Speaker 1: Kiyota. I'm Chelsea Daniels and this is the Front Page,
Speaker 1: a daily podcast presented by the New Zealand Herald. SkyCity
Speaker 1: Auckland will close its casino for five days following a
Speaker 1: DIA investigation set to cost the company a million dollars
Speaker 1: a day. It was prompted by a complaint from a
Speaker 1: customer who gambled there between twenty seventeen and twenty twenty one,
Speaker 1: with twenty three incidents where they were able to gamble
Speaker 1: continuously without detection. This will mark the first voluntary closure
Speaker 1: of a casino and the longest suspension of operations in
Speaker 1: a casino under the Gambling Act. Endze Herald Property editor
Speaker 1: Anne Gibson has been following this ongoing investigation for some time,
Speaker 1: and she joins us today on the front page to
Speaker 1: explain what this means for the country's large casino. And
Speaker 1: it was in September last year that the Department of
Speaker 1: Internal Affairs first raised that Sky City Entertainment Group could
Speaker 1: have their operator license suspended. How long has this investigation
Speaker 1: been ongoing, Well.
Speaker 2: The State's back quite a long way. A gambler visited
Speaker 2: the Auckland property between August twenty seventeen in February twenty
Speaker 2: twenty one, and he was there on twenty three separate
Speaker 2: occasions which he complained about. His complaint was based on
Speaker 2: the fact that he was not stopped from what is
Speaker 2: called long play. That's when a gambler plays for many
Speaker 2: hours in the casino, and that is something that the
Speaker 2: casino must detect and must act on. Due to its
Speaker 2: host responsibility program.
Speaker 1: Sky City Auckland will close for five days. Five days
Speaker 1: is a long time. What exactly is closed during that
Speaker 1: period and how much of a loss will this be
Speaker 1: for the casino?
Speaker 2: The Department of Internal Affairs said the loss to income
Speaker 2: to Scar City during that five day closure is around
Speaker 2: five million dollars. That makes sense because we know from
Speaker 2: the previous chief executive, Michael Lhern, that for every day
Speaker 2: the casino was shut during the pandemic, it costs Scarcity
Speaker 2: around about one million dollars. So that's quite a significant
Speaker 2: amount of money and quite a loss to the business.
Speaker 1: Is one million dollars a day, that big of a
Speaker 1: punishment for a company that presumably makes a lot more
Speaker 1: than that each year.
Speaker 2: Yes, it's quite a shock. One of my colleagues pointed
Speaker 2: out today that it would appear to us to be
Speaker 2: the first time that a casino in New Zealand has
Speaker 2: voluntarily agreed to shut for any length of time. And
Speaker 2: of course these are big operations that run seven days
Speaker 2: a week and they rely on being open and the
Speaker 2: customers being able to walk on the door, and not
Speaker 2: being able to be open is very punitive for this business.
Speaker 3: Obviously, this was the first time a suspension of operation
Speaker 3: has happened at a casino like this, and we applaud
Speaker 3: the DIA for taking this action. You know, it does
Speaker 3: send a really clear message to any gambling operator that
Speaker 3: if they don't uphold their host responsibilities, there are consequences.
Speaker 1: We should probably mention that it is the casino part. Hey,
Speaker 1: that's closing. We don't have a date on when that
Speaker 1: will happen yet, dore.
Speaker 4: We no Well.
Speaker 2: I talked to the Chief operating Officer, Colum Mullett. Now
Speaker 2: I asked him about when this would occur. He said
Speaker 2: that Scarcity is talking to the Gambling Commission about the
Speaker 2: exact dates. He did say that it would be a
Speaker 2: Monday to Friday, So we wondered if it would occur
Speaker 2: over a weekend, but no, and it will start midnight
Speaker 2: on the Sunday night, so that will be like twelve
Speaker 2: oh one am on the Monday morning and then for
Speaker 2: those five continuous days, and as I understand it, there
Speaker 2: will be discussions between the company and the Gambling Commission
Speaker 2: over the next month about exactly when this will occur.
Speaker 2: It applies solely to the SCO City Auckland casino premises,
Speaker 2: and of course that is surrounded by a number of restaurants, bars,
Speaker 2: eateries and other businesses that operate independently of the casino.
