SKYCITY Entertainment Group has scored a major coup, with the Northern Territory Government agreeing to extend its Darwin casino licence for up to 20 years.
The New Zealand casino operator, which also runs the Adelaide casino, said its Darwin licence had been extended yesterday by a further 11 years from June 30, 2015, to June 30, 2026.
Under the agreement, from 2011, and at intervals for five years thereafter, the licence term is subject to extension for a further five years, providing licence conditions are met.
The company said: "The extension of the formula means that the term of the casino licence will, at any time, be no less than 15 years and up to 20 years."
Skycity chief Evan Davies said it was a positive outcome for the company and provided investment certainty.
"Skycity's strategy is to invest in existing facilities and diversify our entertainment interests while maintaining strong capital management," he said.
"This agreement gives us the security to plan development of the Skycity Darwin property to meet growing customer demand, within the framework of our investment criteria."
The Darwin casino is the company's biggest earnings driver in Australia.
News of the licence extension pushed the stock up 4c to a near record high of $4.62.
The stock has been trading strongly for the past few months amid speculation it might be a takeover target. The company has also been having a solid profit run, up 13 per cent to $120.1 million in the past financial year.
Skycity said it now planned to proceed with a $30 million refurbishment of its Darwin beachfront property.
"Our goal is to ensure Skycity Darwin is a world-class entertainment resort that will attract tourists and appeal to our regular customers," Mr Davis said.
"The growth in Darwin shows no sign of abating, with the economy predicted to expand 6.2 per cent this year.
"Tourism is also growing rapidly, with 16 per cent more Australian tourists and 5.7 per cent more international tourists visiting Darwin in the past year."
The refurbishment work is due to be completed by mid-2008.