The new boss of the Kiwi gambling company behind casinos in Adelaide and Darwin believes he can lure high rollers away from the bright lights of Macau and into his local casinos, a feat his predecessor failed to achieve.
Nigel Morrison, the former Crown Casino executive and now SkyCity Entertainment chief executive, told the Herald yesterday the strategy planned to take on rival casinos, including Crown, by attracting big spenders with lavish enticements.
He planned to increase earnings by doubling the value of bets laid by high rollers, and to revive the ailing company by hiring a half a dozen people in the next six months, partly to replace those who had quit in the past year because of poor morale.
Mr Morrison, who is two weeks into the job, said the company had previously attempted to attract greater numbers of high rollers from South-East Asia and China in particular, and to encourage them to spend more, but had failed to hold on to the lucrative business.
„I think it’s challenging, but I’m hoping we might be able to look at that business slightly differently and try to come up with something that is a little bit different,“ he said.
If the company wanted to be a major player in the casino industry it would have to fight for the big-spending players, known in the industry as „whales“.
„I think we should try a little bit harder in that area to compete against other players in that space,“ he said, adding that Darwin’s proximity to Asia should help it attract players.
„In Macau the [high-roller] volumes are huge and we are basically not noticeable – we would think there are good opportunities to grow that business.“
He declined to reveal what sort of incentives would be offered to big punters but said the increased number of high rollers would help reduce the volatility of revenues from month to month.
The small number of players betting large amounts of money against the house leads to unpredictable win and loss ratios for the casino.
Mr Morrison is accustomed to appealing to wealthy gamblers, having previously worked at Macau’s Galaxy Entertainment Group and as chief operating office of Crown.
High-roller betting at SkyCity contributes only about 5 per cent of earnings, but if the company can double the value of high-roller bets to AUD 3 billion a year, it could see the earnings contribution increase to 10 per cent.
Of the AUD 1.5 billion in total annual bets placed by international gamblers at the company’s Auckland, Darwin and Adelaide casinos, more than AUD 700 million comes through Auckland, about $ 500 million through Darwin and the remainder through the smaller Adelaide casino.
The company is negotiating with buyers for its under-performing New Zealand cinema business and hopes this will be completed within three months.
SkyCity shares closed 8c lower at AUD 3.24 on the Australian Stock Exchange yesterday.