Adelaide Casino

The Hon. T.A. FRANKS (15:37): I seek leave to make a brief explanation before asking the Minister for Business Services and Consumers questions about SkyCity Casino.

Leave granted.

The Hon. T.A. FRANKS: As the minister is well aware, in this parliament we have recently seen reforms that have been of benefit to the SkyCity casino. At a presentation in December last year they championed those legislative reforms to their shareholders and noted that a new tax rate will apply to premium VIP EGMs, reduced from 43 per cent to 20 per cent, and noted that they may have the ability given the exclusivity contract to open a new casino in the future under their own auspices.

It is little wonder then that in Smart Investor magazine this month, Perennial Growth's Lee Mickelburough was most excited about investing in SkyCity because as he said:

We recently bought (New Zealand-based casino operator) SkyCity. That's an interesting situation because it has a casino in Adelaide that could be poised to realise value. Usually there's not much happening in Adelaide but the casino there is right across from the cricket grounds and they've built a footbridge to go right into the back of the casino. They've negotiated a ticket-in/ticket-out, premium gaming rooms and a lower gaming tax. We think it is going to make another $50 million EBITDA without them doing anything.

1. Does the minister agree that SkyCity is going to make $50 million EBITDA without SkyCity doing anything?

2. Does she have concerns that this is lost revenue to this state?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:39): I am not surprised at all to hear the Greens' doomsday view on the potential for SkyCity casino to be part of a reinvigorated, vibrant riverside precinct. I am not surprised that the Greens see this as the kiss of death, because that is how they usually see these innovations. Indeed, as the honourable member mentioned, in 2014, this government implemented a new tax and regulatory arrangement. It provides regulatory certainty for the Adelaide Casino to proceed with its $350 million investment of an expanded casino with a six-star boutique hotel in order to compete in the international gaming market.

The new approved licensing agreement between the South Australian government and the Adelaide Casino became unconditional as at 14 February 2014. The Adelaide Casino has made the $20 million variation payment required under the agreement. Nonetheless, unless by 30 June 2019 the Adelaide Casino is opened for business and an expanded casino and six-star boutique completed in accordance with the development proposal approved by me as minister, the specific exclusivity provisions outlined in the approved licensing agreement will no longer have effect. So they are required to deliver. There are further legislative amendments that will commence in July 2014.

This agreement has been put in place to allow the Casino to expand its facilities and build, as I said, a six-star boutique hotel so that South Australia will be able to compete in the international gaming market. This is a very important initiative for our riverside precinct development. This is a key corner of that and will increase the vibrancy of the riverside so that it can attract other investors and developers into that space as well. Mr President, as I said—

Members interjecting:

The PRESIDENT: Let's not have discussion across the chamber.

The Hon. G.E. GAGO: —it is an initiative that I would expect the Hon. Tammy Franks should be standing here and congratulating this government for.