibility and harm minimisation.”

“We believe the skycitycasino online gaming site offers customers an opportunity to enjoy playing in a safe, secure environment with a brand they know and trust and we will be striving to set the benchmark for any regulation in the future.”

However, the company will be making a conservative entry to online gaming and intends to avoid the sales and marketing tactics adopted by some existing overseas operators.

In light of this, Mr Stephens advised that SkyCity is not initially expecting to monetise materially from this initiative and shareholders should see it as “a strategic entry into a space that we believe has long-term relevance.”

SkyCity cashes in on car parks

SkyCity Entertainment Group Limited announced that it has entered into a binding agreement to sell a long-term concession over its Auckland car parks to Macquarie Principal Finance Group for an amount worth $220 million.

Macquarie was appointed by Care Park to operate car park that was required to perform parking operation as per the agreed service standards.

After the fulfillment of certain conditions, the settlement is expected to be completed by July 31, 2019 according to Kaline Media.

The parking pricing for the SkyCity VIP and loyalty customers and staff will be fixed, however it will grow at a rate of 2.5 per cent per annum.

Out of the total car parks, 450 will be reserved exclusively for VIP members.

Also, SkyCity will be able to book up to 900 car parks for the game promotions, four times a month.

During the peak period, there will be a mandatory closure of the car parks in order to prioritise the access for the SkyCity VIP and loyalty customers and staff.

The operator service standard included that the operator will be operating the car park with care, skill as well as diligence in a proper, safe and efficient manner.

The operator will make sure that there is minimal disruption in case of broader business activities of SkyCity.

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