Good morning, ladies and gentlemen. I am Julian Cook, Chair of the SkyCity Board, and it is my pleasure to welcome you all to the 2024 SkyCity Annual Meeting. Thank you for joining us online and in person today. For those attending in the SkyCity Theatre, in the event of an emergency, please remain calm and follow the instructions of our Theatre ushers and the SkyCity Security Officers. They will direct us to the nearest emergency exits. Moving to the order of business for the meeting today, I declare the 30th Annual Meeting of SkyCity open and confirm that the meeting has been duly convened with a quorum present. Firstly, some administrative matters for those attending virtually today. Instructions on how to participate are set out in the Notice of Meeting and the Virtual Meeting Guide available on Computershare's meeting platform.
Shareholders can ask questions and vote on the resolutions to be put to the meeting on their selected devices. However, bondholders who are not also shareholders are not entitled to vote on the resolutions or ask questions. Shareholders can submit questions on their selected devices at any time. If your question relates to one of the resolutions set out in the Notice of Meeting, please note in your question which resolution it relates to. Note that your questions may be moderated, or if we receive multiple questions on one topic amalgamated together, due to time constraints, we may not be able to answer all of your questions. Voting today will be conducted by way of poll on all items of business. Online voting will open shortly for all resolutions.
If you are eligible to vote at this meeting, the resolutions and voting options will appear on your screen at that time. You can vote for all resolutions at once or by each resolution. I now declare voting open online on all items of business. You could submit your votes at any time. I will give you a warning before I move to close voting. In the event you experience any technological issues today, a recording of today's meeting will also be available on the company's website following the meeting. The minutes of the 2023 SkyCity Annual Meeting held on 27 October last year have been posted on the company's website and are held by the company secretary. These minutes are available for inspection by any shareholder or bondholder should they wish to do so.
I will now introduce the SkyCity Board and management in attendance in the SkyCity Theatre today. In attendance to my left are Jason Walbridge, SkyCity's Chief Executive Officer, Jo Wong, SkyCity's General Counsel and Company Secretary, and SkyCity Directors Donna Cooper, Chad Barton, Glenn Davis, David Attenborough, and Kate Hughes. Also in attendance is Pip Cameron, our lead audit partner from PricewaterhouseCoopers. The business of the meeting today is as set out in the Notice of Meeting. Firstly, I will present my chair's address. SkyCity's Chief Executive Officer Jason Walbridge will then summarise SkyCity's performance during the past financial year and provide an update on current trading. Donna Cooper, the chair of the newly established Board Transformation Subcommittee, will provide an overview of the activities of that subcommittee and the company's transformation program.
We will then move to the previously notified resolutions for consideration by the meeting, including any questions and discussion in respect to those resolutions. A general question and answer session will then follow on matters arising to management and the operations of the company. Finally, at the close of the meeting, those attending today are invited to join the SkyCity Directors and Management for light refreshments in the theater foyer and possibly a photo with the Bledisloe Cup if you have seen it already. Now, I will turn to my chairman's address. The year since our last annual meeting has been a busy one. Over this period, we have worked to resolve a number of matters relating to historical regulatory breaches, repurchase the Auckland Carpark concession, and put in place a new Chief Executive Officer and Chief Financial Officer to lead the business.
Trading conditions within the business have been challenging over the past financial year due in large part to a weaker New Zealand economy. Notwithstanding this, we are pleased to have opened the Horizon by SkyCity in August of this year, a key milestone towards the completion of the New Zealand International Convention Centre, which is also progressing well towards its own completion and opening. At the same time, it is pleasing to see government proceeding at pace with the development and implementation of the regulatory framework for online casinos within New Zealand. Less pleasingly, as you will know, we have suspended dividends in light of the challenging trading conditions.
We acknowledge the disappointing outcome for shareholders currently in terms of the share price and dividend suspension, but we do remain committed to returning to paying dividends as soon as this is prudent, whilst maintaining the strength of the balance sheet. Overall, the board's perspective is that the business has made good progress throughout the year. The resolution of a number of historical regulatory breaches has required considerable focus, as has the establishment of programs to overhaul and improve our performance in preventing money laundering and problem gambling. The board's view is that the business's prospects will improve as we work through the regulatory improvement programs and as NZICC and Horizon Hotel begin to contribute to earnings, and we see the benefit of an improvement in trading conditions into 2025.
I will now touch in a little more detail on our regulatory situation as this has been and continues to be a priority focus for SkyCity. Over the past financial year, the Department of Internal Affairs launched action against our New Zealand casinos in relation to historical breaches of both responsible gaming and anti-money laundering obligations. In May this year, we reached an agreement with the DIA to resolve the civil penalty proceedings for historical non-compliance with New Zealand anti-money laundering laws. This agreement has now been approved by the High Court and includes a pecuniary penalty against SkyCity of NZD 4.16 million. In July this year, SkyCity reached an agreement with the Secretary for Internal Affairs to resolve the application to temporarily suspend SkyCity's New Zealand casino operator's license for historical non-compliance with our host responsibility obligations.
As part of this agreement, SkyCity closed its Auckland gaming areas for a five-day consecutive period in September. In respect of Adelaide in June this year, the Australian Federal Court approved our agreement with AUSTRAC to resolve civil penalty proceedings for historical non-compliance with Australian anti-money laundering laws. The AUD 67 million civil penalty payment was paid by SkyCity in July 2024. Our business improvement program in Adelaide, the Building a Better Business program, has now been approved by the regulator, which is Consumer and Business Services. However, the regulator's independent review remains open, and there is no resolution to this as yet. Jason will provide more detail on our progress in Adelaide shortly. SkyCity's historical performance at meeting its regulatory obligations is clearly not acceptable. This is a long-standing issue, and as such, has already taken considerable time and investment.
Since 2021, there has been significant progress in this space, with examples of key actions including a full refresh of the SkyCity Board, including the recruitment of directors with specialist risk expertise, creation of a dedicated Board Risk and Compliance Committee to oversee anti-money laundering, host responsibility, risk management, and other compliance obligations, appointment of a Group Chief Risk Officer and moving the anti-money laundering and host responsibility teams' reporting lines directly to that position, adoption of a three-lines of accountability framework across SkyCity, increasing capacity in our financial crime risk and compliance and host responsibility teams with 113 employees as of 30 June 2024, significant enhancement and investment in our internal anti-money laundering and host responsibility resourcing capability processes and systems, and reducing risk and complexity by changing the way we operate to reflect our lower risk tolerance, including limiting the ways in which customers can transact with us.
We have also seen a refresh in key leadership positions with a new Chief Executive Officer and Chief Financial Officer, and in Adelaide, a new Managing Director and General Manager of Finance alongside the new Chief Risk Officer who commenced in 2023. Since commencing, our Chief Risk Officer has undertaken a comprehensive review of our historical shortcomings. At a high level, these can be summarized as insufficient importance placed on compliance within the business, lack of investment in systems and people to support this, and a lack of capability and expertise in these areas at all levels. Our regulators, shareholders, customers, and wider stakeholders need to have confidence that we fully understand the causes of these historical failings, that we have a coherent plan to address these, and that our culture will put compliance ahead of short-term profits.
We have now put into place a multi-year transformation program which will embed improved practices through all parts of the business. Within the transformation program, the Adelaide business has its own specific program called Building a Better Business. Both of these programs will take around three years to complete. These are critical pieces of work for the business and will continue to close gaps we have in our compliance and risk systems in Adelaide and New Zealand. Significant resource has been allocated to this program, and given its importance, we have established a Board Transformation Subcommittee to oversee and monitor its progress. This committee is chaired by Donna Cooper, who will give an overview of its activities later in the meeting.
An important part of our transformation program is the deployment of facial recognition technology now embedded across our casinos with ongoing enhancements and the impending implementation of mandatory carded play. Mandatory carded play will be deployed across our New Zealand casinos by mid-2025 and at SkyCity Adelaide by early 2026. This will take our customer care to a new level, allowing both SkyCity and our customers to monitor lengths of play in real time. If a customer plays for too long, quite simply, their card will be disabled. While this is an important and exciting development, the technological challenges to deliver mandatory carded play are substantial and require significant and ongoing investment, both in terms of capital and workforce resource.
We are committed, however, to implementing mandatory carded play as it will significantly increase our visibility and control of play and simplify many parts of our anti-money laundering and host responsibility operations. Jason will talk to this significant initiative shortly. In the coming year, we will implement a revised staff code of conduct and deliver the supporting training to drive improvement in the underlying culture of SkyCity. We will now play a short video that launched internally earlier this week to introduce staff to the importance and the why behind the code.
Each day is a fresh start, a chance to make our mark, write our own story. We might think we know what to expect, but no one knows exactly what's coming. Each day we face many decisions, some small, some big, that can change our course. That's where SkyCity's code of conduct comes into play.
