SkyCity likely to sell Adelaide casino

Gaming industry players Tabcorp and Tattersall’s are believed to be unlikely to bid for the Adelaide casino. Tabcorp, which owns three Queensland casinos as well as Sydney’s Star City, is not a contender because it has ruled out any acquisitions for two years. Tattersall’s has also said it does not want to buy any more casinos.

Adelaide is unlikely to attract a high price because of the lack of likely bidders and the fact that the casino is located in a heritage-listed building which is almost impossible to expand or renovate.

In the first half of this financial year the casino contributed us$ 8.3 million in pre-tax earnings, compared to an average of us$ 47 million for each of Tabcorp’s gambling palaces.

About half its revenue comes from the Auckland casino and a third from the Adelaide and Darwin casinos. It also owns three other New Zealand gaming sites.

SkyCity made the announcement at an update for analysts and institutional shareholders, where it also revealed a us$ 24 million cost-cutting program aimed at boosting its share price despite effectively downgrading its profit forecast.

It said it would cull 230 jobs and sell its us$ 40 million Metro building in Auckland. It would also consider selling its 40 per cent-owed Christchurch casino and cinema business. The news comes two months after the company blamed a dearth of VIP gamblers at its Auckland casino for a 23 per cent slump in first-half profit.