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 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 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 Internal Affairs first raised that Sky City Entertainment Group could
have their operator license suspended. How long has this investigation been ongoing, Well.
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 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.
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?
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 amount of money and quite a loss to the business.
Is one million dollars a day, that big of a punishment for a company that presumably makes a lot more than that each year.
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 being able to be open is very punitive for this business.
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.
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.
We no Well.
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 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, 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 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, 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 restrictive because you don't have any other business coming in raising the bar or competing.
This latest development is based on identified failings of the Auckland Host Responsibility Program. What is this and how did they breach it?
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 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 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 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 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.
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 held to account.
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.
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 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 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 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
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 is going to introduce a card system.
Now.
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 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, 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 terms of both the players and the gaming giant.
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.
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 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 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 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.
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.
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 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.
Wasn't just metaphorically dirty.
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 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 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.
Adlai Casino's operators have been slabbed with a sixty seven million dollar fine for breaking anti money law rules.
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.
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 markedly big shift because there is that pressure on casinos to recognize that gambling is an addiction.
Is.
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, 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 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 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 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.
They go to work because they want their customers to enjoy themselves. That's the point I was making to me.
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 Page on iHeartRadio or wherever you get your podcasts, and tune in on Monday for another look behind the headlines.