SkyCity to shutter Auckland casino for five days later this year as part of temporary licence suspension
Under the arrangement, SkyCity Auckland will close for five consecutive days this year. It is not clear when this will happen, but it was confirmed the closure would settle the licence suspension case.
The licence suspension application relates to a case from February 2022 during which a former customer at SkyCity Auckland filed a complaint with the Department of Internal Affairs (DIA). This referenced the casino’s failure to comply with responsible gambling requirements between August 2017 and February 2021.
Having analysed the case, the secretary of internal affairs applied to temporarily suspend SkyCity subsidiary SCML’s casino licence. At the time, it said there were concerns around detecting continuous play at the casino. The suspension application was made in September 2023.
The closure is expected to hit underlying group EBITDA in the firm’s FY2025 earnings, with a total loss of approximately NZ$5.0m (£2.3m.€2.8m/$3.0m).
As such, SkyCity is adjusting its FY2025 guidance, stating underlying group EBITDA will now range from NZ$245.0m to NZ$265.0m. This is down from previous guidance of NZ$250.0m to NZ$270.0m.
What is in the SkyCity settlement?
Reaching the settlement, SkyCity and SCML accepted they failed with responsible gambling requirements and said the specific continuous play failure was due to a design error with its technology system, although this had subsequently been resolved.
SCML also accepted it failed to effectively use staff observation and intervention, alongside its technology system, to identify continuous play. In addition, it issued a formal apology to the secretary of internal affairs over the matter.
In its own response to the case, the DIA acknowledged “swift” action by SkyCity and efforts to improve its systems.
“It is encouraging to see the work SkyCity has done to lift its performance in this area and its public commitment to continue to improve,” the DIA said.
SkyCity working to improve risk management
SkyCity chair Julian Cook said the closure would conclude the matter and SkyCity had put in place new measures to avoid such issues in the future.
“There’s still considerable work required to improve our risk systems, including our approach to mitigating financial crime and problem gambling,” he said.
“It is clear that historically SkyCity’s focus, resources and investment have fallen short of what was required of the business. This is not acceptable and, as part of meeting our regulatory obligations and wider social licence, we are committed to fully addressing this.”
SkyCity launched a multi-year transformation programme in 2021 to strengthen how it manages risk across its operations. This includes recruiting new directors with specialist risk experience and establishing a dedicated risk and compliance committee. SkyCity has also increased internal audit capabilities and external audit scrutiny and appointed a group chief risk officer.
In addition, SkyCity has committed to implement mandatory carded play across its casinos in New Zealand. This will take place by mid-2025, with its casino in Adelaide, Australia to follow by the end of next year.
Meanwhile, in April, SkyCity announced experienced gambling executive Jason Walbridge as its new CEO with effect from July. Walbridge is replacing Michael Ahearne, who recently left the group.
“We remain committed to ensuring that we provide safe and responsible experiences and environments for our people and customers,” SkyCity chief operating officer Callum Mallett said. “We will continue to engage cooperatively and constructively with our regulators.”