One of the best New Zealand casino operators, SkyCity, has come under immense pressure following threats of suspension. As a result, shares of SkyCity Entertainment plunged as much as 18.5% to NZ$1.9 and counting.
Responsible gambling has been at the core of the complaint levelled against the operator, which has already damaged the casino’s brand reputation and image.
New Zealand media have reported that SkyCity Casino had been informed by the Department of Internal Affairs (DIA) that an application had been made to suspend its casino operating license for a period “in the range of 10 days”.
A press statement by NZX, issued earlier this week, stated that the DIA had applied to the Gambling Commission to suspend the license, which would directly affect SkyCity Casino Management’s (SCML) in Auckland, Hamilton, and its Queenstown casinos.
‘’The commission will now consider whether to make an order to suspend SCML’s casino operator’s license and, if so, the duration of any such suspension. A decision may not be forthcoming for a number of months,” the NZX statement said.
The threat of suspension emanates from a complaint by a former customer who gambled at the SkyCity Auckland casino between August 2017 and February 2021. It is alleged that SkyCity contravened sections of the New Zealand Gambling Act of 2003 by not hosting a responsible gambling programme to reduce instances of continuous play by customers.
SkyCity has issued a statement in response to the allegations and threats of suspension.
“The secretary states in the application that SCML did not comply with requirements in its SkyCity Auckland host responsibility programme relating to the detection of incidences of continuous play by the customer,” the SkyCity statement said.
It added that the management of the casino would fully cooperate with the ongoing investigation.
“Given that the application is before the commission, it would be inappropriate for SkyCity to comment further on the application and allegations at this stage,” it said.
Speaking on behalf of the DIA, General Manager John Sneyd was quoted by media as saying this was an ongoing process.
“The department and SkyCity will both make submissions to the Gambling Commission. It is the commission’s role to consider the circumstances of the case and to determine what action, if any, is appropriate,” he said.
The DIA said it took gambling harm seriously and would take firm action when licensed casino operators did not comply with the conditions of their licenses.
‘’Due to the findings of this investigation, the secretary for internal affairs … believes SkyCity has breached important harm-minimization obligations including conditions of its license and conditions of its host responsibility programme relating to instances of long-play by its customers,” said Sneyd.
He said the move was to reinforce the DIA’s responsibility to keep Aotearoa safe by ensuring gambling in New Zealand was run by trusted operators and that harm to gamblers was minimized.
SkyCity’s consequences and next steps
The consequences and impact of the ongoing investigation on SkyCity have already seen a drop in the company’s share price. Since the announcement was made, share prices have dropped quickly. Beside the immediate consequence in share price drop, SkyCity could face even more severe complications in the longer term.
If its casino license is suspended for an extended period, then operations at all SkyCity casinos will potentially stop, and the loss of income would be substantial. Job security of SkyCity employees is also be under threat, and customers will have to look at other casinos for their gaming activities. If SkyCity is found guilty, it will have to own up to its mistakes, pay any possible fines and potentially shut down its operation.
The broader local gambling industry will be keeping an eye on the outcome of the investigation and take heed of licensing conditions by which it operates under, in their response to problem gambling.
The next few months will be an interesting time in the New Zealand casino industry, and the final report from the SkyCity investigation will have implications for many stakeholders. Whether SkyCity is cleared or not, what is certain is that more needs to be done by local casino operators to protect players from problem gambling.
The threat of problem gambling and at-risk individuals is on the rise in the industry, and the well-being of all players should be at the forefront of all stakeholders’ priorities going forward.