One of Queenstown’s two casinos has racked up nearly $6 million in losses during the past three years.
Latest accounts obtained by Mountain Scene reveal Lasseters Wharf Casino lost almost $3.5m in 2009 alone, with net gaming revenue down 23 per cent to $1.7m.
The Wharf and rival SkyCity Queenstown Casino have been operating for a decade. Singapore-listed Lasseters bought the loss-making Wharf in 2006.
The island state’s Business Times reported Lasseters paying just $1 plus “a loan of some $NZ3.75m to repay Wharf Casino’s loan from shareholders”.
“We’re confident we’ll be able to unlock Wharf Casino’s full potential,” Lasseters chairman Jaya Tan said then.
But as well as poor trading, the Wharf has been hit hard by interest costs and writeoffs.
Lasseters paid out $361,000 in interest on borrowings of $6.8m in 2009 and took a knife to the balance sheet, writing off $781,000 of goodwill and $1.08m off the 25-year casino licence’s carrying value. The licence is now valued at zero.
Wharf marketing manager Alex Vitale sums up the problem.
“We’re extremely limited by the licence in what we can do in terms of advertising to the local community so we basically rely on tourism.
“And tourism is so unstable,” Vitale says.
But the Wharf had a good winter last year because of Australian visitors and Vitale looks forward to a repeat this winter.
Lasseters is a long-term player: “And I think we’re going to start making a profit soon.”
Rival SkyCity Queenstown has stemmed its own red ink and has begun making small profits at last.
The larger casino is 60 per cent owned by SkyCity Entertain-ment Group and 40 per cent by local conglomerate Skyline.
Skyline chairman Ken Matthews won’t reveal its bottom line – but he’s philosophical.
While previous years were difficult and the casino isn’t as fruitful as other Skyline investments, SkyCity Queenstown is now “cash positive and profitable”.
Nevertheless, the now-defunct Casino Control Authority should never have issued two Queenstown licences, Matthews says.
“That was unfortunate. We’ve just got to live with it really.”
- Something’s cooking