Speaker 2: Now not having the casino operating could potentially reduce the
Speaker 2: customer foot traffic in that area, but those businesses are
Speaker 2: separate and they are not controlled by the gambling laws
Speaker 2: that only apply to the casino. And New Zealand is
Speaker 2: pretty unusual, by the way internationally to only have one
Speaker 2: gambling giant. Most countries like Australia or Hong Kong, the
Speaker 2: car particularly United States, have many different gambling gaming casino businesses.
Speaker 2: In New Zealand, we took a somewhat what would you say,
Speaker 2: a measured approach to this many years ago. We thought
Speaker 2: we'll have some gaming, but only a little bit, and
Speaker 2: so we'll just give it to one. It's a little
Speaker 2: bit like Sky Television, right, So we've only given the
Speaker 2: rights to one business to do this thing, be it
Speaker 2: cable television or gambling. Now that is pretty unusual, and
Speaker 2: you could argue from a business perspective that it's terribly
Speaker 2: restrictive because you don't have any other business coming in
Speaker 2: raising the bar or competing.
Speaker 1: This latest development is based on identified failings of the
Speaker 1: Auckland Host Responsibility Program. What is this and how did
Speaker 1: they breach it?
Speaker 2: Yeah, so what happens here is that the host Responsibility
Speaker 2: program is in place to ensure that sky City complies
Speaker 2: with the law and it doesn't let people who are
Speaker 2: addicted to gambling onto the premises and engaging in gambling
Speaker 2: in their premises. Now, what has occurred here is this
Speaker 2: gambler has said that on twenty three occasions there was
Speaker 2: what is termed long play. The definition of that is
Speaker 2: many hours at a particular game or form of entertainment
Speaker 2: within the casino, and there are also numbers of breaks
Speaker 2: which come into those hours. Those are also calculated. So
Speaker 2: the idea here is to pick up people who have
Speaker 2: unfortunately a gambling addiction and to not fuel that addiction,
Speaker 2: so that those people suffer significant harm and their families
Speaker 2: suffer significant harm. So that's the law in New Zealand,
Speaker 2: and Sky City is responsible for upholding the law and
Speaker 2: acting in a responsible way. Now, when I met Cullum Mullet,
Speaker 2: he said to me, the team's gatted. He said the
Speaker 2: business had not complied and on this occasion, and he
Speaker 2: said on a number of occasions the company had failed
Speaker 2: with this customer. He said for that they were deeply
Speaker 2: sorry and they were being rightfully held to account as
Speaker 2: a business. He said it was a disappointing day for
Speaker 2: Ski City. He said, we don't turn up to work
Speaker 2: each day to cause harm. We turn up to give
Speaker 2: people a fun, exciting entertainment offering. And he said that
Speaker 2: they were sorry that they had failed in this instance.
Speaker 5: I wouldn't go into any specific details on this customer
Speaker 5: except to say that there were periods of time when
Speaker 5: we needed to have check ins with this customer. We
Speaker 5: didn't do that appropriately. We have fixed those issues and
Speaker 5: since mid twenty twenty one we've been going through a
Speaker 5: risk transformation program. But on a number of occasions we
Speaker 5: failed and for that we're deeply sorry and being rightfully
Speaker 5: held to account.
Speaker 1: This agreement between the DIA and sky City means the
Speaker 1: Gambling Commission will consent to withdrawal of the press. What
Speaker 1: could have happened if this five day stop work didn't happen, it.
Speaker 2: Could have potentially been more serious for the company that
Speaker 2: had proceeded. So this is an agreement. Struck and Skar
Speaker 2: City executives today did stress to me that this was voluntary,
Speaker 2: that this was not something that was being imposed on
Speaker 2: them by the DEA, that this was something that they
Speaker 2: had agreed to, and Culmen Mullett of course front footed
Speaker 2: it quite naicely too. He talked about the improvements and
Speaker 2: he said that since twenty twenty one the company had
Speaker 2: implemented a risk transformation program. Now then even into quite
Speaker 2: a lot of detail about that, which was quite interesting.