Each decision is a choice we make, and making the right choice isn't always easy. But if you get it right, you prove yourself as standing for something. Our code brings to life our values. It's there to guide us in those times when the way forward isn't exactly clear. Sometimes what might seem like harmless fun in the moment has the ability to cause hurt down the line. Simply asking yourself, "Would I be okay telling my family about this?" can be enough for us to think again and get the choice right. The SkyCity code has clear practices such as not accepting tips while dealing, as well as general principles like acting with integrity and courage. What does that look like? Do my actions show I care for our people?
We want our customers to have fun while they're with us, but we need to look after them too. We also want to take care of our communities, where a little help can go a long way. Because while each person's life is their own story, no one truly walks alone. And the people we live with and work with are there to share and enrich all of our journeys.
A primary objective over the coming years is to ensure we have strongly performing risk management systems, a culture which prioritizes compliance with our obligations and customer care, and a business which is seen as a good corporate citizen worthy of retaining its casino licenses. We have made good progress, but there is more work to do.
We are wholly committed to meeting the expectations required of us and building back trust, and we have the plans, people, and the necessary investment to achieve this. As I noted earlier, our results for the year reflect the challenging economic environment faced by SkyCity and its customers, particularly in New Zealand. While our earnings were lower than last year, we were pleased that the level of visitation remained stable. This gives us confidence we are providing the right product and offering which our customers want, and we remain confident that any improvement in the economic environment will ultimately flow through to a positive response in our underlying earnings. Jason will talk more to the FY2024 results shortly. As I've mentioned, and as I've already mentioned in June, the board determined to suspend the FY2024 final dividend and dividends for the 2025 financial year.
While this is clearly disappointing for shareholders, it was a prudent course of action to maintain a resilient capital structure. 2024 saw a deterioration in trading conditions, on top of which cash flows were impacted by payment of regulatory fines, the car park concession repurchase, and capital expenditure on the NZICC. These factors are expected to further impact debt levels in 2025 and were a key consideration behind the dividend decision. Nevertheless, the board remains committed to returning the company to a position of paying dividends as soon as it is prudent to do so. Jason will talk more to the current state of the balance sheet shortly. Moving forward, the company is committed to adopting a more conservative capital structure in line with a triple B flat credit rating. This is a medium-term objective.
Increased earnings from growth opportunities within the business, such as the new Horizon by SkyCity hotel and NZICC and online gaming, combined with reducing capital expenditure as the NZICC nears completion, will support achieving this objective. The financial year ahead continues to reflect a challenging economic environment, particularly in Auckland. However, despite these challenges and the work that is still to be done, there is a great deal to look forward to and to be excited about over the next 12 months. We remain one of New Zealand and Australia's largest tourism, hospitality, and entertainment groups with four hotels, four casino properties, one online casino, and over 30 restaurants and bars across our precincts. The opening of the new Horizon by SkyCity hotel brings our total number of hotel rooms in Auckland alone to nearly 1,000.
Collectively, across the group, we host more than seven million visitors each year and employ more than 4,500 people, a number that is set to increase to more than 5,000 with the opening of NZICC. This is also expected to bring in a further 33,000 international visitors to Auckland every year. Our annual contribution to the New Zealand and Australian economies is around NZD 1 billion, and since opening in 1996, SkyCity has contributed more than NZD 77 million to local community groups, organizations, events, and initiatives through the SkyCity New Zealand Community Trusts. None of this would happen without the dedication, commitment, and pride of our people. The executive board and myself would like to extend a heartfelt thanks to them, our customers, and other stakeholders for their continued support.
There is much to be excited about at SkyCity as we work hard to deliver an industry-leading safe environment destination, safe entertainment destination that delivers great outcomes for our people, customers, regulators, shareholders, communities, and local economies. With that, ladies and gentlemen, I will hand over to Jason for a more fulsome view of operations and, importantly, his views on the future potential of the business after his first three months in the role.
[Foreign language] Jason Walbridge [Foreign language] . Good morning, everyone, and welcome again to SkyCity Entertainment Group's annual meeting, my very first for the company as your Chief Executive Officer. I came back to New Zealand with my family to take up the role after being away for 23 years.
Like many expats, I'm the proudest of Kiwis, so it's exciting to be home and just as exciting to be working for SkyCity. It's also another form of homecoming for me. I joined the casino industry with Aristocrat here in Auckland when the Sky Tower was literally coming out of the ground. It's been a full circle moment for me. SkyCity is an iconic brand and business with enormous potential to deliver positive outcomes for a wide range of stakeholders, including you, our shareholders, over the coming years. Since starting in July, I've met many of our people and visited all of our properties, and I've just been incredibly impressed with the energy of our team, the pride in their work, and the appetite to meet the challenges and the opportunities ahead.
The quality of our assets compares to many of the best casino properties I have visited in other parts of the world, and I've had the privilege to visit many of them. What I've seen in my first three months has reinforced for me that SkyCity has significant value in its people and properties, and this provides a solid foundation to build on. I am optimistic about the future, but I want to be clear about the challenges we face. We operate in extremely complex regulatory environments. They are changing, and it's important to acknowledge, though, that these changes are in line with what's happening in other parts of the world. Throughout my career, I've learned that being open and transparent is the best approach with regulators, no matter the country, and my message to SkyCity regulators has been that they will know as soon as we know.
As Julian mentioned, our history in meeting our regulatory obligations hasn't always measured up. That is changing. Our multi-year transformation program is going to take time, effort, and investment, but it's vital in meeting the requirements of our licenses, and that's both our casino operating licenses and our social license. Our aim is to have a robust, continuously improving risk management system. We are transforming SkyCity's internal culture to one that absolutely prioritizes caring for our customers, meeting our obligations, and ensuring the safety and well-being of our people. We get this right, and we continue to grow the business for the benefit of our shareholders and communities. Turning now to the 2024 financial results. It's been a year where customers have battled the cost of living pressures as a result of weaker economies and higher inflation on both sides of the Tasman.
That's certainly been reflected in our results. Pleasingly, the number of people visiting us has held up well across the group. They generally spend less as, like all of us, they've kept an eye on what they could afford to spend on entertainment. Despite this, given all these challenges, we were able to deliver what we consider to be a solid result with underlying group EBITDA of around NZD 278 million. That's 8% down on the prior year and underlying group net profit after tax of NZD 123 million, which compares to a profit of around NZD 132 million in the prior year. The significant difference between underlying and reported earnings, which you see on this slide, is largely down to two major things. The first is an impact on the impairment of our Adelaide casino business for AUD 86 million.
The second is an adjustment of NZD 130 million for the impact on recent changes to New Zealand tax law regarding commercial buildings. The Adelaide impairment reflects what we think the impact will be on our revenues from introducing 100% carded play there. It also includes the added legal and compliance costs to combat financial crime and improve host responsibility. There were several other smaller accounting adjustments that impacted recording earnings. Importantly, underlying group EBITDA most closely represents the actual cash earnings we produced and our view of what represents a base to sustainable earnings into the future. Let's now turn to New Zealand. What's clear is that the challenging economic conditions I've spoken about have resulted in lower electronic gaming machine revenues. Pleasingly, though, we saw table games revenue continue to recover from their post-COVID levels as we're able to increase opening hours to meet customer demand.
The strong performance of non-gaming revenue, particularly in the first half of the year, was driven by increased visitation, plus the enhancements we made to a number of our attractions. Operating margins for the year are more representative of a sustainable cost base. We were able to increase our team members to support the delivery of appropriate service levels, and we locked in costs that were generally driven by higher levels of inflation. The change in revenue mix with a greater weighting to non-gaming revenue had a somewhat negative impact on the overall margin of the group. Now to Australia. Adelaide delivered a solid result despite total revenues reducing relative to the previous year. This year's improvement reflected a reasonably significant cost-out program that focused on reducing labor, utilities, and marketing costs.
During the year, we made a number of management changes in Adelaide, and you're going to shortly hear from our recently appointed managing director there, Avril Baynes. We are not yet where we need to be in Adelaide, but Avril and her team, with support from the broader group, are working incredibly hard to build a better business. We're confident we're going to do this, but it is going to take some time. Julian has spoken about the balance sheet and the board's commitment to maintaining an investment-grade credit rating and targeting triple B metrics over time. As of the 30th of June 2024, our net debt was around NZD 663 million. We continue to have significant funding headroom in our debt facilities, with NZD 252 million of undrawn facilities available to assist us in the funding of the business.
Our current leverage ratio of net debt to EBITDA is 2.3 x and well within the company's banking covenants. It's also consistent with our triple- B minus credit rating from S&P Global Ratings, where we have a stable outlook, which was reconfirmed earlier this year. In August 2024, we refinanced parts of our debt funding that were due to mature in 2025 and 2026. This means we do not have any further debt maturities until May 2027, which is a pleasing position to be in. Let's have a look now at a video presentation of our operating highlights for the past financial year.
Here we are, everyone. A challenging economy and cost of living pressures were common themes across the group for financial year 24. In Auckland, we saw that flow through to a decreased spend per customer.
