SkyCity Entertainment Group has announced that the High Court of Australia has granted SkyCity Adelaide special leave to appeal a ruling by the South Australian Court of Appeal.
The appeal concerns the interpretation of provisions in the Adelaide Casino Duty Agreement dated October 27th, 1999. These provisions affect the calculation of casino duty related to loyalty points converted for gaming machine play at SkyCity Adelaide.
According to the filing to the Australian Stock Exchange, the dispute, outlined in SkyCity’s 2023 Annual Report and FY24 interim financial statements, centers on the proper interpretation of the agreement.
Given the complexity of the issues, both SkyCity Adelaide and the Treasurer of South Australia sought declaratory relief from the South Australian Supreme Court.
With the High Court’s decision to grant special leave, a full hearing of the appeal will take place later this year. The High Court’s ruling could either uphold the Court of Appeal’s interpretation of the agreement or support SkyCity Adelaide’s proposed interpretation.
In a separate filing, the firm now expects underlying Group EBITDA to range between NZ$280 million ($173 million) and NZ$285 million ($176 million), and underlying Group NPAT to be between NZ$120 million ($74 million) and NZ$125 million ($77 million).
This represents a reduction from the previous guidance, which projected EBITDA between NZ$290 million ($180 million) and NZ$310 million ($192 million), and NPAT between NZ$125 million ($77 million) and NZ$135 million ($84 million).
Several factors have contributed to this downward adjustment. The challenging economic environment has impacted customer spending, although visitation numbers remain strong across SkyCity sites.
Adelaide casino duty expenses for FY24 could potentially rise due to a ruling by the South Australian Court of Appeal regarding the treatment of loyalty points.
SkyCity Adelaide has been under supervision by the Australian authorities and recently the group announced that have jointly (AUSTRAC) submitted a proposal to the Federal Court of Australia, suggesting a penalty of AU$67 million ($44.5 million) for the casino.
AUSTRAC initiated proceedings against SkyCity Adelaide in 2022, alleging significant and systemic non-compliance with anti-money laundering and counter-terrorism financing laws.
SkyCity has acknowledged that it breached the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006.
AUSTRAC and SkyCity have agreed on the penalty, but the final decision rests with the court, with a hearing scheduled for June 7th, when the proposed settlement will be reviewed.
