Forum Archive Index - July 2001

["i_claudius" <i_claudius@xtra.co.nz>]

This may be of interest to SKC investors.
I've just returned from a week in Adelaide having decided there's no
substitute for first hand observation and because it's too bloody cold here.
It's important to understand that Adelaide is just a big farming town.Very
much like Christchurch but on a more populous scale.Resident behaviours and
mores reflect this.Most NZers other than those from Auckalofa perhaps would
feel very much at home there.

PHYSICALITY
The casino is located in the town centre within the main railstation
building.Spread across 2 floors,the lower is the main table gaming area with
sole access from an attractive lobby.The railway concourse is below this and
well insulated from any noise.The upper floor is accessed by a central
escalator and contains a large area of pokie machines,3 restaurants(buffet
$27,cafe approx $12,traditional dining approx $25 mains) and a "high roller"
gaming room.Several bars and plenty of sit down areas.This upper floor is
very tired looking and sedate compared with the lower floor.No gaming tables
here among the pokies.The restaurants are very good both invalue and quality
of food.The buffet is closed Mon & Tues.
The lower gaming floor has a large bar area,about 50 gaming tables and a
small number of pokie machines.Games offered include all the usual
suspects-blackjack,roulette,carribbean poker,baccarrat etc but no
pontoon.Lucky 7's and Madness as in Auckland.This floor is brightly lit and
the SKC capex spend is quite obvious compared to the upper floor.However it
still has the feel of a modernised upgrade conclave within an old
building.Traditional chandeliers have been replaced with glassy aluminium
designs & lighting effects.Layout makes good use of the space.

OPERATIONS & PATRONAGE
I was surprised that the casino did not run 24 hours.It operates from 10am
to 4am Sun to Thurs and until 6am on Fri & Sat.The staff were exceptionally
friendly and very smartly presented.There were plenty of $5 & $10 stake
tables indicating a focus on "joe ordinary punter" and maybe a reflection
clientele in general.Punters were interesting....very mixed age set.Plenty
of the blue rinse set although few younger ones on the upper floor.A
relatively small number of Asian punters.Less than I have seen at any other
Australasian casino.Table drinks service was excellent ,very timely and good
value($1 coffee/choc/fizzies).Dress code is relaxed but most patrons were
smart casual across all ages.It doesn't appear to be the social focus centre
for 20 somethings like other casinos although there were many there.Even on
the busy Fri & Sat nights it was not overcrowded.The only night I saw it
running at full capacity was the Sat night with 2/3rds the max at any other
time and about 1/2 capacity most nights.Daytime is quiet until late
afternoon.A lot of effort is made bus tripping the oldies in to the
restaurants(and hopefully onto the pokies,I presume).
Whilst turnover looked reasonable,I didn't see large amounts of $ going in
the table slots compared to Auckland or the Crown,say.Much more conservative
gamblers in Adelaide."High roller room" didn't seem busy.

CHANGES & POTENTIAL
The staff and patrons were generally very pleased with the changes SKC is
making.The staff are positive and upbeat.They're a little chagrined about
being owned by a Kiwi company but they like the improvements it has
brought.They confirm increased patronage and more young people(bigger
spenders) now the lower floor revamp is complete.Lots more room available
but not the patronage yet to utilise it.
One interesting thing I experienced was being interviewed by a patron survey
group (New Focus).This lady took me through a 15 minute structured
questionaire about my rating of appearance,table stakes,smoking
areas,drinks,entertainment,staff service,bars,restaurants etc etc.She and 2
colleagues were there all day every day surveying patrons.This said to me
that management are very conscious of the need for further change and that
they are doing the right spadework before implementing it.Good stuff.

My overall impression was that its on the improve.Lots of potential here but
it'll never be as dominant as Auckland or the Crown as an entertainment
option in Adelaide.Without being a purpose built facility,its always going
to look like that Chinese restaurant fitted into an old office
building.Financially though,its numbers have considerable upside and SKC can
do very well from it.

Finally....Yes,I did make a contribution to their takings.Adelaide is a
richer place for my passing.Those of you who saw SKC's price spike last week
can rest assured our efficient market priced in my performance in Adelaide.

This is a long post and I've left a lot of detail out.Anyone interested in
further specifics is welcome to email me.
DISCL:Long


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