Pleasingly, our visitation grew, showing our varied entertainment options remain appealing to local Aucklanders, domestic and international visitors. Electronic gaming machine revenue in our Auckland business was lower due to win per unit per day dropping year on year by 6%. It was pleasing to see the continued recovery in our table games business, reflecting higher opening hours as labor constraints eased. While ensuring our customers continue to receive exceptional levels of customer service across our sites, we have at the same time kept significant focus on both our host responsibility and AML uplift programs, with increased investment in both technology and people to ensure effective and continuous improvement. We are working hard to deliver our mandatory carded play solution across our New Zealand sites by July next year.
Mandatory carded play will become the only way to play at SkyCity, further enhancing our customer care promise and giving both the player and ourselves greater insight to help further reduce levels of risk and harm. Non-gaming revenue growth was a highlight for the year, with our award-winning food and beverage portfolio being joined by well-known celebrity chef Michael Meredith. His restaurant, Metita, offers a fresh and innovative Pacific experience and was recently awarded the Best New Restaurant in Oceania at the World Restaurant Awards. In August, as part of the opening of the Horizon Hotel, we welcomed back our much-loved steak and seafood restaurant, The Grill. Sky Tower also had a very good year, driven by both visitation and increased ticket value as a result of pricing strategy and increased automation. Hotel revenue growth was spurred by a significant improvement in occupancy rates from 80% in FY2023 to 85%.
We recently opened the stunning five-star Horizon Hotel, adding a further 300 rooms to our precinct with nearly 1,000 rooms across three city blocks. We are well placed to further grow our visitation and ensure we can derive maximum benefit from the upcoming New Zealand International Convention Centre opening.
SkyCity Hamilton had a solid year and maintained strong margins despite performance being impacted by challenging macroeconomic conditions. We were pleased to see overall visitation continue to grow, with customers enjoying our market-leading casino products and vibrant hospitality offerings. During the year, we continued to invest in the local community through key partnerships and in our core casino and hospitality businesses. We refurbished the casino bar and restaurant, reopening as Am use Bar & Kitchen in September 2023, and added a second restaurant tenancy, Palate, by awarded chef Mat McLean in February 2024.
The year saw changes for us in Queenstown, including the relinquishment of the Wharf Casino license in March 2024 and the sale of land on Franklin Road, which is due to settle in February 2025. This has allowed the team to focus on our central Queenstown property. While initially impacted by staff shortages, the second half benefited from having a stable team in place, good domestic support, and increasing visitation from international tourists. We are committed to the future of SkyCity in Queenstown as an attractive destination for tourists and premium customers, and we have started the process for the renewal of the casino venue license for 15 more years from December 2025. The city of Adelaide sits on the Adelaide Plains, the traditional lands for the Kaurna people, and we respect their spiritual relationship with their country and acknowledge the Kaurna people as the custodians of the Adelaide region.
Last financial year, SkyCity Adelaide experienced mixed results. Pleasingly, we saw an 11% increase in underlying EBITDA to AUD 36.5 million. This was achieved despite macroeconomic pressures of higher inflation rates and cost of living pressures impacting discretionary spend. Management responded to the difficult operating environment with a range of cost-out initiatives. We made changes to the VIP table game operating hours, lowered staff numbers across the property, improved our utility pricing, and refocused our marketing spend. Total gaming revenue was down 5% due to weakness in the first half of the year, and local table games saw some key operational changes, including reduction in opening hours and daily cash limits. Non-gaming revenues decreased by 2.9%, largely due to a reduction in Eos Hotel and some other non-gaming revenues. This was on account of pressure on room rates and a softer leisure market.
Hotel occupancy of 75.2% was ahead of the market but down year on year. This was offset by more encouraging visitation in the second half of the year due to our team's ability to yield in high-demand periods such as multi-day tourism events, in particular the AFL Gather Round and LIV Golf. We remained focused on offsetting inflationary pressures by driving price increases and uncovering growth opportunities wherever possible. One of these strategic opportunities included the recent conversion of our Level A International Business Suites into luxury conference and event spaces. We have already seen tremendous interest in this offering, generating almost AUD 300,000 in largely incremental MICE business with the Events at SkyCity team. Last year, our incredible events team was awarded South Australian and National Caterer of the Year.
We have produced a master brand marketing campaign, which will launch in the coming months, and we continue to work with our stakeholders and neighbors to bring the wider precinct to life with collaborations in partnership with the likes of Flinders University and the Adelaide Festival Centre. The Riverbank Precinct continues to be developed, with a second 38-story Festival Tower recently approved next to the existing 29-story Festival Tower right on our doorstep. This will see the heartbeat of the city move further towards our fully integrated precinct. We are firmly focused on building a better business so that we are acknowledged as sustainable amongst our many stakeholders, while we also optimize opportunities to be a stronger contributor to both SkyCity Entertainment Group and our community.
In the last financial year, we've seen a lot of changes for SkyCity Online Casino, and of course, there's been the really all-important announcement from the government that online casino gambling will be regulated in New Zealand. This is welcome news for SkyCity, but a regulated market is still some time away. What we continue to see is an unlevel playing field where many online casino providers are targeting New Zealanders in contravention of New Zealand laws and a market that will be increasingly targeted, free of regulation. This situation has impacted the bottom line, and we've seen lower revenue figures for the financial year 2024, but our customer acquisition and retention has held up really well despite these commercial challenges. Our teams are busy investing in building our capability, omnichannel technology, and people readiness, so when regulation arrives, we are prepared for day one.
We continue to meet with the minister, officials, and other stakeholders to influence and ensure that regulation provides the best harm minimization framework for customers and supports a fair, competitive landscape. The regulation of online casino gambling is a really exciting opportunity for SkyCity, and we are thrilled by the possibilities that this presents.
We are really excited about what the NZICC will bring to SkyCity, to Auckland, and to all of New Zealand. It will attract over 30,000 new international visitors a year and drive over 500,000 new visits to our precinct each year. Let's go inside for a shareholder exclusive look. Here is the main exhibition hall, the size of Eden Park, but I think we can do better than that to give you a sense of the sheer scale of the main hall. Let's pull out a bit. Keep going. Keep going.
You are looking at a 6,700 square meter space that can be booked for a single exhibition. Think of the boat show on steroids. Because of its operable walls, it's also capable of being divided into 16 different configurations and up to eight different meeting spaces. This allows us to cater for groups as small as a boardroom of 20, all the way to, in a New Zealand first, a 3,200 person seated dinner. Flexibility is the key for modern convention centers. Conference organizers are looking for spaces that can be scaled up or down, depending on the demand. Our clients will be able to move in huge pieces of equipment for display in the space for exhibitions.
If it doesn't fit in one of the 11-ton truck lifts, we can slide the glass panels from the Hobson Street end of the building and drive a semi-trailer straight from Hobson Street onto the floor. Two floors up is the theater. At full capacity, the theater can accommodate just under 3,000 people, auditorium style. This will be the venue where some of the world's brightest minds will be sharing their stories. Comedians will have people laughing in their seats, or we'll have some spectacular music acts. Similar to the halls, flexibility and versatility are here too, with this space being able to be divided into two separate 1,200 theaters that can run side by side without one disturbing the other. Check out this motorized retractable seating.
By removing the lower level seats and activating the first tier retractable seating, we can convert this into a flat floor area where you can accommodate a dinner for 1,100 people while listening to your favorite musician live. The NZICC is literally a work of art. From Sara Hughes' amazing glass panels to the ceramic façade by Peata Larkin, you are seeing some of the finest craftwork on display. At night, the NZICC can light up in the colors of conferences, offering significant versatility for our business. It will connect into our precinct with cleverly designed air bridges, and we absolutely can't wait for it to open. Combined with the opening of the City Rail Link in 2026 and the subsequent reduced construction activity around the Midtown area, the next few years will present many opportunities for our precinct to shine.
Thank you F to all our customers across both New Zealand and Australia, and to our team who works so hard to ensure we continue to entertain responsibly.
Let's now talk about another strength. As I mentioned earlier, the more than four and a half thousand employees who work at SkyCity across New Zealand and Australia are a talented and incredibly diverse workforce, with at last count, more than 61 languages spoken or written by staff, and as we saw in the video, maybe a few budding actors as well. As a significant employer, we positively impact our local communities, and that's why we are so committed to meeting our obligations and looking after our customers so we can continue growing and creating jobs and opportunities for advancement. At SkyCity, we're committed to growing sustainably and protecting and enhancing the environment.
Our sustainability implementation program outlines both our approach to managing our impact on the environment and the communities we've made related, and excuse me, and the commitments we've made related to climate change. I'd also like to highlight the important social role that SkyCity plays. Over the past financial year, we've paid NZD 4.6 million to our SkyCity New Zealand Community Trusts. The trusts then approved a total of NZD 5.9 million in grants to 130 different organizations in New Zealand. And we continued our support for Leukaemia & Blood Cancer New Zealand's annual fundraising efforts, helping them raise NZD 2.5 million through two key events at the Sky Tower. Please visit their stand in the foyer to see the great work that they do.
