SkyCity Got Everything Going For Them As Insurance Payout Covers Covid-19 Losses

Article by : Helen Sep 9, 2020

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Gambling operators around the world are experiencing the effects of the coronavirus in different ways. For some casinos, things turned out very badly. Others, even under challenging situations, found ways to get back on their feet. According to the SkyCity Group’s official report, the company increased its revenue by 36.8%, which amounted to 950 million euros. Because of two crucial factors, namely reasonable win rates and a substantial amount of insurance payments received as compensation for the fire in 2019, the firm achieved its financial goals.

It is noteworthy that against the backdrop of total revenues increase, normalized revenues reached 658.4 million euros. The indicator of normalized revenue dipped by 24.3%. The normalized revenue indicator was formed, considering the average gain’s value and not including additional income items, such as insurance payments. SkyCity’s most profitable project turned out to be the Auckland division, which recorded 426.06 million euros. The same figure in 2019 was 18% higher. The reason for the decline was the coronavirus impact. The casino showed consistent revenue growth for eight months up until February 29, when the Covid-19 restrictions came into effect. Most of the amount, namely 194.95 million euros, was brought by table games. The same figure in 2019 was 14.8% higher.

The casino in Hamilton turned out to be one of the most stable gambling outlets. The impact of Covid-19 was the smallest here. The casino managed to earn 49.67 million euros. In other words, the drawdown was only 4.8% compared to 2019. The central part of the amount fell on slot machines, namely 34.97 million euros. Revenue from board games was €7.2 million, while income from other activities showed remarkable growth to €7.60 million.

An equally important factor that influenced the sustainable financial performance of 2019-2020 was the launch of an exclusive online project based on GiG. The operator managed to record revenue of 8.62 million euros during its first year of operation. The company was able to attract more than 15,000 clients, which provided a cumulative betting volume of €214.13 million. SkyCity CEO Graeme Stephens noted that the new project’s revenue had dropped slightly since the relaunch of land-based gambling establishments. However, the company faced renewed financial growth after land-based casinos were forced to close their doors by August 31.

After the casinos reopened their doors in May, we saw a slight decrease in the volume of bets and online gaming revenue. After the business closed again, we saw an increase in online players’ activity. The customer base now reaches 35,000 and continues to grow. We are actively preparing for the further development of the online gaming industry in New Zealand. We also actively support the bills that the government is developing in this direction.

In total, insurance claims after an assessment of losses from a fire that occurred at the New Zealand International Convention Center in October 2019 reached 324.78 million euros. As a result, the company received substantial compensation, which helped it even out the indicators of a very difficult 2020. Currently, the gaming brand has a positive financial balance. It is likely to cope with new possible restrictions due to Covid-19 easily.

The SkyCity CEO also noted that the company had to cut casino staff in New Zealand by 25% and restructure its debt. An equally important factor that helped the company stay afloat was the subsidized wages for New Zealand and Australia employees.