SkyCity Entertainment faces threat of revoking New Zealand casino license
SkyCity Entertainment customers in New Zealand may soon need to find alternative sources of entertainment for a few days. The country's Department of Home Affairs (DIA) wants the New Zealand Gambling Commission to approve the temporary closure of the country's three SkyCity casinos.
In a statement to the NZX this morning it was announced that the DIA had contacted the Gambling Regulatory Authority to request a temporary suspension of SkyCity's gambling license. The unusual action came after a former guest complained about debts he had accumulated at the Auckland casino. The application seeks to suspend the license for 10 days.
The council is currently considering revoking the license, which would affect SkyCity's Auckland, Hamilton and Queenstown properties and its duration. A ruling could take months, the statement said.
The sky is falling
DIA general manager of regulatory services John Sneyd said the suspension application was the result of an application being submitted under the New Zealand Gambling Act 2003. In February last year, a complaint was received from a former customer who engaged in long-term gambling at Auckland's SkyCity between August 2017 and February 2021.
The complaint states that this violates responsible gambling rules. The committee is tasked with investigating the matter in detail and deciding on appropriate measures. This differs from an audit conducted by the DIA last year that found similar irregularities.
Sneed emphasized that the Department is firmly committed to minimizing the negative impacts of gambling. He also stressed that he will remain steadfast in imposing penalties on licensed operators who fail to comply with the conditions stipulated in their licenses.
However, if the Gambling Commission takes action, it will only affect SkyCity's gambling activities. Restaurants and hotels will remain open.
SkyCity's share price fell sharply this morning in its first-quarter trading on the announcement. Prices have been relatively stable over the past month, hovering around NZ$2.33 ($1.38) with only minor fluctuations.
That changed this morning. Prices plummeted following the news and currently stand at NZ$2.02 (US$1.20) at press time.
That's well below the 2023 peak of NZ$2.62 ($1.56) set on January 12. It's also significantly lower than SkyCity's NZD 3.60 (USD 2.14) in November 2021 and NZD 4.12 (USD 2.45) in January 2020.
The bad news keeps coming for SkyCity
SkyCity just reported a 45% year-over-year revenue increase in Q2 2023, an increase that may be offset by shutdowns. The company also reported a loss for fiscal 2022 and any operational disruption will have a negative impact.
The closure will only affect SkyCity's New Zealand casino. The company operates the SkyCity Adelaide Casino in South Australia, which is facing its own problems.
There, the Australian Transaction Reports and Analysis Center (AUSTRAC) wants to know whether allegations it facilitates money laundering and helps known criminals gamble are true.
The South Australian government has also launched proceedings against it. The investigation is a result of the same allegations being investigated by AUSTRAC, with some arguing that SkyCity does not deserve to hold a casino license in the state.
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Source: www.casino.org
