Wednesday 17th July 2013
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SkyCity Entertainment Group, which this month agreed to build a $402 million convention centre in Auckland in exchange for regulatory concessions, has been granted approval to buy Queenstown's Wharf Casino for $5 million.
The Commerce Commission cleared the Auckland-based casino and hotel operator to buy Lasseters International-owned Otago Casinos, which will add 74 electronic gaming machines and six gaming tables to SkyCity's existing operations in the resort town. The antitrust regulator said it was satisfied the acquisition was unlikely to substantially lessen competition in the national or the Queenstown markets.
"This was an unusual application because gambling is strictly regulated in New Zealand," chairman Mark Berry said in a statement. "The removal of competition between the two Queenstown casinos would not materially impact on competition given this high level of regulation and other constraints SkyCity would continue to face."
SkyCity moved to 100 percent ownership of Queenstown Casino in December, buying out Skyline Enterprises' 40 percent stake for $5 million as it looks to capitalise on demand from its high-roller overseas gamblers.
The company sees Queenstown as "an area of significant potential for continued tourism development" and the company is also part of a group that is the preferred bidder to build the Queenstown Convention Centre. SkyCity would be the operator of the convention centre built by an investment group including Ngai Tahu Property and Wellington-based investment bank Morrison & Co.
Earlier this month SkyCity finalised a deal to develop a $402 million convention centre in Auckland for the government in exchange for being granted increased gambling concessions and a 27-year extension of its Auckland casino licence.
The company's shares fell 0.9 percent to $4.35 yesterday, and have gained 15 percent this year. The stock is rated an average 'buy' based on eight analyst recommendations compiled by Reuters, with a median target price of $4.75.
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