We're also fortunate to have representatives from two of our other charities in attendance here today, Variety – the Children’s Charity, which is focused on improving the well-being of children and young people, and the Catalytic Foundation, which is dedicated to helping create thriving communities throughout the country. We're very proud of the work that they do, and I encourage you to visit them at their booths in the foyer and see some more. You'll also see that we have the All Blacks Experience, a popular attraction at our Auckland precinct, and you can drop by, as Julian mentioned, and get a photo with the Bledisloe Cup and get a sense of how our partnerships are adding value and memorable experiences for our customers, and there's also a chance to win a signed Black Ferns rugby jersey too.
After just over three months in the job, I'm really encouraged with what we have been able to achieve in such a challenging year, and I'd like to highlight a few examples. Firstly, the buyback of the Auckland car park concession in January with management of the car park now back in SkyCity's control, and as Julian shared, in Australia, we've settled our AUSTRAC proceedings, and we reached agreement on the two matters with the Department of Internal Affairs that saw the closure of our Auckland Casino for five days in September, which did have a silver lining and that we used the time to train and develop our teams and carry out significant upgrades on the gaming floor. In June this year, we made the strategic decision to sell our equity interest in Gaming Innovation Group or GiG for NZD 55 million.
As we recognized there was no longer a need to retain an equity position in GiG to achieve our online ambitions, and we used the proceeds to pay down debt. We opened the five-star Horizon by SkyCity Hotel in Auckland, and this 303-room hotel is connected to both the New Zealand International Convention Centre and our Auckland Precinct, as you saw on the video. I now want to talk about what is in front of us. We still have a comprehensive to-do list, with one of our key priorities being to resolve the regulator, the regulatory matters in Adelaide to the satisfaction of our regulator. The South Australian regulator, Consumer and Business Services, has recently recommenced its review into SkyCity Adelaide's suitability to continue to hold its casino license.
The review findings are due by the end of this year, with a decision on the license and any penalty to follow. It is possible that these findings will be unfavorable. Alongside this is the work we are doing with the independent monitor Kroll in relation to SkyCity Adelaide's anti-money laundering and host responsibility programs. This multi-year program of work called Building a Better Business was recently approved by the regulator, and it's critical for the future success and returns of our Adelaide business. We're also progressing the contractual dispute with the Treasurer of South Australia concerning the treatment of loyalty points that are converted to gaming machine play and the calculation of casino duty. The other key focus for 2025 is the rollout of 100% carded play by mid-July in New Zealand, and following that, its introduction in Adelaide in early 2026.
As Julian mentioned earlier, this is an important part of our transformation program and will help us better manage our host responsibility and anti-money laundering requirements. 100% carded play is a major step forward in customer care. Initially, we believe there will be an impact on revenue somewhere in the order of 15% to 20% of annual uncarded gaming revenue. This assessment is based on our existing level of carded play, which is approximately 65% in Auckland and 70% in Adelaide. We add to that an understanding of the gaming venue competition in the various markets we operate in. We have also learned from the experience of others who have already gone through this process, and I would note there does remain a high degree of uncertainty associated with this analysis.
Our aim to mitigate revenue impact is to work hard to increase the level of carded play in the run-up to launch in July next year. We want to create a seamless customer sign-up journey for those that are currently uncarded. We are well advanced in our work to do this and have ensured we have the necessary resources. To give you a better sense of our plans, we've put together a short video on what carded play will mean for our customers. Let's take a look.
At SkyCity, we are all about delivering world-class entertainment at our award-winning hotels, restaurants, attractions, and casinos. At the heart of our entertainment is customer care. We want to ensure that every customer who walks through our doors knows they are in safe hands. That's why we're launching 100% carded play.
I love this project because for me, this is like the first step in how we can be really transforming our business, both from gaming transformation and customer experience transformation.
Carded play will mean that we can take our customer care to the next level because carded play is going to be the only way to play. It means that both SkyCity and our customers can accurately monitor how long they've been playing and when they need to take breaks.
Starting in New Zealand from the 15th of July 2025, carded play will be the only way to play. To get a SkyCity card, customers will be asked to provide identification to show who they are, and this will be linked to a player account. This is an important change.
With these machines, we actually have to physically put in a new device so that when the card is inserted, it will start calculating the time, and then it will let the customer know when they've reached their time and not let them use it anymore, so that in itself does sound simple, but that's quite complex. We then have to think about, on the table games, we've got multiple ways that our customers experience gaming at SkyCity, so whether this is just playing on a game where you're seated, the customer will swipe on and start having an experience of their timed play, but then we have other environments like what we call zone play, where a player will swipe into a zone like the baccarat tables area.
And so we have to really think through all of these different ways of both how a customer will play and how that technology will work with that customer.
It certainly leverages a technical solution, but we're always going to need to rely on our teams to support our Host Responsibility practices here at SkyCity. We're always going to want to have those face-to-face interactions with our customers during their time here on site. It certainly leverages technical opportunities that we have using this technology for carded play, but it's not the only solution.
Premier Rewards members don't need a new card. For new sign-ups, it's easy. You can either sign up online through one of our sign-up kiosks or talk to one of our friendly team members. Our teams are working hard behind the scenes to ensure carded play is a seamless customer experience.
What frictionless means is it should take a very small amount of time, not too many things that a customer has to press on or not too much information they need to give. But of course, we need to capture enough information that we can actually enroll them safely and do identity checks from a customer due diligence perspective and ask them a bunch of questions that are really important for us around helping to reduce financial crime.
The introduction of carded play next July won't just be the only way to play. It's a way of playing that will give us an improved level of customer care here at the home of entertainment, SkyCity.
Importantly, there are two other initiatives that we're excited about and expect to provide future earnings growth opportunities. First is the New Zealand International Convention Centre, as you saw, which we expect to be completed in 2025 and is a transformational infrastructure asset. We expect it to benefit not only SkyCity, but the wider Auckland and New Zealand economies with the increase in international tourism it's going to deliver. It's truly world-class, and I say that based on my experience of living in Las Vegas for more than 20 years. It is fully integrated into the Auckland Precinct, and as a result, we can expect significant earnings growth across many revenue streams.
Secondly, as you heard from Steve Salmon, our online gaming operation has provided us with significant capability in a growing market. This positions us well for when online casino gaming is regulated by the New Zealand government in 2026.
We're supportive of the government's public health-based approach and its intention to level what is currently an uneven playing field. A playing field, I might add, where SkyCity competes legitimately against operators who are breaking the law around advertising. We've provided feedback to the government and have highlighted key policy settings we think are critical for success. And these include recognising existing licensed casinos that have already gone through stringent suitability checks, including ourselves, importantly ensuring only trusted and reputable operators are granted licences, limiting the number of online casino licences to between five and seven, and this will balance customer choice against potential harm from excessive advertising and marketing. And there should be a substantive domestic presence for all licensees to ensure the capture of tax and support enforcement. And we will keep you updated on this as things progress.
Now I'd like to give you an update on trading. The economic environment in New Zealand continues to be challenging. However, interest rates are trending down, which should provide some welcome relief for both businesses and our customers. We're expecting current conditions to continue into 2025, but we remain hopeful to see signs of improvement in the second half of this financial year. At this point, we remain comfortable with the guidance provided at our financial year 2024 results release in August for underlying group EBITDA in financial year 2025 to be between NZD 245 million and NZD 265 million. As noted previously, we're not expecting to pay a dividend for financial year 2025 based on our current earnings outlook as we continue to maintain a conservative balance sheet for the short to medium term.
However, as Julian pointed out, it remains an objective of both the board and management to return to paying dividends as soon as we can. So let me summarize. First of all, I'm just really excited about SkyCity and the outlook for the group. We are going to transform our business, change our internal culture, meet the obligations expected of us, and improve shareholder returns. But it is going to take some time, and it will need continued investment. Without doubt, there will be further challenges along the way. I'm well aware that the returns to shareholders have been below what they should have been with the outstanding assets that we do have. As a business, we've been laser-focused on resolving these key issues facing the group, and this has meant less attention on operational matters. Our focus now is on making the future happen.
Together with our leadership team, we are taking a detailed look at the broader business and mix of assets to ensure they are structured in the most optimal way. Our primary goal is to allocate capital in the most efficient manner and to the highest returning assets. We are well positioned to take advantage of improvements in the economy, the opening of the NZICC, and the growth in tourism we expect to see on the back of that. We welcome the prospect of regulation of the New Zealand online gaming markets so that we can deliver value to SkyCity and our communities. Together with the changes that we can control, I am optimistic that SkyCity's performance will improve in the coming months and years.
In closing, I want to say thank you to the SkyCity family, our board and the management team, and our incredible people for their resilience and ongoing commitment to SkyCity, and to our external stakeholders from our regulators, financiers, suppliers, and through to our customers and our shareholders, SkyCity does not exist without you, and for that, you have my thanks. [Foreign language] .
