Ann: GENERAL: SKC: New Adelaide Regulatory Framew

• Release Date: 19/12/12 10:52
• Summary: GENERAL: SKC: New Adelaide Regulatory Framework & A$300m Redevelopment
• Price Sensitive: No
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SKC
19/12/2012 08:52
GENERAL

REL: 0852 HRS SKYCITY Entertainment Group Limited (NS)

GENERAL: SKC: New Adelaide Regulatory Framework & A$300m Redevelopment

SKYCITY Entertainment Group today announced that it has reached an agreement,
subject to approvals, regarding the future operating, regulatory and taxation
environment for Adelaide Casino.

"After two-and-a-half years of negotiations, we are delighted to reach
agreement with the South Australian Government which levels the playing field
with our regional competitors, and allows us to offer a competitive and
contemporary gaming and entertainment offering," SKYCITY Chief Executive
Nigel Morrison says.

The agreement remains subject to legislation and approval from the
Independent Gaming Authority (IGA). Once approvals have been received,
changes will be made to the following agreements:
-the Approved Licensing Agreement (ALA)
oaddresses key regulatory and operating terms and conditions
-the Casino Duty Agreement (CDA)
ospecifies applicable casino taxes and duties
-other enabling legislation and gambling regulations

The ALA and CDA are expected to take effect from 1 July 2013 with an expiry
date of 30 June 2035. This represents a 20 year extension to the current
exclusivity expiry date of 30 June 2015. Adelaide Casino licence doesn't
expire until 2085.
Key features of the agreement are:
?An extension of exclusivity provisions to 30 June 2035
-Adelaide Casino will have exclusivity for Table Games, Automated Table Games
and Premium VIP Gaming in the State of South Australia
?The Agreements provide for compensation to be paid to SKYCITY for the impact
of changes by the Government to the exclusivity granted to SKYCITY or to the
Casino tax rates
?Additional Gaming Product
-Agreement enables Adelaide Casino to increase its gaming capacity:
-Increase in number of Electronic Gaming Machines
oApproval to increase total no. of EGM entitlements by 505, up to 1,500
oRight to purchase additional EGM entitlements through Approved Trading
Scheme (ATS)
oIf unable to acquire 505 EGM entitlements through the ATS, SKYCITY may
purchase remainder (up to 300 non-tradable premium gaming machine
entitlements) from Government
-Increase in total number of Table Games from 90 to 200
oIncludes up to 300 Automated Table Game terminals, with 20 terminals
equivalent to 1 Table Game
?New Taxation Regime
-New VIP EGM gaming tax rate of 10.9%
-Increase in non-VIP EGM gaming tax rate from 34.4% to a rate equivalent to
the average rate of gaming tax paid by SA Hotels in each preceding year -
subject at all times to a maximum of 41%
-Increase in non-VIP table games gaming tax rate from 0.9% to 3.4%
-VIP table games gaming tax rate remains at 0.9% (Domestic and International)

-Casino taxes will be enshrined in a new Casino Duty Agreement
?Cashless Gaming
-Adelaide Casino will be able to install card based Cashless gaming
technology for all EGMs, Automated Table Games and Table Games
-Will be linked to appropriate host responsibility measures
-Ticket-In Ticket-Out (TITO) will be permitted in VIP Premium gaming areas
?Other operational reforms
-Ability to purchase gaming product that has been compliance tested and
approved by regulators for use in other Australian states allowing for new
exciting games and features, consistent with regional peers
?VIP Premium Gaming
-Exclusive to Adelaide Casino in the State of SA
-Both Table Games and EGMs
-VIP Premium players will be defined to include:
oInternational visitors (tourists and gaming program players)
oInterstate visitors (tourists and gaming program players), and
oLocal SA residents playing above agreed annual expenditure thresholds and
meeting harm minimisation requirements
-Ability to offer premium gaming products only in VIP Premium rooms
oAllows for higher max bets, jackpots and cashless gaming transaction limits,
and Ticket-in Ticket-out (TITO)
oPlayers must be registered members of the approved loyalty program and meet
certain expenditure, host responsibility and behavioural criteria
?Leading Responsible Gaming Practices
-SKYCITY is a recognised leading Responsible Gaming provider
-As part of this agreement, SKYCITY will:
oImplement a system of voluntary pre-commitment on all EGMs and Automated
Table Games facilitating more 'informed decision making'
oImplement a predictive modeling risk management tool to help identify
customers who may be at risk of problem gambling
?SKYCITY will make a payment of $20 million to the State Government

"This agreement regarding the future operating, regulatory and taxation
framework delivers the necessary certainty for SKYCITY to commit to an
investment of over A$300 million to transform Adelaide Casino into a world
class integrated entertainment complex.
"While development concepts are still being finalised, we will be building
Adelaide's first 6 star boutique hotel, celebrity and signature restaurants,
new car park facilities and world-class VIP gaming experiences featuring our
'Horizon' branded international suites with adjoining private gaming salons."

ENDS
For more information please contact:

CORPORATE AND INVESTORS
Aaron Morrison
GM Business Development and Investor Relations
 +64 21 246 5079

MEDIA
GJ Thompson
GM Corporate Communications
+64 21 392 571

Kelly Armitage
Senior Corporate Communications Advisor
+64 27 213 5079
End CA:00231335 For:SKC    Type:GENERAL    Time:2012-12-19 08:52:16