SkyCity Entertainment Group is playing its cards close to its chest over the long-term future of Queenstown’s Wharf Casino.
Following last Friday’s announcement of the $5 million purchase of its Wharf rival, Mountain Scene popped the obvious question to SkyCity: Can you say long-term that the resort will continue to have two casinos?
A SkyCity spokesperson replies: “SkyCity currently intends to run both casinos in Queenstown. This fits with our strategy of increasing our presence in Queenstown.”
When the Casino Control Authority granted not one but two Queenstown licences in 1999, there was widespread disbelief – particularly by both successful applicants – over whether a brace of casinos could survive.
The scepticism was well-founded.
Neither The Wharf nor SkyCity’s Beach Street operation have ever made the serious money casino licences are said to print.
Beach St – a 60-40 joint-venture between SkyCity and Skyline until the latter sold out last December – has posted only small profits for the past two financial years after a decade of losses.
The Wharf has never performed profitably. Its original owners quit after perpetual losses and second owners Lasseters also suffered rivers of red ink in their six years – The Wharf lost $1.5m in 2011 and 2012 alone.
The consistently poor returns from both Queenstown gambling dens suggests sooner or later SkyCity will decide whether to hold or fold on its two casinos.
The answer may lie in the type of deal SkyCity structures with Queenstown Lakes District Council over the resort’s proposed $50m convention centre on prime council land off Man St.
SkyCity has been named by the council as the convention centre’s preferred operator.
Back in February, SkyCity boss Nigel Morrison told Mountain Scene his group’s involvement in the resort’s convention centre could form part of a wider casino development, comprising VIP gambling suites and a purpose-built hotel with restaurants and bars.
However, difficulties in doing the convention centre deal emerged at this week’s council meeting.
“Structuring any [convention centre] deal hasn’t moved as quickly as we might have hoped,” council boss Adam Feeley told the meeting.
“The reality is convention sites in isolation at best [break even] and at worst can be a burden,” he said.
“So what we’re trying to do is see what is the bigger commercial deal there which can be reached with the [convention centre] consortium.”
Feeley says he hopes to get SkyCity “around the table in the next few weeks”.
In answer to a councillor’s question, Feeley revealed the convention centre itself would take up only about one-third of the Man St council land.
Although Feeley didn’t say so, there appears to be enough spare land for an upmarket hotel – plus a new purpose-built casino.