SkyCity closes Auckland casino after resolving license suspension

As part of the agreement, SkyCity Auckland will close for five consecutive days this year. It is not yet clear when this will happen, but it has been confirmed that the closure would settle the licence revocation case.

The license revocation request relates to a February 2022 case in which a former SkyCity Auckland customer filed a complaint with the Department of Internal Affairs (DIA), alleging that the casino failed to comply with responsible gambling requirements between August 2017 and February 2021.

After examining the case, the Home Secretary requested the temporary suspension of the casino license of SkyCity subsidiary SCML. At the time, it was stated that there were concerns about the discovery of continuous gambling operations at the casino. The application for suspension was submitted in September 2023.

The closure is expected to impact the Group’s underlying EBITDA in financial year 2025 and result in a total loss of approximately NZ$5.0 million (£2.3 million, €2.8 million/$3.0 million).

As a result, SkyCity is adjusting its guidance for the 2025 financial year and indicates that the Group’s underlying EBITDA will now be between NZ$245.0 million and NZ$265.0 million, a decrease from the previous guidance of NZ$250.0 million to NZ$270.0 million.

What is included in the SkyCity settlement?

In settling the case, SkyCity and SCML acknowledged that they had breached responsible gambling requirements and stated that the specific, ongoing outage was due to a design flaw in the technology system, but that this has since been corrected.

SCML also admitted that it had failed to effectively use its technology system, observation and intervention of staff to detect persistent gambling and officially apologised to the Home Secretary for the matter.

In its own response to the case, the DIA acknowledged SkyCity’s “swift” action and efforts to improve its systems.

“It is encouraging to see the work SkyCity has done to improve its performance in this area and the company’s public commitment to further improvements,” the DIA said.

SkyCity is working to improve risk management

SkyCity chairman Julian Cook said the closure closed the matter and SkyCity had put in place new measures to avoid such problems in the future.

“Much work remains to be done to improve our risk systems, including our approach to tackling financial crime and problem gambling,” he said.

“It is clear that SkyCity’s focus, resources and investment have historically fallen short of the needs of the business. This is unacceptable and as part of meeting our regulatory obligations and our wider societal acceptance, we are committed to comprehensively addressing this issue.”

SkyCity launched a multi-year transformation programme in 2021 to improve risk management across all business areas. This includes hiring new directors with specialist risk experience and establishing a dedicated Risk and Compliance Committee. SkyCity has also strengthened internal audit capabilities and external audit review and appointed a Chief Risk Officer for the Group.

In addition, SkyCity has committed to introducing mandatory card play at its casinos in New Zealand. This will happen by mid-2025, with the casino in Adelaide, Australia, to follow by the end of next year.

Meanwhile, SkyCity announced in April that experienced gaming executive Jason Walbridge will be its new CEO, effective July. Walbridge replaces Michael Ahearne, who recently left the group.

“We remain committed to providing safe and responsible experiences and environments for our employees and customers,” said Callum Mallett, SkyCity’s Chief Operating Officer. “We will continue to work cooperatively and constructively with our regulators.”