Ireland and New York seem to have successfully introduced smoking bans in public places and next it will be the turn of New Zealand. The Smoke free Environments (Enhanced Protection) Amendment Act means that from December 10th smoking will be prohibited in all workplaces, including pubs, clubs and casinos.

In the ‘City of Sails’ – Auckland - where there are more boats per head of population than anywhere else in the world, it has been estimated that the ban may cost Sky City Casino in the region of $10M before people get used to it. Any customers who are smokers would have the inconvenience of being unable to smoke on the casino floor but several smoking balconies have been built. An initial drop in revenue is forecast to be recovered over the following year.

According to the new Sydney-based chairman at Sky City there are new assets in place, completed and in the pipeline, to be introduced over the next two to three years. One expansion already planned is the prospective April inauguration of the group’s five star Grand Hotel in Auckland. Despite the smoking ban, bottom-line profits for the next financial year should be in the region of $117M. However, the effect of the ban would probably continue into the 2006 financial year.

Sky City Casino in Auckland has 60 gaming tables and 1300 slot machines with an additional 20 tables and 100 slot machines in the Alto Casino & Bar. There is also an exclusive Members Club by invitation only. The mega jackpot Sky High machines have already made a payout of NZ$2M.

Sky City Leisure Limited is a wholly owned and managed subsidiary of Sky City Entertainment Group Limited. Its flagship property is the Sky City Metro in Auckland, New Zealand’s most visited cinema complex. The company is expanding its many cinemas, including a new multiplex at Tauranga. Sky City Entertainment has two other casinos in New Zealand: Sky Alpine in Queenstown that should break even this year and 70% owned Sky Riverside in Hamilton that is trading well ahead of pre-opening calculations.

In Australia the company has casinos in Darwin and Adelaide. Sky City Casino in Adelaide’s historic Railway Station building hosts one of the world’s richest blackjack tournaments. It does not face a smoking ban there until mid-2007 and by this time the company should know exactly what needs to be done to alleviate any negative results.

News from last Friday’s Annual Meeting at the new Sky City Auckland Convention Centre would suggest that the company, having factored in the impact of the smoking ban, is set to continue pleasing its shareholders.

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