SkyCity Entertainment patrons in New Zealand may soon have to find another source of entertainment for a few days. The country’s Department of Internal Affairs (DIA) wants the New Zealand Gambling Commission to approve the temporary closure of three SkyCity casinos in the country.
In a statement to the New Zealand Exchange this morning, it was revealed that the DIA has approached the gaming regulator with a request to temporarily halt SkyCity’s gaming license. This unusual action stems from a former guest’s complaint regarding their accumulated debt at the Auckland casino. The request seeks to suspend the license for 10 days.
The suspension of the license, which would affect SkyCity’s Auckland, Hamilton, and Queenstown properties, is currently under deliberation by the commission, along with its duration. A verdict may not be reached for several months, according to the statement provided.
The Sky is Falling
John Sneyd, the DIA’s General Manager Regulatory Services, explained that the suspension request is the result of the submission of an application under the New Zealand Gambling Act 2003. In February last year, it received a complaint from a former patron who had engaged in prolonged gambling sessions at SkyCity Auckland from August 2017 up until February 2021.
The complaint specified that this violated responsible gambling rules. The commission bears the responsibility of investigating the case’s circumstances thoroughly and deciding on any suitable measures to be taken. This is separate from an audit the DIA conducted last year that found similar violations.
Sneyd emphasized the department’s strong commitment to minimizing the negative impacts of gambling. He further highlighted its unwavering stance in enforcing penalties on licensed operators who fail to comply with the terms outlined in their licenses.
However, should the Gambling Commission take action, it would only impact SkyCity’s gaming activities. Its restaurants and hotels would still be operational.
This morning, during the initial quarter of trading, SkyCity witnessed a substantial decline in its shares as a result of the announcement. The price had been relatively steady over the last month, hovering at around NZD2.33 (US$1.38), with just some minor fluctuations.
That changed this morning. After the news broke, the price plummeted and is now at NZD2.02 (US$1.20) as of press time.
That’s far off its 2023 high of NZD2.62 (US$1.56), registered on January 12. It’s also substantially below SkyCity’s NZD3.60 (US$2.14) from November 2021 and NZD4.12 (US$2.45) from January 2020.
Continued Bad News for SkyCity
SkyCity just reported a 45% year-on-year revenue increase for the second quarter of 2023, which the closure could cut away. It also reported a loss for fiscal year 2022, and any break in activity will drag it down.
The closure would only affect SkyCity’s New Zealand’s casinos. The company operates the SkyCity Adelaide casino in South Australia, Australia, which is facing issues of its own.
There, the Australian Transaction Reports and Analysis Centre (AUSTRAC) wants to know if allegations that it facilitated money laundering and allowed known criminals to gamble are true.
There’s also a case against it by the South Australian government. This inquiry is the result of the same allegations AUSTRAC is exploring, with some believing SkyCity doesn’t deserve to hold a casino license in the state.
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