Thank you, Jason. I will now ask Donna Cooper to address the meeting.
[Foreign language] My name is Donna Cooper, and I'm the chair of SkyCity Board's Transformation Subcommittee. I'm pleased to be here today and have this opportunity to address our shareholders. As both Julian and Jason have shared, we are committed to uplifting our governance and risk management practices across the SkyCity Group.
How we collectively think about the risks that SkyCity faces and ensuring we have adequate controls in place to mitigate these risks are important aspects for everyone at all levels of SkyCity. In June 2024, we established a Board Transformation Subcommittee to oversee this journey and monitor our progress. While this program is a multi-phase approach, our initial key priorities have been finalizing a comprehensive multi-year transformation program, creating an uplift in program delivery capacity and capability, and ensuring there are clear governance structures and reporting in place. The subcommittee met monthly while the governance and reporting processes were being established, but with the finalization and implementation of these, we are now meeting quarterly.
We are proud of the progress SkyCity is making to address the shortcomings of its past, and the establishment of this subcommittee marks a significant milestone as we move towards the next chapter of our transformation journey. We now have a comprehensive multi-year transformation program designed not only to meet the expectation of our regulators, but also achieve material improvements in the way that we identify, assess, and manage our risks within the board's defined risk appetite. To further strengthen this, we have taken the learnings from other organizations, both from within our own and adjacent industries, so that who have made enduring changes to their businesses. Our transformation program focuses on six strategic pillars that have been deliberately designed to deliver tangible outputs and improvements.
These are governance at both board and management levels, culture, risk management and compliance, conduct, re-establishing trust with our regulators and stakeholders, and executional enablement. Significant progress has already been made in these areas in the past two to three years, such as strengthening the capability of the board and management team, establishing a more robust risk operating model, increased investment in host responsibility and AML/CFT capability and capacity, and progressing the resolution of regulatory matters. The transformation program outlines our commitments for future delivery, designed to enable the best outcomes for our customers and communities by driving long-term growth, deepening our regulatory relationships, and fostering a culture of care for our customers and communities. Enhancing and embedding our culture of care is a key element in getting our risk improvement right.
The rollout of our new internal code of conduct is an important part, and there will be an ongoing focus on continuing to grow and support our people at all levels who will always play an important role in safeguarding our customers and our business. You can read a summary of our transformation program on pages eight and nine in our 2024 annual report. As we look to the future, we'll be continuing to have a continued focus on strengthening our Host Responsibility and AML/CFT capability, including enhancements to our technology such as facial recognition, which is now embedded across our casinos, and deliver the foundations to enable carded play, which you've already heard about from Jason and in the video.
Carded play will be the only way to play at SkyCity, and we are committed to its implementation as it will significantly increase our visibility and control of play, simplifying many parts of our AML/CFT and host responsibility operations. To ensure that we remain focused, there are clear governance structures and robust reporting in place. Alongside establishing the Board Transformation Subcommittee, the management team has streamlined and strengthened reporting and oversight of the transformation and remediation programs. The SkyCity board and management team are committed to the delivery of the transformation program. To support this, we've also strengthened our ability to deliver complex programs of work. We have created a new group manager transformation role and introduced group general manager transformation roles to both our risk and technology functions. These new experienced senior leaders will work collaboratively together to support the successful delivery of these programs of work.
Our new general manager transformation joined SkyCity in early November. We have made good progress to date, but there is more work to do. We are committed to meeting the expectations required of us and building back trust, and we have the plans, people, and necessary investments to achieve this. I want to reinforce that this program touches every part of SkyCity. This is a whole-of-business risk transformation that will pave the way for our successful future. Ultimately, our transformation program is an essential investment of time, effort, and resources that will allow us to retain our casino licenses and, just as importantly, maintain our social license to operate. It will be a long-term program of work, but by getting it right, SkyCity will be able to continue supporting our local communities and deliver appropriate returns to our shareholders. [Foreign language] .
Thank you, Donna. Before we move to the formal resolutions, as set out in the notice of meeting, I will briefly outline today's voting procedures. Voting will be by way of poll. You will need to complete your voting directions online or, for those attending in person today, your voting forms. Persons attending the meeting who are not shareholders, proxy holders, or corporate representatives of a shareholder may not vote on today's resolutions. For those attending online today, select your voting direction from the options shown on your screen. Your vote has been cast when the green tick appears on your screen. To change your vote at any time before voting closes, select Change Your Vote on your screen.
For those attending in person today, please complete and sign your voting paper and place your completed voting paper in one of the ballot boxes on your way out of the theater at the close of the meeting today. Many shareholders who are not attending this meeting have already voted by proxy. Approximately 544 million proxy votes, representing around 72% of the shares on issue, were received prior to the cutoff for proxy voting at 11:00 A.M. on Tuesday, the 29th of October. We will now move to the three formal resolutions to be considered by the meeting. There are roving microphones available for those people who have a question in relation to the resolutions. Given the theater-style seating, if you have a question, please stand where you are and wait for a microphone to be passed along the row to you.
Please have your attendance card or voting form with you and introduce yourself and note whether you are a shareholder or a bondholder. The first two items of business concern the re-election of directors. In accordance with the requirements of the NZX Listing Rules, Chad Barton and myself will retire at this meeting and, being eligible, offer ourselves for re-election. For resolution one relating to my re-election, it is appropriate for me to hand over the chairing of the meeting to my fellow director, Glenn Davis. I will now invite Glenn to chair the meeting in respect of resolution one.
Thanks, Julian, and good morning, ladies and gentlemen. It's my pleasure to move resolution one to re-elect Julian Cook as a director of SkyCity. Julian was appointed to the SkyCity board in June of 2021 and then elected by shareholders in the annual meeting that year and was appointed as the chair of the SkyCity board in January 2022. The board considers Julian to be an independent director and unanimously recommends shareholders vote in favor of his re-election today. I'll now ask Julian to briefly address the meeting on his re-election.
Thanks, Glenn. Now, I've had the pleasure of sitting on the SkyCity board for around three years, and the company has certainly had its challenges. Prior to me, we had the fire in the convention center. We had COVID, and the last three years have been particularly challenging as we work through the historical regulatory and the performance.
As a board, our objective has really been to govern and assist the business through this phase, protect our licenses, regain trust, and particularly position the business to take advantage of what's coming in the future, which is good in that we will have NZICC, we have Horizon Hotel, we have online gaming coming. So ultimately, I serve at your pleasure, and my commitment to you is if you do decide to re-elect me for another three years is to continue our focus on restoring SkyCity to its proper standing, protecting our licenses, and ensuring we deliver a return for shareholders. Thank you.
Thanks, Julian. I move that the meeting re-elects Julian Cook as a director. Do any have any questions from the floor on the resolution? I have to admit it is very hard from here to see.
Thank you. I'm Beryl Plimmer. I'm the New Zealand Shareholders' Association representative at this meeting, holding the proxies there. I think you said in your address probably about 25 x historical breaches. Can you give us a bit of a more feel of it? It sounded like they were last century, to be honest, and they certainly weren't last century. And my ears pricked up when Jason said, "And we're back under investigation in Adelaide," I think is what he was saying, and not those words. Can you give us a little bit of idea of how the board is managing this and the timeframe we're talking about?
Yeah, they're a little more recent than last century, absolutely. Look, I think when you look at, I'd probably say the DIA action against us in AML, they picked up breaches back till 2014.
These are, you know, what has been happening has been happening for a very long time. There has been significant change in the last sort of two to three years in terms of the standards we've been setting, the investment we've made in risk and compliance, the size of our team. We've got over 110 people, and if you went back, say, three years, we probably had 20 or 30 people in those areas. We are in a much better position than we are now, but there are still, you know, we still do have gaps. We have these transformation programs for a reason, which is to close these gaps. We will close them. You know, we're well into it, but they still do have another three years to run before we've completed them.
The investigation in relation to Adelaide commenced, I think it was about a year 2022. That commenced in 2022. So that's not a new investigation. That's just that investigation taking its time to do its proper work, and particularly, I think, probably to look at the program of work we now have in place in Adelaide, and we got signed off by the regulator and by our monitor a few months ago. So I think they probably want the opportunity to see that before they make their final decision.
Beryl, I think it's important in Adelaide; it's not a new investigation. The investigation started and then paused for a very long period of time while we dealt with the AUSTRAC proceedings. Once we had that issue resolved, the commissioner then recommenced that inquiry. So it's the same ongoing inquiry. There's just been a long hiatus in the middle of it. Are there other questions from the floor?
One thing I would like to puzzles me really. What are the responsibilities of the board when they break the government regulations and you are not punished? The punishment is the shareholders because they don't get dividend because you mismanage the company you're supposed to serve the shareholders. How much you have to pay for the fines, which was created really by the board, and the board got away and say it's bad, and we spend this time here just propaganda. You try to see how the thing is getting better, everything. The Adelaide casino was on the market for sale. You never sold it. Why and now you say we're going to transform that because nobody was interested and my question come back is the same thing.
