A Forsyth Barr analyst says SkyCity Entertainment Group's underperforming casino in Adelaide will make big gains following a deal struck with the South Australian Government.
The state government has extended Sky's Adelaide licence by 20 years and will allow it to operate 500 extra gaming machines, after amendments to the gambling laws were passed.
SkyCity will now spend $A300 million redeveloping the casino.
The deal is similar to the one SkyCity struck with the New Zealand Government.
Forsyth Barr director of research Jeremy Simpson said South Australia's gambling regulations are the toughest in the country and the casino had not been doing well because of the restrictions.
He said SkyCity has effectively negotiated a level playing field in Australia, which will be positive for the company.
Mr Simpson said it's a significant change and perhaps the South Australian government has realised that it's missing out by having regulations that are tougher than those in other states.
He said the money spent redeveloping Adelaide's casino will significantly improve its performance in the long term.
Mr Simpson suggested that SkyCity should start to see some changes in the existing gaming facility within about nine months.
