Board of SkyCity Entertainment Group gives final go-ahead for expanded $330 million Adelaide Casino redevelopment
Renato Castello, The Advertiser
July 26, 2017 1:36pm
CONSTRUCTION of the highly-anticipated Adelaide Casino upgrade will start next year after its owner SkyCity Entertainment finally gave the go-ahead for a $330 million overhaul.
The New Zealand company has announced to the New Zealand Stock Exchange (NSX) on Wednesday morning that it has reached a development agreement with the State Government for the upgrade — which will include new restaurants, bars, cafes and a larger hotel with the number of rooms increasing from 89 to 123.
Construction will begin in the first quarter of 2018 after the completion of public works at the Festival Plaza Precinct later this year.
The project is expected to be finished by mid-2020.
The $330 million price tag is $30 million higher than SkyCity has previously announced. It will support 1000 jobs during construction and create 800 permanent positions once the casino opens.
The announcement comes three months after SkyCity reported in a quarterly trading update that the expansion remained subject to discussions with the State Government and Independent Gambling Authority over gaming concessions.
In Wednesday’s announcement, SkyCity has revealed it will be given greater discretion over who can access its high-roller rooms by allowing to invite up to 1000 prospective customers.
The threshold to qualify will be lowered and premium customers will be given an “increased number” of guest passes to the VIP room which has no limit on maximum bets.
Adelaide Casino general manager Luke Walker said the casino did not give the Government as an “ultimatum as such” that it would not proceed with the redevelopment without the concessions.
“The discussion with the State Government revolved around the ability to attract interstate and international customers,” he said.
“There’s been a slight relaxation to our premium rooms to facilitate that.”
He said there would be no increase in the number of pokie machine entitlements.
Urban Development Minister Stephen Mullighan said the government has not contributed any funds to the project.
The Advertiser reported in February that SkyCity was understood to have demanded the Government abandon scrutiny of its VIP rooms, arguing it should be free to decided which high rollers to reward through its loyalty programs.
The casino’s half-yearly earnings from international business shrank by more than half to $900,000 in the six months to December last year as SkyCity’s international and VIP business was hit by increased restrictions on funds transfers and reduced visits by high rollers.
SkyCity Entertainment chief executive Graeme Stephens said the company had decided to increase the number of hotel rooms after “careful consideration”.
“We believe there is demand for more quality hotel rooms in Adelaide from both domestic and international visitors. This provides a better-balanced product while also helping South Australia realise its full potential as a premium tourist destination,’’ he said.
SkyCity has also allocated $10 million to remodel the existing casino building in the heritage-listed Railway Station to match the new development while “protecting its special character”.
Wednesday’s expansion announcement — which also comes 18 months after the project received building approval — is the final component in the redevelopment of the Festival Plaza Precinct.
Works to refurbish the Adelaide Festival Centre, upgrade the northern promenade and lower Festival Drive and separating pedestrians from vehicles are already underway.
Walker Corporation is investing $500 million for a 40,000 sqm office tower, underground public carpark and retail area with work due to start this year.
The State Government is investing $180 million in a new plaza and upgrade of the Adelaide Festival Centre.
Mr Mullighan said the announcement is fantastic news.
“Reaching these agreements has involved a complex set of negotiations between the key parties — SkyCity and Walker Corporation — as well as a number of other precinct stakeholders like the Festival Centre and the InterContinental Hotel,” he said.
“The Festival Plaza will become a landmark site in the heart of Adelaide’s Riverbank Precinct, bringing together all of the precinct’s icon sites such as the Adelaide Oval, the Festival Centre, the Convention Centre and the Riverbank Bridge.
“The upgraded Festival Plaza will become a unique world-class hub for the arts, culture, tourism and entertainment.”
Premier Jay Weatherill said he was pleased to see the project progressing.
“This redevelopment, and the wider development across the Riverbank Precinct is a welcome investment in the state,” he said.
