Special legislation passed in South Australia has given Adelaide’s SkyCity Entertainment Group the go-ahead to create an A$300 million riverside complex expansion. Some are calling it a game-changer when it comes to the entertainment group’s bottom line and casino gambling in South Australia.
The South Australia government put into play legislation extending an exclusive caino license to the entertainment group and casino. This amendment of the existing caino authorization law enables the group to extend its excessive franchise to the year 2035. It also paves the way for cashless gambling and ticket in, ticket out, or TiTo, technology. The amendment lowers tax rates for gambling and allows an increase in the number of slot machines from 1,000 to 1,500. The number of gaming tables also increases to 200.
The A$300 million expansion along the River Torrens banks will bring about new gaming facilitates, dining and a 6-star casino hotel. The development is coming attached to a lot of hype with government officials labeling it the crown jewel of the riverside gambling complex. Officials believe it will be a considerable boon to local job creation and increase tourism.
Nigel Morrison, SkyCity CEO, says the new casino complex expansion is important to bringing in Asian high rollers, especially Chinese gamblers. The expansion will aid South Australia in tapping the lucrative and evolving high end Asian market, according to Morrison.
SkyCity receives other perks under the newly revised expansion law. The company has greater leeway in assigning maximum bet parameters as well as maximum jackpots and cashless gaming opportunities in the high-end VIP gaming rooms. The new tax rates are going from 41 percent to 34 percent even as the number of non-VIP electronic games are increased with a tax rate set at nearly 11 percent. Non-VIP table game taxes go from just less than 1 percent to 3 percent.
The changes in slot machine taxes and machine numbers are needed to make the Adelaide casino competitive with other Australian casinos, according to analysts. Whereas currently Adelaide slots have a daily win rate set at A$180, the daily win rate at Queensland casinos is A$300 and A$360 at Auckland.
The market responded to SkyCity moves with stock traded around A$4 after gaining more than 10 percent this year. Analysts contacted by Reuters said the stock was a “buy” with a target price of around $5.