After signing a preliminary agreement with Delaware North in November, 2018, SkyCity Entertainment Group has finally concluded the sale of its Darwin casino for the amount total of AUS$188 million.
The deal received a final nod from the Northern Territory Government and the Attorney General, Natasha Fey, transferring the property to Delaware North.
Darwin’s license is set to expire in 2031, although the new owners can seek a further extension of at least four years. The deal didn’t include the Little Mindil site, which the company plans to sell for estimated AUS$11 million.
A preliminary assessment of the casino pegged the value of the casino resort between AUS$200 million and AUS$250 million after SkyCity paid AUS$194 million in 2004 to acquire it and has owned it for 14 years until the sale.
The Darwin casino features various amenities and gaming products, including 600 electronic gaming machines over 30 table games, four restaurants, five bars, as well as private gaming suits, VIP quarters, a day spa and various meeting spaces.
SkyCity Chief Executive Graeme Stephens commented on the transaction, explaining that it was consistent with the company’s strategy of streamlining its portfolio by shedding non-core assets.
Despite the sale, SkyCity is not sounding a retreat from the casino business either, pushing ahead with a $1-billion investment plan for its casino sites in Auckland, Hamilton, Queenstown and Adelaide.
SkyCity will further seek to assist Delaware North during the transition as well as provide their property with services while the takeover lasts. The companies will now focus on a joint venture they announced in 2018 at the same time they revealed the sale.
The new entity will focus on creating an online gaming casino based in the Northern Territory, although the current legislative landscape prohibits online gambling businesses. At the end of 2018, the Australian Communications and Media Authority (ACMA) said that it had successfully ousted multiple overseas operators.
ACMA threatened to file complaints against gambling companies operating in the country with their regulators. As a result, many respected brands, including William Hill and 888, withdrew from the county.
Based on ACMA’s own account, 33 operators have left the country since. However, many unregulated gambling websites have thrived as a result. Although offshore bookmakers are continuously shut down, Australians continue to have access to unregulated gambling.
SkyCity and Darwin are hoping that should the Northern Territory Government reverse its stance on online gambling in the next decade, the pair would be able to kickstart their business. Both Delaware and SkyCity have strong presence in Oceania, the United Kingdom, and understandably the United States.
Delaware North owns 12 properties in the United States and employs over 10,000 people, based on the words of Co-chief Executive Director Lou Jacobs. Having had a footprint for over 30 years in Australia, Mr. Jacobs is confident that his company will remain to do business in the region.