‘We are not where we want to be’, says CEO of struggling SkyCity

Thursday, 20 February 2025

Priority number one for SkyCity Entertainment in 2025 is re-establishing trust, says chief executive Jason Walbridge.

Trust from regulators, and trust from shareholders.

“We are not where we want to be,” Walbridge said, speaking to The Post after the company, which has casinos in Auckland, Hamilton, Queenstown and Adelaide, reported a 73% fall in its first half net profit after tax.

“Culture change is huge. We have got a really clear plan with the priority being to ensure we have learned from the past,” Walbridge said.

That past has been difficult.

The casino operator has found itself in difficulty in New Zealand and Australia as a result of anti-money laundering and responsible gambling failures, as well as underpaying gaming duty in Australia.

It’s cost shareholders dearly in settlements, a write-down of its Adelaide casino, and a five-day casino shutdown in Auckland last year.

These self-inflicted wounds have come at a time when visitor spend at its casinos and entertainment complexes has been depressed thanks to the cost-of-living crisis.

Long-suffering shareholders have seen the casino operator’s share price fall by 25% in the past 12 months, and it fell from just over $2.50 in February 2023 to just under $1.50 on Wednesday. Dividend payments remain suspended.

“We absolutely acknowledge that we haven’t been delivering the returns our investors have hoped for,” he said.

But Walbridge has presented investors with a trust turnaround plan, albeit one that is coming at a cost as the company invests in systems to change its culture and convince regulators that it deserves its casino licences in New Zealand and Australia.

These licences were granted by regulators as a privilege, not a right, Walbridge said.

Walbridge started as chief executive in July last year, part of sweeping leadership change that has seen 58% of senior leadership roles having changed hands in the past 18 months.

Independent third parties were hired to conduct culture reviews of SkyCity in New Zealand and Australia, though they have not been published for investors. New risk committees and leadership positions have been created. A company-wide integrated risk management system will go live before the middle of the year. Casinos in Australia and New Zealand are moving to “carded” play to better track gamblers. By July, all gamblers in SkyCity’s New Zealand casinos will have to have play through a SkyCity card. There’s increased use of facial recognition technology, which is being expanded in Adelaide to better monitor gamblers.

A culture change plan is being reviewed by regulators in Australia, where there remains a question mark over the future of its casino licence.

Walbridge said he had been spending a lot of time in Adelaide.

SkyCity’s Queenstown casino licence is up for renewal this year. Its Hamilton casino licence is up for renewal in 2027.

Walbridge was optimistic the licences would be renewed.

“We are confident we are in a good space here in New Zealand,” he said.

But he felt he could not speak about whether SkyCity’s investments in risk systems in its Adelaide casino increased the chance of it retaining its casino licence there.

SkyCity has a new company code of conduct, and the introduction of a “should we?” test for decision-making.

Walbridge said it covered decisions down to those being made by individual staff members.

“Should we serve someone another drink? Should we talk to a customer that looks like they might be finding a situation difficult.

He said the company had developed a five-year “master plan”, which included selling some assets to pay down debt, and free up money to invest, though what those assets are has not yet been announced.

There are some things for shareholders to look forward to, Walbridge said.

The first was the opening of its International Convention Centre in February next year, which was expected to boost visitors to SkyCity’s facilities by 500,000 each year.

The opening has been subject to repeated delays that started in 2019 with a massive fire at the nearly completed conference centre.

Walbridge said one of his challenges at the moment is “being patient” about the convention centre’s opening.

And from 2027, after more than a decade’s wait, New Zealand will finally regulate online gambling. Currently, New Zealanders were being aggressively targeted by offshore casino operations without any regulation.

Last year, SkyCity had focused on building its online gambling platform, Walbridge said. This year it would work on “optimising” its online casino in readiness for the regulation.

SkyCity would have to apply for an online gaming licence in New Zealand.

The International Convention Centre and online gaming were two big growth opportunities for SkyCity.

“We have much to be optimistic about,” Walbridge said.