Sky City 'would eliminate competitor'

Chris Hutching

Friday 30th April 2004

Christchurch Casinos has told the Commerce Commission that allowing Sky City Entertainment to buy a 40% stake would leave the small Wharf Casino in Queenstown as the only truly independent casino left in the country.

Sky City has a deal to buy 40% from Aspinall (NZ) but Christchurch Casinos chairman Barry Thomas, who controls another 40%, is fighting the move.

A submission prepared by Chapman Tripp outlines how the expansionist activities and philosophies of Sky City would result in the elimination of Christchurch Casinos as a "vigorous maverick competitor" about to embark on a $22 million expansion plan at its inner-city site, including $720,000 this year on smokers' balconies for premium players.

Proof of Sky City's monopolistic ambitions in the form of letters and emails were provided to the Commerce Commission investigators that purport to show that Sky City had approached the other two smaller shareholders in Christchurch Casinos who hold 10% each.

Sky City's proposed shareholding in CCL would be more than double the threshold in section 7(1)(c) of the Gambling Act 2003, which deems shareholders holding over 20% of the shares in a casino as having a "significant influence" in that casino.

Because of various other cross shareholdings, Sky City would also have influence over Dunedin Casinos. "In any event, that 40.5% shareholding should only be seen as the first step in a creeping acquisition. There are clear indications that Skycity has no intention of stopping at that level of shareholding."

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