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Leadership of SkyCity Entertainment Group, one of New Zealand’s biggest gaming groups, has stated that market conditions have continued to deteriorate for the company over recent months.
The firm issued a brief trading update this week revealing that expected EBITDA for FY2025 will fall 4% from its guidance range of between $225m-$245m. This has been attributed to lower visitation and the implementation of new checks and balances.
SkyCity is one of New Zealand’s largest gambling incumbents, the other being the state-backed TAB operator and its betting partner, UK-founded international conglomerate Entain.
The firm is also an active player in Australia, and between the two countries operates five casinos as well as restaurants, hotels and a convention centre. Trading seems to have been mainly impacted by its properties in Auckland, NZ and Adelaide, South Australia.
Auckland saw reduced spend per visit across gaming and hospitality, while at the Adelaide venue visiting VIP customers were spending less. The group attributes this to it stepping up its anti-money laundering and harm minimisation programme.
“The difficult market conditions that businesses like ours – which are reliant on discretionary consumer spending – are experiencing continue to have a significant impact on both our revenue and earnings,” said Jason Walbridge, CEO of SkyCity Entertainment Group.
Aus confidence and political problems
Though acknowledging difficulties, SkyCity has found some respite. The group noted that EGM gaming turnover in South Australia has been rising in recent years – though this may have made the difficulties faced by Adealaide more surprising.
The firm is also confident in planned upgrades to the Adelaide property, which will cost an estimated AU$60 between FY25 and FY27.
Walbridge continued: “We continue to be pleased with the levels of visitation we are seeing across our projects and are adjusting our underlying cost base where appropriate, in response to the lower revenue levels we are currently experiencing.
“Notwithstanding these challenging conditions, we remain optimistic that as consumer confidence returns and spending begins to lift, SkyCity is well placed to maximise the opportunities in front of us, like the New Zealand International Convention Centre (NZCC) opening in February 2026.”
Developments which could prove challenging for the company over the coming years, however, are political ones. In Australia, the Labor government of PM Anthony Albanese has just been re-elected.
Albanese had shelved a programme of gambling reforms ahead of the election, prompting criticism from some politicians and commentators who believed that the PM was looking to avoid a potentially costly showdown with the industry.
Now that his government is firmly back in the driving seat, there is the possibility this reform package could be back on the table. Australian market stakeholders, including SkyCity, should monitor planned reforms closely.
Meanwhile, in its founding market of New Zealand, the prospect of an online casino market being launched has also reportedly caused some concerns at SkyCity and at TAB NZ.
The government plans to issue 15 three-year online casino licences by 2026, but Sky City and the TAB are both concerned about the impact this could have on the existing domestic market.