It's too much rhetoric and too much propaganda. You spend this all the people spoke here is propaganda. It's like politicians. The economy is bad. They say, "Oh, we are improving. We are getting better." We work for you. That's a lot of crap, and I tell you, you should be responsible and pay part of the money you get. The fines the government put to the casino should be your responsibility, but you don't. Some resign and go away. We told the benefits they have, okay, and the other one stay here, prove all the things are going to be better, but this is rhetoric, and you do that all the time, so I just content, and it puzzles me. You don't accept responsibility for the mismanagement. If you broke the law, it's your responsibility, not of the shareholders, because the shareholders don't run the company by yourselves.
Would you like me to answer that question?
Sure. Yeah.
Well, look, it's a very good question. I think probably the only way I can really answer it is that the board you are looking at here today is new, right? Like I myself and Chad Barton, who is also up for re-election, the week we were elected as directors to SkyCity was the very same week that AUSTRAC started investigating us in Adelaide, right? So it's sort of, I mean, I don't want to sort of try and dodge the question here, but it's a little bit difficult because, look, the reality is we are new. I think if you're thinking about accountability, well, the reality is that directors who were present through that time, they are no longer serving. You know, it is a fresh board that you're looking at today. That doesn't take away from the fact that ultimately, I agree, it is shareholders absolutely who are bearing the cost of this.
Thanks, Julian. Are there other questions from the floor? Sir, do you have a question? No.
We have a question from online. If you have a chance to listen to it.
Certainly. I can't see any more from the floor, although it is very hard to see, I'm sorry, but yes, let's move online if there's a question.
Okay, we have a question from Stephen Mayne, shareholder. His question says, "Given that we have former Tabcorp CEO David Attenborough and former Star Entertainment CFO Chad Barton on the board, could Chair Julian Cook comment on the likelihood of consolidation in the Australasian gaming sector? Wouldn't it make sense to achieve scale through a merger with either Tabcorp or Star? Are there any regulatory issues that would prevent an ASX-based gambling company from buying SkyCity? Could Julian also please lay out his personal experience when it comes to executing M&A transactions?
Okay, the possibility of us merging with Star or Tabc orp. Well, absolutely there are possibilities. I would emphasize our current focus is running this business. Like our focus is on the remediation and transformation program that we have. It's on opening NZICC. It's on securing a successful online business. We never ruled, you know, never ruled anything out, but I would emphasize the focus is on what we have here today. As to my experience in doing those sorts of things, I did spend 11 years in investment banking and in mergers and acquisitions, so I'm a little bit out of that industry now, but certainly know a few tricks around that space.
Thanks, Julian. Rodney, are there any more questions online?
No, nothing else for this resolution. Thanks.
Thank you. With that, ladies and gentlemen, I have moved the resolution, so I now put the resolution. Shareholders, you should select your voting direction for resolution one. With that, I'll pass the chair back to you, Julian.
Thank you, Glenn. Resolution two. It is my pleasure to move resolution two to re-elect Chad Barton as a director of the company. Chad was appointed to the SkyCity board in June 2021 and elected by shareholders at the annual meeting in that year. The board considers Chad to be an independent director and unanimously recommends that shareholders vote in favor of his re-election. I now ask Chad to address the meeting.
Thank you, Julian. Good afternoon, shareholders. Today I seek your support for my re-election to the board as an independent non-executive director.
I'm honored to currently serve as the chair of the audit committee and as a member of the people and culture and governance and nomination committees. With over 25 years of senior executive experience in both global and locally listed companies, I bring a diverse background in people, technology, and capital-intensive industries. My background as a chief financial officer has equipped me with deep expertise in capital markets, corporate strategy, and finance. Additionally, my tenure as CFO of the Star Entertainment Group, where I served until 2019, gives me valuable industry insights. I also had the privilege of being founding chair of Women in Gaming and Hospitality, working alongside industry leaders, including SkyCity, to promote gender equity and support the development of women in the gaming industry. It was during this time that I developed a deep respect for SkyCity, its values, and the communities that we operate in.
As a chartered accountant and member of the Australian Institute of Company Directors, I'm committed to applying my expertise and experience to drive the success of our company. With your support, I look forward to working with my fellow directors and management team to create greater value for all shareholders. Thank you.
I move that. Thank you, Chad. I move that the meeting re-elects Chad Barton as a director. Are there any questions from the floor? No. Are there any questions online?
Yes, we have a question online from Stephen Mayne, shareholder. It's quite a long one, so I'll just bear with me. Given that Chad Barton was CFO of Star Entertainment for five years, from 2016 until 2021, what assessment did the board make about his involvement in the issues which led to a regulatory world of pain at Star over the past three years? Could Chad also comment on whether he believes Star's regulators of its three casinos in Sydney, Brisbane, and the Gold Coast have overreacted?
Also, could Chad please comment on whether he thinks it is fair that our Adelaide casino is being forced to go cashless when the same rules won't apply to poker machines in nearby Adelaide hotels? Shouldn't the same rules apply to all operators, and why aren't any of the Australian casino operators making this case publicly? Are we too scared to take on the powerful Australian pubs and clubs?
Perhaps I'll answer the first part of the question. Yeah. So just in respect to Chad's time at Star, so Chad was the CFO at Star up and through to early 2019. If you know the Star business, you'll know that it is currently in not the best shape.
I would say we did a lot of work talking to Chad when he came into the business and ultimately satisfied ourselves that whilst many things had gone wrong at Star subsequently, Chad was not implicated in any of those. He was never called up to any of the regulatory inquiries, and there were a number held in relation to Star, and there were never any findings made against him. So certainly very, very clean bill of health, and I can personally attest to the value that he brings to the board, and his knowledge of working casinos in Australasia is very, very valuable to the board in helping us look at how this company runs and knowing where are all the little places that we need to look.
And so I'll comment on the next two parts of the question, if I recall them correctly, the first one being around regulators in New South Wales and Queensland and the Star in particular. Look, I don't think that's an appropriate question to actually have in a SkyCity board. I think it's more focused on our business and our regulators and how we're dealing with those at the moment. That's what the focus of our transformation program is. So I think I'll just put Star's regulators to one side. I think in regards to cashless in pubs and clubs in Australia and in particular in Adelaide, again, I think we're doing what we think is the right thing to be doing for our business and our patrons and protecting our customers.
And so the focus has been on the right thing for what we're to do for ourselves rather than necessarily what pubs and clubs are to do. Obviously, we'd like a more even playing field, but our focus is on ourselves at this point in time.
Do you have any more questions online?
Nothing more online. Thanks.
Nothing from the floor. Right, I have moved the resolution, so I now put the resolution. Shareholders should select their voting direction for resolution two. Resolution three. Resolution three involves the setting of the remuneration for the auditor. PricewaterhouseCoopers is the auditor of SkyCity, and that firm has indicated its willingness to continue as the auditor of the company. I move that the directors be authorized to fix the auditor's remuneration. Are there any questions from the floor? Yes, down here.
Yeah, Grant Plimmer, shareholder. I'm just wondering where the auditor's work finishes and ends because obviously there's been some issues with SkyCity, and we all know auditors basically checking that one and one equals two. But obviously there's been levels of money laundering, and money laundering is not three or four hundred dollars. So I'm wondering whether the auditors are picking that sort of stuff up. And the other area is the taxation issues in Australia, whether the auditors were picking that sort of stuff. The auditors know they're auditing a casino, they're not ordering Fonterra. So there are special things they need to be looking at, and I'm wondering how far the auditor's work, in fact, goes into looking at these other things. Thank you.
Yeah, thank you. Look, that's actually quite a good question. So their audit is a financial audit. It is there so shareholders know that what we present in these accounts are actually, the money is actually there and is represented properly, and I can tell you they can be. PwC are a pretty tough auditor in that respect, which is what you want. You know, they hold us to account. Where we have had lapses in anti-money laundering also in host responsibility, there is a separate assurance program. This is not within the PwC scope of work. They're just looking at the money that sits in this business. The assurance programs that we historically had in relation to anti-money laundering and host responsibility were not strong enough. The providers who did that work did not go deep enough. We did not ask them to go deep enough.
There was not enough board scrutiny on the reports which were received, and they were not done as frequently as they should be nor taken as seriously as they should be. So in those areas, there is a very, very different focus now. There is a very strong assurance program. The board oversees that program very closely, and all the people who prepare those reports come before the board to attest to, you know, have they looked properly? Have they looked deep enough? Make sure you're going to find everything you can. So long answer, but sort of outside of the PwC scope, but certainly in the assurance side of the world for host responsibility and anti-money laundering now, very, very different approach that we have. And then on the taxation issue in Adelaide, well, PwC were across and knew about this issue for a long time.
