SkyCity reports weaker FY26 earnings as gaming revenue continues to fall

SkyCity Entertainment Group has reported a weaker financial performance for the year ended 30 June 2026, with lower gaming revenue and higher operating expenses placing pressure on earnings. The New Zealand-based entertainment and casino operator said underlying EBITDA declined 22.3% year on year to NZ$181.6 million.

Underlying revenue was NZ$822.7 million, representing a 0.3% decline from the previous year. The results reflect a challenging trading environment for the group's gaming operations while non-gaming activities delivered growth during the period.

SkyCity released its FY26 annual results on 20 August 2026. The company said the performance of its casino business was affected by the implementation of account-based or carded play, weaker premium gaming conditions and softer visitation and spending during the fourth quarter.

The figures present a mixed picture across SkyCity's business. While casino revenue weakened, growth in hotels, food and beverage operations and convention-related activity provided some offset.

Gaming revenue remains under pressure

Group gaming revenue declined 5.9% in FY26. The reduction was a major factor behind the decline in underlying earnings and highlights the continuing pressure on the group's core casino activities.

SkyCity attributed the weaker gaming outcome to several operating factors rather than identifying a single cause. The introduction of carded play changed the way customers interacted with casino facilities while premium gaming activity also remained below previous levels.

The company additionally experienced lower visitation and customer spending in the final quarter of the financial year. Because gaming remains a significant component of SkyCity's overall business, the decline had a direct effect on group profitability.

At the same time, non-gaming revenue increased 13.4%. The opening of the New Zealand International Convention Centre in Auckland was an important contributor to that growth.

Hotel operations together with food and beverage activities also supported the group's non-gaming performance. This helped reduce some of the impact created by the decline in casino revenue but was not sufficient to prevent a significant fall in underlying earnings.

Operating costs increase across the group

SkyCity's operating expenses increased 8.4% during FY26. The company identified several factors behind the increase including costs associated with the New Zealand International Convention Centre, investment in online gaming, higher labour expenses and increased technology and compliance spending.

The higher cost base placed additional pressure on margins at a time when gaming revenue was already under strain.

For FY26, SkyCity reported net profit after tax of NZ$18.2 million, down 37.6% from the previous year. Underlying net profit after tax fell 46.9% to NZ$38 million.

The distinction between reported and underlying results remains relevant because the company's reported financial performance also reflects other accounting factors affecting the period. The underlying figures provide management's preferred view of operational performance.

SkyCity Auckland delivers mixed results

The Auckland operation remained the group's largest earnings contributor but recorded a substantial decline in gaming revenue during FY26.

Gaming revenue at SkyCity Auckland fell 11.3% to NZ$317.2 million. The decline was partly offset by a 16% increase in non-gaming revenue to NZ$181.4 million.

The increase in non-gaming income reflects the contribution of the group's broader hospitality and convention activities. However, the growth was not enough to prevent underlying EBITDA at the Auckland property from declining 14.2% to NZ$179.8 million.

The Auckland result underlines the current transition in SkyCity's business mix. The property continues to rely heavily on its casino operations while simultaneously expanding its convention, hotel, food and beverage offering.

NZICC adds scale to non-gaming operations

The New Zealand International Convention Centre was one of the most significant developments for SkyCity during the reporting period.

The convention centre opened on 11 February 2026 and hosted 141 events during the remainder of FY26. SkyCity said approximately 100,000 visits were recorded between the opening date and the end of the financial year.

The company also reported an event pipeline for FY27 that is expected to attract approximately 350,000 visits. That forward pipeline provides an opportunity for continued growth in non-gaming activity at the Auckland precinct.

A larger convention business can also support associated hotel occupancy, food and beverage spending and wider activity across the property. As a result, the NZICC represents an important part of SkyCity's strategy to broaden its revenue base beyond gaming.

The contribution from the venue will nevertheless need to be assessed alongside the costs required to operate and support the facility as it moves into a full year of activity.

Adelaide operation moves into strategic review

SkyCity's Adelaide property experienced another difficult period. Underlying EBITDA declined 31.5% to A$19.5 million despite revenue being broadly stable.

The company also recorded a write-down of A$43 million on the Adelaide property. SkyCity said it plans to undertake a strategic review of its Adelaide operations during the first half of FY27.

The announcement does not specify the eventual outcome of the review. The process is expected to examine the property's performance and value as part of the company's broader planning for the new financial year.

Importantly, the planned review should not be interpreted as a predetermined decision about the future structure of the Adelaide business. At this stage, SkyCity has disclosed that the operation will be assessed strategically without announcing a specific course of action.

This approach allows the company to evaluate the property's performance while considering market conditions and the wider requirements of the group.

SkyCity targets NZ$30 million in cost savings

SkyCity has not issued formal FY27 financial guidance, citing continuing macroeconomic uncertainty.

The company has however established a cost reduction target of NZ$30 million for FY27. The savings programme is expected to form part of management's response to the current earnings environment.

The focus on costs comes as SkyCity deals with declining gaming revenue, higher compliance and technology expenditure and additional operating requirements associated with its non-gaming assets.

Delivering the targeted savings could become an important factor in stabilising earnings if casino revenue remains under pressure.

At the same time, management must balance cost control against the need to maintain appropriate investment in customer operations, regulatory compliance, technology and the group's developing convention business.

