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July 18, 2024 18 mins

SkyCity Auckland will close its casino for five days following a Department of Internal Affairs investigation – set to cost the company a million dollars a day.

It was prompted by a complaint from a customer who gambled there between 2017 and 2021 – with 23 incidents where they were able to gamble continuously without detection.

This will mark the first voluntary closure of a casino and the longest suspension of operations in a casino under the Gambling Act.

NZ Herald property editor Anne Gibson has been following this ongoing investigation for some time, and she joins us today on The Front Page to explain what this means for the country’s largest casino.

Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.

You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.

Host: Chelsea Daniels
Sound Engineer: Paddy Fox
Producer: Ethan Sills

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kiyota. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. SkyCity
Auckland will close its casino for five days following a
DIA investigation set to cost the company a million dollars

(00:26):
a day. It was prompted by a complaint from a
customer who gambled there between twenty seventeen and twenty twenty one,
with twenty three incidents where they were able to gamble
continuously without detection. This will mark the first voluntary closure
of a casino and the longest suspension of operations in

(00:46):
a casino under the Gambling Act. Endze Herald Property editor
Anne Gibson has been following this ongoing investigation for some time,
and she joins us today on the front page to
explain what this means for the country's large casino. And
it was in September last year that the Department of

(01:09):
Internal Affairs first raised that Sky City Entertainment Group could
have their operator license suspended. How long has this investigation
been ongoing, Well.

Speaker 2 (01:19):
The State's back quite a long way. A gambler visited
the Auckland property between August twenty seventeen in February twenty
twenty one, and he was there on twenty three separate
occasions which he complained about. His complaint was based on
the fact that he was not stopped from what is

(01:41):
called long play. That's when a gambler plays for many
hours in the casino, and that is something that the
casino must detect and must act on. Due to its
host responsibility program.

Speaker 1 (01:56):
Sky City Auckland will close for five days. Five days
is a long time. What exactly is closed during that
period and how much of a loss will this be
for the casino?

Speaker 2 (02:05):
The Department of Internal Affairs said the loss to income
to Scar City during that five day closure is around
five million dollars. That makes sense because we know from
the previous chief executive, Michael Lhern, that for every day
the casino was shut during the pandemic, it costs Scarcity
around about one million dollars. So that's quite a significant

(02:26):
amount of money and quite a loss to the business.

Speaker 1 (02:29):
Is one million dollars a day, that big of a
punishment for a company that presumably makes a lot more
than that each year.

Speaker 2 (02:35):
Yes, it's quite a shock. One of my colleagues pointed
out today that it would appear to us to be
the first time that a casino in New Zealand has
voluntarily agreed to shut for any length of time. And
of course these are big operations that run seven days
a week and they rely on being open and the
customers being able to walk on the door, and not

(02:58):
being able to be open is very punitive for this business.

Speaker 3 (03:04):
Obviously, this was the first time a suspension of operation
has happened at a casino like this, and we applaud
the DIA for taking this action. You know, it does
send a really clear message to any gambling operator that
if they don't uphold their host responsibilities, there are consequences.

Speaker 1 (03:25):
We should probably mention that it is the casino part. Hey,
that's closing. We don't have a date on when that
will happen yet, dore.

Speaker 4 (03:31):
We no Well.

Speaker 2 (03:31):
I talked to the Chief operating Officer, Colum Mullett. Now
I asked him about when this would occur. He said
that Scarcity is talking to the Gambling Commission about the
exact dates. He did say that it would be a
Monday to Friday, So we wondered if it would occur
over a weekend, but no, and it will start midnight
on the Sunday night, so that will be like twelve

(03:54):
oh one am on the Monday morning and then for
those five continuous days, and as I understand it, there
will be discussions between the company and the Gambling Commission
over the next month about exactly when this will occur.
It applies solely to the SCO City Auckland casino premises,

(04:16):
and of course that is surrounded by a number of restaurants, bars,
eateries and other businesses that operate independently of the casino.
Now not having the casino operating could potentially reduce the
customer foot traffic in that area, but those businesses are
separate and they are not controlled by the gambling laws

(04:40):
that only apply to the casino. And New Zealand is
pretty unusual, by the way internationally to only have one
gambling giant. Most countries like Australia or Hong Kong, the
car particularly United States, have many different gambling gaming casino businesses.
In New Zealand, we took a somewhat what would you say,

(05:03):
a measured approach to this many years ago. We thought
we'll have some gaming, but only a little bit, and
so we'll just give it to one. It's a little
bit like Sky Television, right, So we've only given the
rights to one business to do this thing, be it
cable television or gambling. Now that is pretty unusual, and
you could argue from a business perspective that it's terribly

(05:26):
restrictive because you don't have any other business coming in
raising the bar or competing.