The issue really related to the definition of how a tax should be calculated and a difference in opinion between us and the treasurer in South Australia. Now, we obviously thought we were right, and they thought they were right, and it was proved that we were wrong, and so we will cop that and move on. Online, nothing?
No questions on this resolution.
Nothing else in the room. Thank you. I have moved the resolution, so now I put the resolution. Shareholders should select their voting direction online for resolution three. In the notice of meeting, we invited shareholders and bondholders to submit questions prior to the annual meeting. One shareholder submitted three questions in advance. I will read those briefly. Jason will give a quick answer, and then we'll open up to a general Q&A. First question. At the annual results announcement, the CEO referred to a whole-of-business transformation and stressed this was not just about host responsibility. Can he please provide more detail on what a whole-of-business transformation would entail and how it would enhance shareholder returns?
Thanks, Julian. Yeah, so as we think about the future and what we're moving through as an organization and the transformation plan, it's quite all-encompassing. So it involves anti-money laundering, the countering of financing of terrorism, the host responsibility, significant culture change. We've undertaken a lot of culture assessments across the organization to understand the changes that we need to make there to ensure that all of us within SkyCity are taking responsibility for caring for our customers. And then we've also made a lot of changes to the governance models, and you've heard about those from Donna today.
So we're looking at those aspects in terms of changing our operations. And then secondly, as you'd naturally expect coming into the role and being new into the role along with our Chief Financial Officer, we're looking at all of our assets across the business, as I mentioned in my address, to ensure that we're allocating capital well. So that's what I was referring to with respect to this being a whole-of-transformation, whole-of-business transformation that we're undertaking.
Thank you. Next question. Management has estimated the implementation of a mandatory carded play may lead to a 15%-20% reduction in the current uncarded revenue component. Is there concern that these losses will be permanent? Is our competitive position permanently disadvantaged to competitors with less obstacles in place for customers?
Look, there is a lot of uncertainty around the impact that we think mandatory carded play is going to have. We've used our experiences during COVID, as well as some learnings from other casino operators in Australia that have implemented that technology ahead of us to try and assess and estimate what we think that impact is going to be. In terms of the competitive position in the marketplace, yes, it is different. I would say that we have a unique offering in Adelaide as a consequence of being a casino that counters some of these disadvantages that the person who asked the question spoke to. We have a wider range of product on our floor. We have the ability to offer table play, restaurants, and a hotel, and to be able to package all of those things up and offer them to our customers.
Thank you, and a final one. Recent initiatives in host responsibility and compliance are welcomed. They are clearly important from a regulatory perspective and hopefully meaningfully reduce risk for shareholders. However, they also seem potentially to make the business significantly less profitable. The CEO has commented recently that returns have been well below what should be possible. Can he please elaborate on what gives him confidence that future returns will justify shareholders' invested capital?
Yeah, we've chatted about today and shared some videos on the fantastic quality of our assets. You know, just getting around and visiting our precincts, I was just tremendously impressed with the quality of them. You've seen the NZICC. I mean, it's a truly impressive building. The video was fantastic. It doesn't do it justice, though. I mean, we're going to have over 32,000 sq ft of convention space there. We believe that that will bring more than 33,000 new international visitors to New Zealand and create more than 500,000 additional visitor days across our precinct. I spoke about online gaming that we expect to see regulated in early 2026, and that's a meaningful opportunity for us. I think all of these things are underpinned with what we expect to be an economic recovery here in New Zealand and in South Australia through 2025 and into 2026. All of those things add up to the ability for us to improve our operating performance as a business.
Thank you. I now open the meeting for questions and comments from shareholders or from anyone else who has been appointed as a proxy or a corporate representative about the operations and management of the business. I will either answer your question myself or redirect it to a board member or to the Chief Executive Officer as may be appropriate. Firstly, we will move to questions from the floor. Are there any questions? Yes, Coralie.
First of all, thank you. The video was very informative and encouraging that you've made that much progress. Now, I'd like to talk about the mechanics of money laundering and how you're going to prevent this going forward. I understand why you've gone cashless in Adelaide with all those wet banknotes that were handed in as part of the money laundering problem there. But obviously, we're still doing cash here.
Now, I'm not a gamer, so I don't really know how you go about buying chips to sit at the table and game, but I assume you go to a cashier and you've got a pile of cash, which you convert into chips, or you use a credit card or some other form. That's still going to happen here, isn't it, that you could go with a pile of cash to the cashier. Even though you've got a card that limits you as to how long you can play, it doesn't limit you as to how much you spend within that timeframe, does it? It can, but no, it normally wouldn't. Will the carded system apply to your VIP customers who are spending big bucks?
Yes, anybody. Any play, anybody. Yes.
How will you know when someone comes in with, say, AUD 50,000 worth of cash that it's legitimate? Yes. And even if they stop playing for a while and go and have a cup of coffee so that the time, you know, expires, that they can come back and spend another AUD 50,000?
Yes, so I can answer your question if you're...
Yes, I've finished answering a question. I've finished asking, sorry.
No, that's all right. I'll take you through a few of the controls that we have in place. And these are controls which were sort of in place in Adelaide in the past, but clearly not as strongly as they should have been. And there are a number of examples of where those controls did not work, and we let people in who should not, frankly, shouldn't have been there.
The first one is cash limits. If you do come in with a large amount of cash, we're going to do a number of things. Firstly, we're going to say we need your ID. If the cash is too much, we're going to say we need time to do proper due diligence on you to understand where your money is from and to make sure it is legitimate. Depending on how much money is involved, that can be quite a lengthy and in-depth process. There will be certain limits of cash. We will simply say we do not, we will not take that much cash. We just do not want it. The limits at which we start doing all of those things historically have been higher. Now they are significantly lower. They are much, much lower.
So it is, yes, we still do take cash into the casino, but you can only bring smaller amounts in, and we put you through a lot more due diligence to make sure that where you brought your money from is appropriate. Next one would be just our reporting systems within the casino. So one of the issues we did have in Adelaide, and it's not great to talk about, but we did, somebody came in with a cash which had dirt on it, which is not a good thing. Now, there was a report filed by the cashier, but nothing was ever done about that report. So it's really important that we have really good reporting. So firstly, reports of suspicious activity are filled out, but that people act on it, and they act on it immediately.
So I would like to think if that happened now, the very first response would be, "No, go away, we don't want your money." The second one would be to file the report. Then this third one would be to make sure that up the chain, someone knows about what has happened, and that particular customer is placed on a sort of high-risk kind of a system. And the last one, which does happen, and again, this is just up to us to make sure, you know, we watch and report things very, very closely in the casinos, and the mandatory carded play system we have will help this greatly. What you can do is you can go and buy some chips, and then you can just cash out immediately without any gaming play. And that is a key indicator of someone who is trying to launder money.
We have had controls to prevent that sort of thing for some time. They are a lot tougher now, and mandatory carded play will take that to a new level. So I hope that answers your question. Yes, sir.
Grant Plimmer again. Years back, we used to have the AGMs in one of the ballrooms or over in the hotels. And then that highlighted quite a nice level of hospitality with food offerings and such served by servers, which really, I mean, what we're going to be having soon is a bit of a bun fight in the corridor. Very hard to talk to any of the directors or senior staff. And it's definitely not highlighting what SkyCity is all about with its hospitality.
That's a very, very fair point. And you wouldn't be the first person to raise that. If you get to know me, you'll know I've got gauze pockets, and we don't like to spend money. But this is your money we're spending, right? So, you know, there's a balance here. So, you know, we want to put on a show for you guys, but we don't want to spend your money unwisely either. Hopefully at some point, hopefully next year, we'll have you in the NZICC, and maybe we put on something a little bit bigger, a little bit bigger that year. But just remember, gauze pockets, and we're looking after your money wisely.
I spoke a bit further about the responsibility of the board. My question comes back now. The agreement which you have with the independent, even the CEO, they never disclose the agreement. We have a lot of reference. The CEOs sometimes don't perform at all.
They get a chunk of short-term incentive, a long-term incentive, and go away. Like one example, I can give you one. You probably know that in the media, Alan Joyce was a CEO for Qantas. What he did, he ran away with the money they got there, sold his shares. Now he got there was involved with the Prime Minister of Australia was involved on that too. So that's a corruption that happens. But we don't have indication from the board when you appoint an independent director, what the agreement, the contract we have with them. Because could they have, they resign, you still get a chunk of money in their pockets. And they shouldn't get that. Like one example now, you know, we, the shareholders, have to pay for the fines, which was decided by the board itself. And they knew the regulation. You know the regulation very well.
You cannot say the government changed. The government are more restricted on that because there's a lot of corruption in there. I know some of the corruption because it came in the media there. Some deposit money from Hong Kong here in the casino, NZD 500,000. You cannot get it in Australia with NZD 500,000. But they put in the casino there. And the casino, he paid a bit of the money, and then he takes a check from the casino. So this means...
Would you like me to answer the question?
