KEY POINTS:
A high roller at SkyCity who won millions of dollars in the casino's VIP gambling area last year almost forced the company to downgrade its profit forecast for investors.
Commenting on Monday's resignation of SkyCity managing director Evan Davies, Sydney-based Macquarie Equities analyst Steve Wheen said it was understood the company narrowly avoided having to lower investor expectations of its full-year profit, following a "run of luck" involving the same VIP gambler that cost it dearly during its first half.
But when he returned to the casino this year he lost heavily.
True high rollers were relatively rare at SkyCity's VIP operation so "one or two big guys" could create some volatility in its revenue.
"I understand there were one if not two individuals that were very successful against the casino in the first half and one of those guys returned in the second half and lost big time."
Macquarie understood that particular gambler had now been "precluded from playing" at SkyCity at least until the end of the year to avoid further earnings volatility. But such "cutting off" of VIP gamblers could damage the casino's reputation among high rollers.
A high-stakes gambler recalled one Asian man taking considerable wins on the baccarat table in the VIP room in the period before March.
The gambler, who did not want to be named, said the man would take along $200,000 of his own money to match the amount carried by the dealer - a psychological ploy to put him on the same level as the house.
"That way he did not feel insecure when his luck turned bad. Fear would not override him."
The gambler said the man matched the description of someone beating the house for a time as reported.
He said the Asian man would start out small, but bet all his winnings against the casino up to the maximum bet of $50,000. A series of $50,000 bets would not be unusual and the gambler had seen the man win at least $400,000 in a single session.
A SkyCity spokeswoman said the company did not comment on the activities of particular customers.
This year when SkyCity reported a "disappointing" December-half result, Mr Davies said a poor VIP gaming performance had been a significant factor. Revenue from VIP gamblers in Auckland was down by 40 per cent to $9.4 million which after commission was a $2.9 million loss compared with a net win of $11.3 million in the 2006 first half.
The number of VIP gamblers - hundreds of whom arrive each year generally from Asia with upwards of $100,000 in their pockets - had increased but too many had won, Mr Davies said.
"The maths of that business says overall, over time the odds favour the house by a small margin but from time to time this is a business where luck plays a part."
- additional reporting: Patrick Gower
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