SkyCity Entertainment Group reported a return to net profit during its 2025 financial year despite a decline in revenue, although the operator has warned that earnings could fall year-on-year in 2026.
Group revenue for the 12 months to 30 June 2025 amounted to NZ$825.2 million (US$479.5 million), SkyCity reported on Thursday. This was 4.2% short of the $861 million recorded in the operator’s previous financial year.
SkyCity said the decline was mainly due to a reduction in customer spend and a lower churn of VIP players in Adelaide. CEO Jason Walbridge also made reference to a “difficult operating environment”, with economic recovery in New Zealand slower than expected.
“Our financial results reflect the difficult operating environment we’ve navigated in FY25,” Walbridge said. “The delayed economic recovery in New Zealand led to lower discretionary spend impacting our business and that has come through the same time as a period of elevated investment.
“This investment has been centred around regulatory systems upgrades, pre-opening costs for the New Zealand International Convention Centre (NZICC) and preparation for online casino gaming in New Zealand.”
Is SkyCity ready for legal iGaming in New Zealand?
New Zealand in July moved closer to legal iGaming with the Online Casino Gambling Bill. This followed the government cabinet’s earlier decision to regulate the currently unregulated online casino sector.
The bill revealed 15 three-year licences will be made available for the new market. Interested parties are required to submit detailed business plans to the country’s regulator.
SkyCity is one of several operators that have shown an interest in entering the New Zealand iGaming market. TAB NZ, 888 and Bet365 have also said they would consider launching online gambling in the country.
However, when asked about the prospect of legal iGaming in New Zealand, Walbridge remained relatively tight-lipped. He said the group was awaiting further government guidance.
“We are awaiting more details from the government and regulator on the auction process and licence terms,” Walbridge said. “We know it will be a three-year licence with a five-year renewal period.”
Online generates $1.8 million loss in FY25
Taking a closer look at SkyCity’s figures for FY25, almost all areas of the business reported a drop in revenue.
Auckland saw revenue fall 11.6% year-on-year to $209.6 million, while revenue in Hamilton and Queensland also dropped 3.7% to $33.7 million. In its Adelaide location, SkyCity also posted a 21.5% decline in revenue to $31.1 million. Earlier in August, following a lengthy regulatory investigation, it was confirmed that SkyCity could keep its Adelaide casino licence.
Total visitation across its casino properties was up 4.6% at 10.5 million during the year. This was despite the slower-than-expected economic recovery in New Zealand.
The group’s online business slipped from $3.6 million in revenue in FY24 to a $1.8 million loss. SkyCity put this down to competitor behaviour and continuing investment ahead of the planned regulation in New Zealand.
SkyCity back in the black
There were more positive results across SkyCity’s bottom line.
On the whole, costs were lower year-on-year, offsetting the decline in revenue. For FY25, there were no expenses related to the NZICC fire that occurred in October 2019, while last year SkyCity also faced certain regulatory charges.
As such, operating profit hit $121.9 million, a rise of 164.4%. SkyCity did see a rise in finance expenses to $53.7 million, although pre-tax profit was still able to climb 126.6% year-on-year to $68.2 million.
The group also benefitted from a lower income tax bill of $38.9 million, compared to $173.5 million in FY24.
Last year, SkyCity faced a one-off tax expense of $129.4 million due to a change in tax laws in New Zealand. The government removed the ability for property owners to depreciate commercial buildings with a useful life of 50 years or more for tax purposes.
As such, SkyCity ended FY25 with a net profit of $29.2 million, compared to a $143.3 million loss in FY24. However, underlying EBITDA declined 15.9% to $233.7 million.
SkyCity issues earnings warning for FY26
Looking to FY26, SkyCity said it will be impacted by several factors, including the launch of carded play in New Zealand. This measure requires players to provide a valid membership or loyalty card before they can start gambling at any of SkyCity’s venues.
“Carded play is now live across all our New Zealand sites,” Walbridge said. “While still early days, we’re pleased with the response from customers so far. We are also confirming the previous guidance regarding the impact on previously uncarded revenue, equivalent to $20 million to $30 million EBITDA in FY26.
“This is a significant change for SkyCity and our customers. We continue to work hard on raising our host responsibility measures. It will also create operational efficiency over time and, importantly, deliver meaningful and actionable customer insights.”
Aside from this, SkyCity again referenced “challenging” market conditions in the short-term and that this will continue to impact performance.
“This continues to be a challenge for us as the ongoing delay in the economic recovery in New Zealand comes at the same time as elevated costs related to upgrading our regulatory systems and B3 programme, pre-opening costs for NZICC in February and the expected launch of regulated online casino gaming in winter 2026,” Walbridge said.
As such, underlying EBITDA in FY26 is forecast to range from $190 million to $210 million, which would fall short of its FY25 total. Reported EBITDA is also likely to decline year-on-year, SkyCity said.
The operator added that net profit after tax will reflect up to $40 million in interest costs, as much as $100 million in depreciation and amortisation, as well as higher tax from the recent changes. As such, no dividends are expected to be paid in FY26.
Could FY27 be brighter for SkyCity?
However, looking towards FY27, Walbridge was upbeat about the expected launch of legal iGaming in New Zealand.
He said: “In FY27, we expect earnings to improve with NZICC expected to be breakeven on a stand-alone basis and the regulated online gaming business targeted to deliver breakeven in the first year of operation in FY27.
“We remain optimistic that we will see a recovery in spend per visit across our properties as the New Zealand economic backdrop improves, supported by a full year of visitation benefits from NZICC and the spend expected from that. SkyCity is well placed to maximise that opportunity when it occurs.”
SkyCity CEO Jason Walbridge looks ahead to the launch of legal iGaming in New Zealand but says the sector is awaiting details from the government and the regulator.