Lucky high rollers hit SkyCity profit
High-rolling gamblers who can win or lose up to $8m at a time helped take the shine off SkyCity Entertainment Group's profit for the first half of the 2013 financial year.
But the casino operator says that although it may have been "less lucky" in the six-month period, it saw growth in its core businesses, and the result was satisfactory given that 2012 was a tough act to follow.
SkyCity announced a net profit of $66.3m for the six months to December, down 15 per cent on the same time the previous year when the country hosted the Rugby World Cup. Reported revenue was $487.3m, down 1.3 per cent.
However, if greater than average losses in its high rollers Horizon business in Auckland and Darwin were taken out, the company made a normalised net profit of $74.4m for the period, down 3.5 per cent. Normalised revenue was $495.7m, up 1.4 per cent. Horizon had a theoretical win rate of 1.06 per cent in the half-year, compared with 1.64 per cent in the previous corresponding period, resulting in a difference of $8.4m. The average is 1.35 per cent.
"With the size of bets we take you're not always going to get that theoretical average over a six-month period," chief executive Nigel Morrison said. Horizon clients were high net worth individuals who mostly played Baccarat. "You might be surprised that they are very relaxed about losing $7m to $8m."
The company did not book higher than average wins, and "conversely when we're unlucky we prefer not to book those losses. That's why we normalise our results," he said. Fairfax NZ
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