SkyCity Auckland to close for five days as part of license suspension settlement with New Zealand authorities

SkyCity Entertainment Group has reached an agreement with New Zealand's Department of Internal Affairs (DIA) to temporarily close its Auckland casino for five consecutive days as part of a license suspension settlement. The closure aims to address issues related to responsible gambling compliance.

The suspension stems from a February 2022 complaint by a former SkyCity Auckland customer, who alleged that the casino failed to meet responsible gambling standards between August 2017 and February 2021.

Following an investigation, the secretary of internal affairs applied for the suspension of SkyCity subsidiary SCML’s casino license in September 2023 due to concerns about detecting continuous play at the casino.

The scheduled closure is projected to impact SkyCity’s financial performance, with an expected loss of approximately NZ$5.0 million ($3.0 million) in underlying group EBITDA for FY2025. It is unclear at this point when the closure will happen, but it would settle the license suspension case.

Following the announcement, SkyCity has revised its FY2025 EBITDA guidance to a range from NZ$245 million ($148.61 million) to NZ$265 million ($160.74 million), down from the previous forecast of NZ$250 million ($151.64 million) to NZ$270 million ($163.77 million).

SkyCity and SCML have acknowledged their shortcomings in responsible gambling practices, attributing the continuous play detection failure to a design flaw in their technology system, which has since been corrected.

They also admitted to inadequate use of staff observation and intervention to identify continuous play. SCML issued a formal apology to the secretary of internal affairs for these lapses.

The DIA recognized SkyCity's prompt actions to address these issues. "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 stated.

SkyCity's chair, Julian Cook, stated that the closure would resolve the matter and highlighted the company's ongoing efforts to enhance risk management. “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," Cook added. "This is not acceptable and, as part of meeting our regulatory obligations and wider social license, we are committed to fully addressing this.”

SkyCity initiated a multi-year transformation program in 2021, aimed at strengthening risk management across its operations. The program includes recruiting directors with specialized risk experience, forming a dedicated risk and compliance committee, enhancing internal and external audit capabilities, and appointing a group chief risk officer.

Additionally, SkyCity plans to implement mandatory carded play across its New Zealand casinos by mid-2025, with its Adelaide, Australia casino to follow by the end of next year.

In April, SkyCity announced that experienced gambling executive Jason Walbridge would take over as CEO in July, replacing Michael Ahearne.