SkyCity Faces Potential 10-Day License Suspension

By Gavin Harper Updated: September 2023

Sky City the New Zealand-based casino group has found itself in a precarious situation, . This unexpected turn of events has sent shockwaves since it just disclosed the prospect of losing its casino licences in the nation for a 10-day period through both the NZX and ASX markets, resulting in a 17% sell-off of SkyCity shares on the ASX during Monday’s trading session.

License Suspension and Its Implications

In a statement released to the public, SkyCity disclosed that the New Zealand Department of Internal Affairs had notified them of an impending request to suspend their casino operator’s license for approximately 10 days. The repercussions were immediate, with the company’s shares plummeting by around 14% by the end of the trading day.

The license suspension primarily concerns SkyCity Casino Management’s licenses for its Auckland, Hamilton, and Queenstown casinos. The next course of action hinges on the Gambling Commission, which will review the application and determine the duration of the license suspension.

The Complaint That Triggered It All

The chain of events leading to this situation began with a complaint from a former customer who had been a patron of the casino from August 2017 to February 2021. The heart of the application alleges that SkyCity failed to adhere to the requirements outlined in its Sky City Auckland Host Responsibility Programme, specifically in identifying instances of continuous play by the customer.

SkyCity has stated its unequivocal commitment to cooperate fully with the application and the upcoming investigative process. At this juncture, the company has refrained from offering further commentary on the allegations, citing the ongoing nature of the application before the commission.

The Department of Internal Affairs (DIA) is now intensifying its investigation into the matter, raising concerns within the company and among its stakeholders.

Further Investigations

As reported by John Sneyd, a spokesperson for the DIA, the responsibility of ensuring the gambling sector operates under the guidance of trustworthy operators falls squarely within the department’s purview. Licensed operators are also mandated to adhere to strict guidelines aimed at minimizing gambling harm. However, due to the ongoing nature of the investigation into SkyCity, the DIA refrains from commenting on specific applications at this time.

Sky Casino Group

Andree Frounde, spokesperson for the Problem Gambling Foundation, underscored the importance of casino staff monitoring customers who engage in prolonged gaming sessions. Frounde emphasized that extended exposure to gambling without breaks could lead to severe harm for vulnerable individuals. Notably, the foundation had previously submitted concerns regarding SkyCity’s host responsibility requirements, highlighting the increased risk of gambling problems for customers who played continuously for three hours or more.

A Pattern of Regulatory Challenges

This recent incident is not an isolated case, as SkyCity has been no stranger to regulatory scrutiny concerning its casinos. The company is currently under investigation for possible money laundering issues associated with its Adelaide casino. These investigations involve AUSTRAC, the federal government’s financial intelligence regulator, as well as a separate inspection by the South Australian Liquor and Gambling Commission.

In a proactive move, SkyCity recently disclosed its engagement of an independent expert to assess the casino’s enhanced anti-money laundering and anti-terrorism programs. This comprehensive review includes an evaluation of their implementation and effectiveness. This step follows a temporary pause in a South Australian government-commissioned independent inquiry, initiated in response to AUSTRAC’s allegations against the Adelaide casino and SkyCity regarding the adequacy of their anti-money laundering and anti-terrorism programs in December 2022.

Broader Implications for the Casino Industry

These developments are part of a larger investigation of anti-money laundering and counter-terrorism funding rules. Major casinos, including Crown Casinos in Perth, Melbourne, and Sydney, as well as Star Casinos in Sydney, Brisbane, and the Gold Coast, have also come under regulatory scrutiny.

In conclusion, SkyCity’s potential 10-day license suspension has sent shockwaves through the industry and raised serious questions about compliance and regulatory oversight. As the investigations unfold, the entire casino industry in Australia and New Zealand will undoubtedly be watching closely, as this situation could set a precedent for future regulatory actions.