SkyCity Entertainment, the group that owns the Darwin casino, has announced it will be writing down the value of the casino by a staggering $95 million – nearly a third of the casino’s total book value.
The New Zealand owned company will now launch a review to “identify strategic opportunities” to maximise the value of the casino. It is not clear whether SkyCity is considering selling the casino.
A statement released by SkyCity blamed the increasing competition from other gaming clubs in the Northern Territory for the decrease in its revenue.
The total number of electronic poker machines authorised to operate in the Northern Territory outside of the two casinos is 1,852. Licensed hotels and taverns are allowed to operate a maximum of 20 machines, while clubs can operate a total of 55 machines.
“Since the implementation of that policy in July 2015 there has been a 75 per cent increase in the number of gaming machines in Darwin (outside of the casino),” SkyCity said in a statement. “This significant increase in competing gaming machines in the catchment area of the casino has consequently had an increasingly adverse impact on revenue and earnings at SkyCity Darwin since the beginning of 2016.”
Following the $95 million drop, SkyCity says the book value of the Darwin casino will fall to $195 million, which is the same amount SkyCity bought the casino for back in 2004.
SkyCity Darwin offers 600 electronic gaming machines, which are available 24 hours, seven days a week. The casino also houses a range of table games including roulette, poker, blackjack and baccarat which operate from midday.
News of the revenue drop comes just days after SkyCity announced its plans for a major refurbishment to the Adelaide Casino were finally approved by the state government. The $330 million redevelopment is part of Adelaide’s Festival Plaza Precinct redevelopment which aims to turn the Torrens Riverbank into a major tourist destination.
The Adelaide Casino facelift will include the introduction of new bars, restaurants, function spaces and 123 hotel rooms and is expected to create over 1,000 construction jobs and 800 permanent positions once the casino opens its doors in 2020.