SkyCity Casino's License Has Been Temporarily Suspended

Robert Longthorpe - Senior Writer
Robert Longthorpe
12 September 2023 in News
SkyCity Casino License Temporarily Suspended

New Zealand's esteemed SkyCity Entertainment was hit hard as the country's Department of Internal Affairs (DIA) moved to provisionally suspend the license of its SkyCity Casino Management (SCML) division. This isn’t the first time SkyCity has been in hot water, just a few months ago they faced money laundering charges on its Adelaide branch.

This news sent its shares plummeting by a massive 18.5% – a drop that hasn't been observed since April 8th, 2020. As a result, over $154.3 million of its value was wiped off, marking a significant setback for the company. The suspension concerns its licenses for casinos in notable areas such as Auckland, Hamilton, and Queenstown.

The Root of the Controversy: A Client’s Complaint

The move by the DIA was instigated by a complaint filed in the previous year by a former client of SkyCity. The client had been an active player at the SkyCity Auckland casino from August 2017 until February 2021.

The complaint highlighted that the SCML had failed to meet the standards set in its SkyCity Auckland Host Responsibility Programme, particularly in detecting long hours of continuous play by the customer. Responding to this, SkyCity stressed that if the suspension were to take place, its non-gaming operations such as hotels and restaurants would remain unaffected.

Global Scrutiny: Challenges from Down Under

It's not only in New Zealand that SkyCity is facing challenges. Just last year, Australia's financial crime regulator initiated civil proceedings against SkyCity’s Adelaide casino. The core issue revolves around a case filed by the Australian Transaction Reports and Analysis Centre (AUSTRAC).

They alleged that SkyCity demonstrated systematic negligence towards anti-money laundering and counter-terrorism financing laws. The company, recognizing the potential gravity of the situation, has proactively allocated AU$45 million to cover any civil penalties that might arise from this case.

The Larger Financial Picture

The current turbulence has sparked concerns among industry experts. Andy Bowley, head of research at Forsyth Barr, estimated that a 10-day suspension could reduce revenue by about $NZ13 million and EBITDA by $NZ7 million.

Another voice from the financial sector, Matt Goodson, managing director of Salt Funds, voiced concerns about the long-term implications of a suspended license, especially concerning the Department of Internal Affairs' view of SkyCity.

Embracing Technology: A Commitment to Responsibility

Amid all these challenges, SkyCity's commitment to responsible gambling remains unwavering. The company's chief executive, Michael Ahearne, revealed the deployment of facial recognition technology from a local Kiwi business.

This technology, which has been running in Auckland and soon to be in Hamilton, is focused on identifying problem gamblers, ensuring the gaming experience remains safe and responsible for all patrons.

SkyCity Entertainment's Notable Assets

SkyCity Adelaide

Originally purchased by the SkyCity Entertainment Group in June 2000, SkyCity Adelaide has undergone remarkable development over the years. From its initial count of 767 gambling machines and 72 table games, it has expanded to house 990 gambling machines and 90 gambling tables.

A unique feature of this establishment is that it is the sole recipient of a table gambling license granted by the South Australian Government. This not only provides it with an exclusive status but also gives it a monopoly in the state's gambling sector. To bring the casino closer to Adelaide's picturesque riverfront, SkyCity funded a substantial $339 million expansion in 2011.

SkyCity Auckland

Undoubtedly one of the crown jewels in the SkyCity group's portfolio, SkyCity Auckland is the largest casino in New Zealand. Strategically situated in Central Auckland, it boasts a vast array of gambling options, featuring 1,647 gambling machines and 110 tables. Beyond the gaming, SkyCity Auckland is a multifaceted entertainment hub, anchored by the towering 328-metre Sky Tower.

Within its precincts are two hotel accommodations: the four-star SkyCity Hotel, popular among families, business travellers and casino patrons, and the luxurious five-star SkyCity Grand Hotel, catering mainly to VIPs and high-stakes gamblers.

The latter, with its 316 rooms spread across 21 floors, offers amenities such as a fitness centre, spa, and 24-hour room service. The casino also pledged, in a 2013 agreement with the government, to construct a convention centre capable of hosting 3,500 guests. This $402 million project faced challenges, notably a significant fire in October 2019.

SkyCity's Other Establishments

In Hamilton, the SkyCity Hamilton casino, part of the Riverside Centre, has become a local hotspot since its inception in September 2002. Besides its gaming attractions, the locale offers restaurants, bars, and even ten-pin bowling.

Queenstown, meanwhile, enjoys the distinction of being the only New Zealand region with two SkyCity casinos: SkyCity Queenstown and the SkyCity Wharf Casino in the Steamer Wharf complex. Though smaller in scale, they are vital components of SkyCity's vast entertainment empire.

In Search of Alternatives: A Haven Online

With the potential suspension of SkyCity's license looming, New Zealand's casino players may find themselves seeking alternative gaming venues. Fortunately, the online realm offers a plethora of choices. We encourage players to consult our comprehensive lists of reputable and licensed online casinos tailored for NZ players, ensuring a seamless and secure gaming experience.

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