ANNOUNCEMENT OF PLAN TO OFFER ONLINE CASINO GAMING

22 May 2019


Client Market Services
NZX Limited
Level 1, NZX Centre
11 Cable Street
WELLINGTON


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ASX Market Announcements
Australian Stock Exchange
Exchange Centre
Level 6
20 Bridge Street
Sydney NSW 2000
AUSTRALIA


RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC)
ANNOUNCEMENT OF PLAN TO OFFER ONLINE CASINO GAMING

Please find attached an announcement concerning the company’s plan to offer
online casino gaming via international iGaming company Gaming Innovation Group
Inc.



Yours faithfully



Jo Wong
Company Secretary

MARKET RELEASE
22 May 2019
SKYCITY announces plans to offer online casino gaming via international
iGaming company Gaming Innovation Group Inc
SKYCITY Entertainment Group Limited (NZX/ASX:SKC) today announced that its Maltese
subsidiary company, SKYCITY Malta Limited, will partner with international iGaming
company Gaming Innovation Group Inc (GiG) to provide New Zealanders with an online
casino gaming platform.
The proposed ‘skycitycasino’ online gaming site is expected to be launched in mid-2019
and will be operated from Malta under a .com URL.
Under current New Zealand law, only Government-owned Lotto and the TAB are permitted
to offer online gaming from within New Zealand, however many New Zealanders freely
participate in online casinos provided by offshore operators.
SKYCITY Chief Executive Graeme Stephens said the skycitycasino online gaming site will
offer best-in-class host responsibility and a brand name New Zealanders can trust.
Although the online casino will be operated from offshore, it will ensure that its obligations
under New Zealand GST legislation are complied with.
The existing online casino market in New Zealand is well established (with a number of
sites in operation) with estimates suggesting approximately $160 million a year is spent
by New Zealanders on online casino platforms currently provided by offshore operators*.
The offshore companies offering these games are not liable to pay local gaming tax, are
unlikely to be paying GST in New Zealand and are not required to comply with the host
responsibility practices of land-based operators.
Mr Stephens says SKYCITY would be supportive of any future plans by the Government to
regulate the New Zealand online casino market, including introducing an appropriate
licensing regime for operators and imposing taxes and mandatory host responsibility
requirements.
“Online casinos are widely used by New Zealand customers and this trend will only
continue. The world is rapidly moving online and our industry is no exception, so we have
to ensure we remain relevant to changing consumer trends and preferences,’’ Mr Stephens
says.
“As an established land-based casino operator with significant investments in New Zealand
and a track record of compliance in a highly regulated environment, we know a great deal
about host responsibility and harm minimisation. We believe the skycitycasino online
gaming site offers customers an opportunity to enjoy playing in a safe, secure environment
with a brand they know and trust and we will be striving to set the benchmark for any
regulation in the future.”

Mr Stephens says SKYCITY will be making a conservative entry to online gaming and will
actively avoid the sales and marketing tactics adopted by some existing overseas
operators.
“This means SKYCITY is not initially expecting to monetise materially from this initiative –
it should be seen more as a strategic entry into a space that we believe has long-term
relevance.”
“We spent a lot of time evaluating and selecting a suitable partner and had a number of
options to choose from. We believe GiG provides the right balance of experience, coupled
with a new software platform relevant to the future and access to high-quality content for
online gaming customers. GiG has experience in partnering with land-based casinos
through their relationship with Hard Rock International and is licensed in some of the
world’s most regulated gaming markets, including the United Kingdom and the United
States.’’
Mr Stephens says SKYCITY has kept its New Zealand regulator, the Department of Internal
Affairs, and other key stakeholders abreast of its plans. To ensure compliance with current
New Zealand law, a SKYCITY subsidiary company incorporated in Malta will contract with
GiG to operate the online casino site from Malta.
“While ultimately a regulated online gaming market is the best solution, we think this is a
great first step that allows us entry to a new industry and gives our customers an option
they have been looking for,’’ Mr Stephens says.
As part of the agreement, GiG will provide a full-suite online casino solution which includes
a t echnical platform, gaming content, managed services and front-end development. The
arrangements will be structured primarily as a revenue share arrangement, with the
majority of operating costs variable or directly linked to revenue generation. The SKYCITY
subsidiary in Malta will assume a modest level of on-going fixed costs, such as staff,
technical support and regulatory and compliance. If SKYCITY ultimately becomes a
licensed operator in a regulated New Zealand online casino market, the agreement with
GiG allows for SKYCITY to assume the B2C (i.e. customer facing) components of the
business in the same way as it does for its current land-based activities.
The skycitycasino online gaming business will be managed by an Online Director (Steve
Salmon) based in Europe. Mr Salmon has a wealth of experience in online casino gaming
and wagering, including senior leadership roles with industry leaders such as Rank Group
plc, a leading multichannel gaming operator in the United Kingdom, and High5 Games, a
leading content creator for the land-based, online and social gaming markets.
Although SKYCITY is not anticipating meaningful incremental earnings from its online
business pre-regulation of the online casino market in New Zealand, Mr Stephens felt that
“consistent with our group strategy, longer-term we see an exciting opportunity to grow
and diversify our earnings through provision of a multichannel offering to gaming
customers both online and at our land-based casinos in New Zealand.”
*2017 Regulus Report
ENDS

For more information please contact:

Media Investors and analysts
Colin Espiner
GM, Communications
DDI: +64 9 363 6467
Mobile: +64 27 504 6294
E-mail: Colin.Espiner@skycity.co.nz

Ben Kay
GM, Corporate Development & Investor
Relations
DDI: +64 9 363 6067
E-mail: ben.kay@skycity.co.nz


About GiG
GiG (GIG.OL/GIGSEK) is an established online casino platform provider and technology
company based in Malta (with offices in Scandinavia, Spain and Gibraltar) and is listed on
both the Oslo and Stockholm stock exchanges.