New Zealand online casino regulation creates a new opportunity

SkyCity is also preparing for participation in New Zealand's regulated online casino market.

The regulatory environment changed significantly during 2026 following the commencement of the Online Casino Gambling Act. The Department of Internal Affairs is implementing a phased licensing framework that is expected to become fully operational during 2027.

The government framework provides for up to 15 online casino licences. Expressions of interest opened in July 2026 and closed on 14 August with an auction expected in September before licence applications proceed.

For SkyCity, the emerging regulatory framework represents a potential new channel outside its land-based casino operations. The company has indicated that preparations for online gaming will continue alongside its wider efforts to manage costs and improve operational performance.

However, the market remains subject to formal licensing requirements and regulatory controls. SkyCity's preparations should therefore be viewed as part of a regulatory and commercial process rather than as confirmation that the company has secured an online casino licence.

The regulatory regime also places significant emphasis on consumer protection, harm minimisation, compliance and advertising restrictions. Those requirements will form an important part of any operator's market strategy.

FY27 begins with several strategic priorities

SkyCity enters FY27 with several areas requiring management attention.

The company must first address the continued pressure on gaming revenue, particularly at its Auckland and Adelaide properties. It also needs to execute the planned cost savings without undermining long-term operational capabilities.

The performance of the NZICC will be another key consideration as the venue progresses through its first full financial year. A stronger pipeline of events could support higher non-gaming revenue and broader customer activity across the Auckland precinct.

The Adelaide strategic review is also likely to remain an important part of the company's capital allocation and property strategy.

Meanwhile, online gaming preparations could provide longer-term growth potential as New Zealand establishes its new regulated framework.

What the FY26 results mean for SkyCity

SkyCity's FY26 results illustrate the scale of the transition currently taking place across the business.

Gaming remains the principal source of pressure, with group gaming revenue declining 5.9% and Auckland gaming revenue falling 11.3%. At the same time, non-gaming revenue increased 13.4% at group level with the newly opened NZICC contributing to the change in the company's revenue mix.

The higher operating cost base adds another layer of complexity. Spending on technology, compliance, labour and the convention centre may support the group's long-term development but has increased pressure on near-term earnings.

The planned NZ$30 million cost savings programme therefore carries considerable importance for FY27. At the same time, SkyCity's decision not to provide formal earnings guidance demonstrates the continuing uncertainty surrounding the operating environment.

The company will also need to navigate the emerging online casino regulatory framework carefully. Any future participation in the New Zealand market will depend on regulatory approval and compliance with the conditions established under the new regime.

Conclusion

SkyCity's FY26 performance reflects a business operating through a period of significant change. The decline in gaming revenue, increase in operating expenses and weaker profitability demonstrate the pressure facing the group's traditional casino operations.

Yet the results also show that SkyCity is developing additional sources of activity. The growth in non-gaming revenue and the early contribution from the New Zealand International Convention Centre provide evidence of a broader operating model, even though those gains have not yet fully compensated for the downturn in gaming.

The Adelaide strategic review and the NZ$30 million cost-saving target give management two immediate priorities for FY27. At the same time, preparations for New Zealand's regulated online casino market could become strategically important as the licensing framework moves forward.

The next financial year will therefore be defined by execution. SkyCity will need to manage costs, strengthen property performance and build its non-gaming operations while maintaining regulatory compliance. The company's FY26 results do not provide a simple growth story, but they do illustrate a business repositioning its operations in response to changing market conditions and a developing regulatory landscape.

FAQs

What were SkyCity's underlying EBITDA results for FY26?
SkyCity reported underlying EBITDA of NZ$181.6 million for the year ended 30 June 2026, representing a 22.3% year-on-year decline.

Why did SkyCity's gaming revenue decline in FY26?
SkyCity said gaming revenue was affected by the rollout of carded play, weaker premium gaming activity and lower visitation and spending during the fourth quarter.

How did SkyCity's non-gaming revenue perform?
Group non-gaming revenue increased 13.4% during FY26, supported by the opening of the New Zealand International Convention Centre as well as hotel and food and beverage activities.

What happened at SkyCity Auckland?
Gaming revenue at SkyCity Auckland fell 11.3% to NZ$317.2 million while non-gaming revenue increased 16% to NZ$181.4 million. Underlying EBITDA declined 14.2%.

What is happening with SkyCity Adelaide?
SkyCity Adelaide recorded a 31.5% decline in underlying EBITDA to A$19.5 million. The company also recognised a A$43 million write-down and plans a strategic review in the first half of FY27.

How much does SkyCity plan to save in FY27?
SkyCity has set a cost-saving target of NZ$30 million for FY27 as part of its efforts to improve operating performance.

Has SkyCity provided FY27 financial guidance?
No. SkyCity has not provided formal FY27 guidance and cited macroeconomic uncertainty as a reason for not doing so.

Is SkyCity preparing for New Zealand's regulated online casino market?
Yes. SkyCity has said it is continuing preparations to participate in New Zealand's regulated online casino market as the new licensing system is implemented.

When is New Zealand's regulated online casino market expected to become fully operational?
The Department of Internal Affairs expects the regulated and licensed online casino framework to become fully operational in 2027, subject to the staged licensing process.

What is the main issue facing SkyCity in FY27?
A key challenge will be managing weaker gaming revenue while controlling costs, improving property performance and developing its non-gaming and potential online operations within the applicable regulatory framework.