SkyCity to sell entire shareholding in GiG

• Industry News
• 26. 06. 2024.
• Dusan Savic

SkyCity Entertainment Group has made an agreement to sell all its shares in Gaming Innovation Group. Its shares had not been a part of the European-based iGaming operator’s core operations and were considered non-essential.

The proceeds will be utilised to pay down debt and adopt a different approach to capital management. The two companies will still cooperate due to the operator’s relationship with SkyCity Online Casino.

New direction

SkyCity had a shareholding of about 10% in GiG, and it is expected to generate about $55m upon deducting brokerage fees and legal costs. The shareholding was acquired in April 2022 for nearly $40m. The former CEO of SkyCity, Michael Ahearne, joined the GiG board of directors at the time.

However, SkyCity has been advised to enter an unconditional agreement and sell all the shares. The officials explained that these shares had not participated in the group’s core operations. Hence, they were “not considered strategically necessary,” and the company decided to make the move. SkyCity added that it intends to use the money from the sale to pay off its current debts. Such action is part of the group’s new plans regarding capital management.

The divestment comes as GiG is to officially split into two separate firms, GiG Media and Platforms & Sportsbook, with the former rebranding to Gentoo Media. SkyCity noted it has maintained “its valuable relationship“ with GiG via the operation of SkyCity Online Casino, located in Malta.

Successful operations

SkyCity was the second-largest shareholder in GiG before the sale. The company runs entertainment complexes in Auckland, Hamilton, Queenstown and Adelaide. Each one contains casino gaming facilities, bars, and restaurants, as well as first-rate hotel accommodations in Auckland and Adelaide.

Moreover, SkyCity Online Casino provides a top-notch iGaming experience to New Zealanders. It offers an online gaming platform with 2,450 games and a mobile-first user experience while continuously increasing safety features. GiG operates the casino out of Malta on behalf of SkyCity Malta Limited.

The latter is a subsidiary of the SkyCity Entertainment Group, run by a Europe-based managing director. GiG provides a complete iGaming solution with a technical platform, front-end development, managed services, and gaming content.

Troubled waters

The company has been on the map since 1994, with a more-or-less successful business for three decades. Numerous lucrative ventures have happened during this period, but the company has also seen darker times. SkyCity Casino management admitted to multiple breaches of New Zealand’s anti-money laundering laws from 2018 to 2023. Three executives left since the beginning of 2024, while the company suspended dividends this June.

Even though several legal cases and severe fines placed the company under stress, the officials expect it to bounce back. SkyCity reported the expected group earnings of between $458m and $466m before all deductions. Furthermore, the net profit for 2024 should amount to between $196m and $204m.