Speaker 1 (05:32):
This latest development is based on identified failings of the
Auckland Host Responsibility Program. What is this and how did
they breach it?

Speaker 2 (05:41):
Yeah, so what happens here is that the host Responsibility
program is in place to ensure that sky City complies
with the law and it doesn't let people who are
addicted to gambling onto the premises and engaging in gambling
in their premises. Now, what has occurred here is this

(06:02):
gambler has said that on twenty three occasions there was
what is termed long play. The definition of that is
many hours at a particular game or form of entertainment
within the casino, and there are also numbers of breaks
which come into those hours. Those are also calculated. So

(06:23):
the idea here is to pick up people who have
unfortunately a gambling addiction and to not fuel that addiction,
so that those people suffer significant harm and their families
suffer significant harm. So that's the law in New Zealand,
and Sky City is responsible for upholding the law and

(06:43):
acting in a responsible way. Now, when I met Cullum Mullet,
he said to me, the team's gatted. He said the
business had not complied and on this occasion, and he
said on a number of occasions the company had failed
with this customer. He said for that they were deeply
sorry and they were being rightfully held to account as

(07:05):
a business. He said it was a disappointing day for
Ski City. He said, we don't turn up to work
each day to cause harm. We turn up to give
people a fun, exciting entertainment offering. And he said that
they were sorry that they had failed in this instance.

Speaker 5 (07:25):
I wouldn't go into any specific details on this customer
except to say that there were periods of time when
we needed to have check ins with this customer. We
didn't do that appropriately. We have fixed those issues and
since mid twenty twenty one we've been going through a
risk transformation program. But on a number of occasions we
failed and for that we're deeply sorry and being rightfully

(07:47):
held to account.

Speaker 1 (07:52):
This agreement between the DIA and sky City means the
Gambling Commission will consent to withdrawal of the press. What
could have happened if this five day stop work didn't happen, it.

Speaker 2 (08:05):
Could have potentially been more serious for the company that
had proceeded. So this is an agreement. Struck and Skar
City executives today did stress to me that this was voluntary,
that this was not something that was being imposed on
them by the DEA, that this was something that they
had agreed to, and Culmen Mullett of course front footed

(08:26):
it quite naicely too. He talked about the improvements and
he said that since twenty twenty one the company had
implemented a risk transformation program. Now then even into quite
a lot of detail about that, which was quite interesting.
He said that there are more than one hundred staff
within New Zealand properties that are focused on host responsibility
and also anti money laundering and counter terrorism obligations which

(08:51):
sky City has to buy buy as well. Now, one
thing that he mentioned which is quite controversial and most
interesting is a facial recognition technolog which Scar City is
operating now. When you are in the public areas of
their Auckland Casino building. Images of your face can be
seen the technology is being used and also on the

(09:13):
main gaming floor that is operating as well. And also
this facial recognition technology operating at the ATM machines so
that the business is alerted if people make constant cash
withdrawals or they have been within the property for an
extended period of time. So I know a lot of

(09:34):
people don't like facial recognition technology. They think it's an
invasion of their privacy. But of course from scar City's
point of view, this is one of the measures that
they are using to ready keep tabs on people there.
Perhaps an even more interesting measure is coming in. It's
called a no card, no play system. So scar City

(09:56):
is going to introduce a card system.

Speaker 4 (09:58):
Now.

Speaker 2 (09:58):
These operate properties like the Crown casinos in Australia, and
what you do is you go and sign up for
your card from the casino and you load that up
with money. All your details are on there, and of
course the company is then tracking you even more so
if you are in the property for an extended period
of time and engaging in say long play, the pokeing

(10:23):
machine that you're at will lock up. You won't be
able to continue playing. So color Mullett said that will
help to monitor people's play and spend. But he says
it really importantly as well, the player themselves will be
able to monitor what they're doing and how much they're spending. Now,

(10:45):
this card system is due to come in round about
July next year, and that makes a lot of sense
from both sides point of view. No card, no play,
and I think that could be a big step board
in terms of the host responsibility program and also in

(11:05):
terms of both the players and the gaming giant.

Speaker 1 (11:20):
So you spoke to Callum Mallett, he's the company's COO.
I also understand sky City's new CEO, Jason Woolbridge, only
started work three days ago.

