Sports betting company Canbet has abandoned plans to expand into online casinos but believes it is still an attractive investment prospect for Kiwi casino company Sky City.
Auckland-based Sky City took a 6.8 per cent stake in Canberra-based Canbet, through subsidiary Sky City International, and is in due diligence to increase
its stake to 33 per cent at a cost of $A39.1 million ($50.1 million).
At the time the deal was announced in July, Sky City managing director Evan Davies said he believed the internet wagering sector was complementary to its core business.
Sky City has also bought a casino in Adelaide this year and has opened a new casino in Queenstown .
Canbet chairman Richard Farmer said a retrospective ban on internet gaming and interactive gambling in Australia on Wednesday had put an end to his company's plans to expand from its core sports betting business into online casinos. But he did not think this would affect Sky City's plans.
"I'm sure their interest in us was because we are a wagering business. They didn't buy us because we might one day become a casino. I'm quite sure they are capable of running a casino of their own without us, so I don't think it will change anything."
Canbet notified the Australian Stock Exchange in October that it intended to apply for an interactive gaming licence to operate a casino on the internet. But Mr Farmer said those plans had been put on hold until legislation was decided. He was thankful for that yesterday, saying the company had saved about $A500,000 by not going ahead.
The company would now focus on its sports betting business, which was increasing in turnover.
- NZPA
