Australia-listed SkyCity Entertainment Group said mandatory carded play in New Zealand and higher anti-money laundering (AML) spending weighed on first-half earnings, with underlying EBITDA for 1H26 falling 28 percent year over year to NZ$85.5 million ($51.2 million).
Despite the weaker result, management reiterated its full-year underlying EBITDA guidance of NZ$190 million to NZ$210 million ($113.8 million to $125.7 million) and pointed to the newly opened New Zealand International Convention Center (NZICC) as the main catalyst for a stronger second half.
For the six months ended December 31st, 2025, total revenue fell 2.4 percent to NZ$406.5 million ($243.4 million), driven mainly by a 6.3 percent decline in gaming revenue.
On the company’s February 18th earnings call, CEO Jason Walbridge said the gaming decline was “predominantly due to the introduction of Carded Play across our New Zealand casinos”, which went live in July 2025, as some uncarded customers either exited or moderated their spending. The executive added that the impact was in line with expectations and prior guidance.
Higher compliance-related costs also pressured margins, particularly in Adelaide, where the company has been increasing investment in AML and host responsibility capability. Walbridge cited broader cost increases tied to the opening of the New Zealand International Convention Center (NZICC), technology spending, some one-off legal fees, and higher costs of sales linked to growth in non-gaming revenue. Management said group cost-saving initiatives are being implemented to manage the cost base without compromising customer offerings.
Even with the difficult first half, SkyCity reaffirmed its FY2026 underlying EBITDA guidance and emphasized that earnings are expected to be heavily weighted toward the second half. CFO Peter Fredricson said the company expects an approximate 43 percent/57 percent split between first-half and second-half underlying EBITDA, reflecting first-half preopening costs for the NZICC and a revenue uplift as the venue ramps up.
NZICC positioned as the “growth engine” for 2H26
The NZICC opened on February 11th, 2026, with its first live event held on February 12th. Walbridge called it a major milestone for SkyCity and Auckland, saying the venue is central to the company’s recovery plan. More than 110,000 visitations are already confirmed for the remainder of FY2026, with the strategy focused on converting convention traffic into cross-precinct spending.
COO Callum Mallett said SkyCity expects hotel occupancy to rise from the mid-70 percent range to above 80 percent, with average room rates expected to increase by about 10 percent. Management also expects operating leverage, arguing it can service higher visitor volumes without labor costs rising proportionally, supporting margins.
Adelaide carding risk and online timeline pushed out
In Adelaide, mandatory carded play is set to begin in December 2026. Management estimates that 15 percent to 20 percent of current Adelaide revenue is uncarded and therefore at risk during the transition.
Separately, SkyCity said regulation of New Zealand’s online gaming market has been delayed by about five months, with licenses now expected by December 1st, 2026, pushing meaningful revenue into FY2027.