Speaker 2 (11:30):
Yes, it was very interesting. There was a significant popherry
held in his and his family's honor outside the main
Auckland building last Friday, and he actually started work on
Monday this week. So they talked quite a lot at
skar City today about what he's doing. He's now in
the office and in the next couple of weeks he

(11:51):
will be visiting properties throughout New Zealand that sky City
operate and meeting staff and getting to know the bussiness.
So this is quite a significant step forward after the
loss of Michael O'Hearn who's returned to Ireland, who saw
the company through a really difficult phase through COVID when

(12:11):
the property was shut and through a lot of staff layoffs,
through a long period of time when the union was
unhappy about cuts and about what was occurring. And I
think that most people would say that Michael O'Hearn did
a pretty good job. Of course, Michael o'hearne arrived after
the quite sudden departure of Graham Stevens. His resignation left

(12:37):
people very surprised. He left in a very short period
of time and there was no explanation. So Michael a'hearn
was in charge of the business over quite a long
period of time and despite COVID, over a relatively settled
period of time.

Speaker 1 (12:52):
All of this also follows a big penalty for the
group over in Australia, Hey seventy million dollars over alleged
breaches of anti money laundering and counter terrorism financing laws.
What can you tell us about that.

Speaker 2 (13:06):
Well, wet money, money that had been buried, money that
smelled of dirt. This was a real bombshell when we
got a big document from Australia which talked about the
people in scarcity Adelaide accepting money that they plainly should

(13:28):
not have been accepting. I'm talking about wet money, as
in literally it was wet like tatwater. I have had
to explain that to a few people because they're so astonished.
And also money that had plainly been buried, So it.

Speaker 1 (13:42):
Wasn't just metaphorically dirty.

Speaker 2 (13:46):
No, it wasn't. And it wasn't wet because it had
been laundered. It was wet because someone had dug it
out of the ground presumably and it smelt of dirt
and had dirt on it. That information was contained in
documents after an investigation by ATZAC and Australia. Now what
happened there was there were people who were gambling at

(14:07):
the Adelaide casino whose jobs did not equate with the
tens of millions of dollars in some cases that they
were spending. So you know, it's up to casinos to
ensure that the money that is going through them does
not breach as you said, you know, counter tourism, anti
money laundering laws, and in this case, sci City had

(14:31):
a big problem to address there, somewhat like this situation
in Auckland with a five DIA closure, but a very
serious and very full investigation finding many problems with what
had occurred there, and again scar City says that it
has improved it has systems in place to ensure this
doesn't occur.

Speaker 1 (14:53):
Adlai Casino's operators have been slabbed with a sixty seven
million dollar fine for breaking anti money law rules.

Speaker 4 (15:01):
Sky City executive chairman Julian Cook said, we acknowledge that
as a casino operator we play a key role in
combating money laundering and terrorism financing. We except we have
failed to live up to the standard required of us,
and for this I apologize.

Speaker 1 (15:20):
Do you think the culture within casinos and those kind
of outlets has changed quite a bit over the years.
I guess gone are the days where we hear casinos
not having clocks available because they want people to gamble more,
or no windows so no daylight comes in, so you
don't know how long you've been there. I mean, we've
all heard those stories, right. It seems like there's a

(15:43):
markedly big shift because there is that pressure on casinos
to recognize that gambling is an addiction.

Speaker 4 (15:50):
Is.

Speaker 2 (15:50):
It's interesting you mentioned the no windows because I have
talked to property investors about some shopping centers not looking
out either having no windows, and a bit like the
same concept of time just vanishes. And there's so much
to do there, right, It's so much fun. And I
have been to Macaw a number of times and seen
the incredibly lavish premises there and you know, the drinks,

(16:15):
the food, the entertainment, the fun. I had a relative once.
It was at Scarcity, very late at night when someone
won a jackpot and there was a lot of lights
and chairing and excitement, and a lot of people go there.
As I understand it. I'm not interested in gambling myself,
but a lot of people go there for the fun

(16:37):
and the entertainment and the joy and the amusement that
that brings them. And look, I can understand that from
that point of view. I think in terms of the culture,
what you're getting at there is really government led initiatives
to ensure harmonimization. So the businesses that did operate in
a more or less a fair way, they're no longer

(16:58):
able to do that internationally. And also the idea that
people would enter these premises and just carry on spending
and perhaps unfortunately losing. That is not something that is
tolerated under our laws in terms of being in the
premises for an extended period of time, or being in

(17:20):
the premises, being on the premises, if you've been trespassed,
if you've been banned, if you've been found to have
an addiction, you know you shouldn't be there. So all
those sort of measures are in place to minimize harm.
That is the point that color Mullet was making today,
the scarcity. People don't go to work to cause harm.

(17:42):
They go to work because they want their customers to
enjoy themselves. That's the point I was making to me.

Speaker 1 (17:50):
Thanks for joining us, Anne. That's it for this episode
of The Front Page. You can read more about today's
stories and extensive news coverage at enziherld dot co dot nz.
The Front Page is produced by Ethan Sills and sound
engineer Patti Fox. I'm Chelsea Daniels. Subscribe to The Front

(18:14):
Page on iHeartRadio or wherever you get your podcasts, and
tune in on Monday for another look behind the headlines.
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