New Zealand’s SkyCity gambling empire received a welcome boost last week with new investment from Australia.
The owner of Auckland’s flagship casino has had a torrid 2016 after concerns over China’s ongoing crackdown on VIP gamblers. However, an Australian equity fund has stepped in to snap up a 6.25 percent stake in the firm.
New documents filed last week reveal that Investors Mutual have bought the shares. The firm had already bought some $2.9 million worth of shares in early October.
However, that was a week before shares in SkyCity slumped after its warnings on the situation in Macau.
Several Crown Casino employees are still being detained in China, reportedly over illegal promotion of Australian gambling to Chinese nationals.
No charges have yet been made, but the mainland’s hardline stance over the promotion of overseas gambling is giving many casino firms the jitters.
Casino Shares Dive-Bomb Over China Concerns
Shares in SkyCity dropped nearly 12 percent as casino bosses warned about the Chinese government’s stance on gambling.
China’s increasingly authoritarian president, Xi Jinping, has been pushing Macau to change its ways. VIP gambling “junkets” are on the way out, with mass-market “entertainment” venues moving in.
The government has also cracked down on the flow of cash to Macau. As a result, Macau’s big casinos have seen two years of month-on-month decline in revenue. Things are only just beginning to level out.
Most forms of gambling are banned on the Chinese mainland, save for state and regional lotteries.
While VIP gambling takes a huge hit in Macau, casinos in the region have been lining up to take up the slack. The Philippines, Vietnam, Singapore, Australia and New Zealand are all keen to welcome in Chinese gamblers with money to spend.
However, the promotion of casinos abroad within China is strictly forbidden.
SkyCity Assures Chinese Over Illegal Promotions
The clampdown seems to have hit Crown Resorts, who still have several employees in custody on Chinese soil. No specific charges have been made, but promoting Crown casinos outside China would be top of the list of no-nos.
SkyCity was keen to distance itself from the arrests last week, saying that “SkyCity is confident that its contractors comply with all relevant laws and regulations in China.
“None of SkyCity’s contractors have been questioned or detained as part of this investigation.”
In a year of gambling consolidation, there have been hints of a possible merger between SkyCity and Star Entertainment Group. Star Entertainment operates Sydney’s The Star Casino and has undergone a huge refurbishment recently in a bid to attract rich gamblers from China.
With the loss of their Sydney monopoly looming (Crown are hoping to open a rival casino in Sydney by 2020) Star Entertainment are keen to recover ground before it’s lost.