You know, I just try to say what to the end. And then he goes to the bank, deposits the money because the bank will accept the money from the casino. Okay? So that's when the money laundering they have. So they people from overseas came in. Mostly our high rollers do that. The government picked those things, and that's why he put the regulation.
So I think the main question there is around how independent directors, but also the CEO, are remunerated. You want to make sure we're not walking away with large pockets or large amounts of money without being worth it. For directors, we just get a fixed fee. There are no bonuses. There are no incentives. Those fees are disclosed in the report every year. If we ever want to increase those fees, we have to come back to you, and you have to vote in approval to increase those fees. We cannot do that ourselves. We need to get approval from shareholders. In relation to the CEO, you will find details in the annual report of the CEO remuneration.
You will find also details of how some of those bonus payments are calculated and paid. So you will be able to see whether, you know, he earned this part of the bonus or didn't, and did he get paid or not. So those will be disclosed. And perhaps if I just continue my theme of the boss's pockets, like that does continue to remuneration, like, you know, we want Jason incentivized, and we want him to do a great job for you, right? But we don't want an easy ride here either. And I can tell you the sort of the board and remuneration committee are pretty focused on that. And lastly, I would say, yes, shareholders have absolutely suffered from payment of fines in previous years.
In the 2024 financial year, all short-term incentive payments were cancelled for that very reason, for lack of performance historically in meeting regulatory obligations. And in the prior year, there was also a deduction across the board, across all staff who received short-term incentives because of the issues we had in Adelaide. So it is not that there is no accountability happening. Any other questions from the floor? No, we have questions online. Oh, sorry, we have one up there. May we take an online?
Yes, I've got a question online. I've got a few questions. The first one comes from Jiawei Zhao. In Adelaide, you have already settled the AUSTRAC penalty. Why is there the separate Brian Martin's independent review?
So the AUSTRAC penalty was in relation to breaches of anti-money laundering obligations, which we have had.
The Brian Martin review has been set up by the state regulator who gives us the license to be the casino. The purpose of that inquiry is to determine are we suitable or not. And as Glenn mentioned before, it had started in 2022. It was put on hold, and it is in the process of recommencing at the moment. And so we might just go to the floor.
Hey, it's Ross Collinson, shareholder. I've got a couple of questions. So your debt level at the moment is 2.3 x. What's your aim to bring it down below 2? My other questions are around the loyalty scheme, especially with this next year, everything's going to be carded. The loyalty scheme since COVID has virtually disappeared effectively. Like we used to get a lot of, for Premier players, you used to get a lot of incentives to actually come. Now you don't get them, and that's why we don't come. And my final question is around the roulette tables. We still don't have enough seats.
Thank you. Well, we do want you to come. So Jason's going to talk about that in a second on debt levels. Yeah, 2.3 at the moment. Look, we've said we'd like to be a BBB in the BBB flat metrics range in the medium term. That probably would put us at 2x or a little bit above. And I'll let Jason address the next two.
All right. Thank you for the question. On the loyalty scheme, I've had a look at that, and we're currently going through a bit of a review there. I would say one of the things that I think is an opportunity for us to improve as a business going forward is to understand the true lifetime value of our players so that our loyalty program can appropriately recognize and reward players. So that's something that we're absolutely looking at.
As it relates to mandatory carded play, you're spot on with your point that as every player becomes carded over the next few months as we build up to our go live in July, greater importance on our loyalty program is very, very critical to ensure mandatory carded play is successful. So we're absolutely looking at that. So your point is well made. On the roulette seats, so apologies if we don't have enough seats. That's something I'll take away as an action, and I'll have a look at.
Thank you. Questions online?
Yes, we've got another question from shareholder Stephen Mayne. Will the chair commit to having a formal board discussion about putting up the SkyCity remuneration report for a non-binding advisory vote at next year's AGM, complying with the legal system in Australia? Seeing as we operate the Adelaide Casino, shouldn't we embrace Australian governance standards? If not, don't we risk New Zealand being viewed by international investors as a governance backwater given the remuneration report voting has become standard in many countries?
Thank you. Well, look, I'd make the point we're not Australian listed. We're an NZX listed business governed by NZX listing rules and law. We do get asked often, mainly by Australian shareholders, whether we would put the remuneration report up for a vote, which does happen in Australia. So look, I can commit. We will absolutely have a board discussion about it, but I will make no commitment as to whether we actually do do that.
We have another question from Jiawei Zhao. In the last few months of operation, have you seen any changes of customer patronage to operations versus FY2024?
You want to take that?
Yeah, sure. Thank you for the question. So we experienced reasonably strong visitation throughout FY2024, and we've seen that continuing over the last couple of months into the beginning of the financial year. It is seasonal, of course. We've got some positive expectations around the uplift that we're hoping to see over the summer period. You know, the big difference is, despite that steady visitation that we've seen, is that it's really spend per visit that we've seen come down. And as I spoke to in my remarks, we're attributing a lot of that to the economic pressures that everyone's under at the moment.
Do we have any more questions from the floor? Yes, sir.
What happens to your existing cards, such as your Blue ones and your Gold ones, when you change this over?
Yes, I'm assuming you're asking when we implement mandatory carded play, what happens with player cards?
Yeah.
So at the moment, our goal is that you'll get to keep those cards and continue to use them. So that's what we're working towards. We're hopeful that that will be the case. We've got a little bit more work to do to confirm that that's the reality, but that's certainly our intent.
More questions from the floor? No online?
Yeah, we've got a couple more. First one comes from Stephen Mayne, shareholder. Why did we roll over to AUSTRAC and settle for AUD 67 million? Surely a judge would have imposed fines much lower than that enormous sum. Can you point to any contested Australian court judgments secured by AUSTRAC that supports your decision to give away so much of our money just to avoid potential embarrassment and distraction? Could David Attenborough also comment on this issue, given his experience with Tabcorp when he was CEO?
Maybe I'll just comment on a few of those things. Well, I don't think we've avoided embarrassment. I think we've had a fair bit of embarrassment in relation to this. Number one. Number two, actually no one has ever taken AUSTRAC, never been in court to determine what these fines were. We could have decided to if we wanted to, I guess. We didn't think it was a very good idea.
However, there are a number of other companies who over the years have settled with AUSTRAC for similar issues. And so there is a track record of being able to look at their fines and decide what's roughly appropriate for us. So I would not describe us as rolling over. It was a lot of work, you know, negotiating that with them equally. You know, what they took us to task for, they were completely right. And we failed in a number of respects. So the board's view on this was to strike a fine which was appropriate, but move on and put the business in better shape. And maybe David, if you just comment briefly on Tabc orp.
Sure. I'm not sure if this is working. Similarly to the chairman's response, I mean, at the time, Tabc orp was the first company to go through an AUSTRAC investigation. It was a very protracted process for us over two years. Again, there were a number of things that Tabcorp had not done right and we fairly had to own up to and deal with and work through with AUSTRAC. There was absolutely detailed work done, and there always is in organizations working through the process, advice from lawyers and from people involved both within the business and advisors outside the business on the appropriate levels of fines. We were the first.
I think we paid probably the lowest fine, being the first. We've seen some massive fines since. And the process that Sky went through was extremely rigorous. And I think the settling at the way it was done was appropriate. Thank you.
Thank you, David. Any more questions online?
Yes, we have a question from shareholder Jonathan Shangmingo. The NZICC is a substantial capital investment that's been made. Is there any comment on the expected returns that SkyCity may make from this investment?
Look, yeah, absolutely. It is a substantial investment. When we committed to make that investment, we were permitted additional gaming machine licenses within the Red Line precinct here. So there have been, well, actually for a number of years now, those machines have been in operation and generating a return for us, which has been good. I think the primary return we will really see from this convention center opening up is just the increased patronage coming through our hotels, through our food and beverage, and through our gaming floor.
Okay, and just the last question online from Jiawei Zhao. Shareholder, what is the estimated impact to revenue in the Auckland casino once mandatory carded play is introduced?
We provided guidance back in August with the full year results around the impact to mandatory carded play of being between 15% to 20% of current uncarded revenues. The expectation is that Adelaide will be towards the higher end of that range and Auckland towards the lower end of that range. We're working hard to do everything that we can to minimize that impact. So we've got programs underway today to try and increase the percentage of carded play here in New Zealand, which is around 65% today. And the technology that we're implementing that you heard the team talk about in the video is really focused around trying to make sure that that sign-up process that players will go through who don't have a card today, we're trying to make that as seamless as possible.
All right, thank you. So we have.
No further questions online.
No further questions from the floor. Thank you. All right, well, thank you for your attendance to the resolutions. That concludes our discussion on the items of business. Voting will shortly close online. Please ensure that you have cast your vote on all resolutions. For those attending in person, please sign and place your completed voting paper in one of the ballot boxes on your way out of the theater. All votes will be counted and then scrutinized by the company's share registrar at Computershare. The results will then be advised to the New Zealand and Australian stock exchanges later today. I will now pause to allow those voting online time to finalize their votes before voting closes.