Casino operator SkyCity wants to forge ahead with its controversial Auckland convention centre-for-pokies deal, and its boss can't see what all the fuss is about.
The Auditor-General's review of the government tender process for the $350 million centre is expected to be completed before the year is out.
At the SkyCity annual general meeting in Auckland yesterday, chief executive Nigel Morrison said the company still hoped to clinch the deal that would see gaming restrictions relaxed in return for SkyCity fronting the infrastructure investment.
"While it seems that it's trading laws for development, it's not. It's the way casinos work. There is nothing new about this."
After the meeting, Morrison told BusinessDay: "I struggle with the debate, quite frankly."
He said the centre would attract valuable tourists and 350,000 or more delegates each year, create 800 permanent jobs, increase the tax take and add $90m worth of annual economic activity.
"In exchange, governments manage them [casinos], and they've got to manage them carefully - there's no doubt about that," he said.
"[But] in many ways, we would say they're managed overly tightly, in terms of our competitors in Melbourne and Sydney."
He said Australian states had relaxed regulation over the last five years, and SkyCity was only asking for the same treatment here.
But not all states have been so willing to cut a deal. Last year, the South Australian government refused to give SkyCity the tax cuts and permission for new machines it was seeking in exchange for investing A$250m into an Adelaide precinct.
Problem Gambling Foundation chief executive Graeme Ramsey said Australia was now waking up to the issues that gambling created. Problems with pokies involve 70 per cent of the people who seek help from the Foundation, and Ramsey said the social cost of the convention centre deal had not been given enough weight: "Really this is trading an economic benefit for a social cost, and there's something morally repugnant about that."
Morrison said it would be sad if the opportunity in Auckland was lost, but there were "plenty of other places to invest".
Morrison's guidance for the year ahead was that the economic outlook was flat and uncertain, but he would be disappointed if normalised profit was not "in the $140 millions" for the full year, on par with last year's $141.4m.
Earnings dipped in the first few months of the financial year, as SkyCity's foreign high-roller customers won large at the tables. Revenue was down 2.1 per cent, or $6.2m, in the three-and-a-half months to October 17 compared with the same period last year.
A near 5 per cent dip in Auckland revenue was attributed to the Rugby World Cup boost last year, which had contributed about $7m, and a change in gaming systems.
Meanwhile, the group's Australian, Hamilton, Christchurch and Queenstown operations revenues were all up. On a normalised basis accounting for theoretical win rates, the group's revenue stood at $288.5m to October 17, up 1.5 per cent on the same period last year.
Morrison said SkyCity's marketing efforts in the area were an investment in the rapidly growing number of middle class and high net worth Chinese. Fairfax NZ
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