Speaker 2: He said that there are more than one hundred staff
Speaker 2: within New Zealand properties that are focused on host responsibility
Speaker 2: and also anti money laundering and counter terrorism obligations which
Speaker 2: sky City has to buy buy as well. Now, one
Speaker 2: thing that he mentioned which is quite controversial and most
Speaker 2: interesting is a facial recognition technolog which Scar City is
Speaker 2: operating now. When you are in the public areas of
Speaker 2: their Auckland Casino building. Images of your face can be
Speaker 2: seen the technology is being used and also on the
Speaker 2: main gaming floor that is operating as well. And also
Speaker 2: this facial recognition technology operating at the ATM machines so
Speaker 2: that the business is alerted if people make constant cash
Speaker 2: withdrawals or they have been within the property for an
Speaker 2: extended period of time. So I know a lot of
Speaker 2: people don't like facial recognition technology. They think it's an
Speaker 2: invasion of their privacy. But of course from scar City's
Speaker 2: point of view, this is one of the measures that
Speaker 2: they are using to ready keep tabs on people there.
Speaker 2: Perhaps an even more interesting measure is coming in. It's
Speaker 2: called a no card, no play system. So scar City
Speaker 2: is going to introduce a card system.
Speaker 4: Now.
Speaker 2: These operate properties like the Crown casinos in Australia, and
Speaker 2: what you do is you go and sign up for
Speaker 2: your card from the casino and you load that up
Speaker 2: with money. All your details are on there, and of
Speaker 2: course the company is then tracking you even more so
Speaker 2: if you are in the property for an extended period
Speaker 2: of time and engaging in say long play, the pokeing
Speaker 2: machine that you're at will lock up. You won't be
Speaker 2: able to continue playing. So color Mullett said that will
Speaker 2: help to monitor people's play and spend. But he says
Speaker 2: it really importantly as well, the player themselves will be
Speaker 2: able to monitor what they're doing and how much they're spending. Now,
Speaker 2: this card system is due to come in round about
Speaker 2: July next year, and that makes a lot of sense
Speaker 2: from both sides point of view. No card, no play,
Speaker 2: and I think that could be a big step board
Speaker 2: in terms of the host responsibility program and also in
Speaker 2: terms of both the players and the gaming giant.
Speaker 1: So you spoke to Callum Mallett, he's the company's COO.
Speaker 1: I also understand sky City's new CEO, Jason Woolbridge, only
Speaker 1: started work three days ago.
Speaker 2: Yes, it was very interesting. There was a significant popherry
Speaker 2: held in his and his family's honor outside the main
Speaker 2: Auckland building last Friday, and he actually started work on
Speaker 2: Monday this week. So they talked quite a lot at
Speaker 2: skar City today about what he's doing. He's now in
Speaker 2: the office and in the next couple of weeks he
Speaker 2: will be visiting properties throughout New Zealand that sky City
Speaker 2: operate and meeting staff and getting to know the bussiness.
Speaker 2: So this is quite a significant step forward after the
Speaker 2: loss of Michael O'Hearn who's returned to Ireland, who saw
Speaker 2: the company through a really difficult phase through COVID when
Speaker 2: the property was shut and through a lot of staff layoffs,
Speaker 2: through a long period of time when the union was
Speaker 2: unhappy about cuts and about what was occurring. And I
Speaker 2: think that most people would say that Michael O'Hearn did
Speaker 2: a pretty good job. Of course, Michael o'hearne arrived after
Speaker 2: the quite sudden departure of Graham Stevens. His resignation left
Speaker 2: people very surprised. He left in a very short period
Speaker 2: of time and there was no explanation. So Michael a'hearn
Speaker 2: was in charge of the business over quite a long
Speaker 2: period of time and despite COVID, over a relatively settled
Speaker 2: period of time.
Speaker 1: All of this also follows a big penalty for the
Speaker 1: group over in Australia, Hey seventy million dollars over alleged
Speaker 1: breaches of anti money laundering and counter terrorism financing laws.
Speaker 1: What can you tell us about that.
Speaker 2: Well, wet money, money that had been buried, money that
Speaker 2: smelled of dirt. This was a real bombshell when we
Speaker 2: got a big document from Australia which talked about the
Speaker 2: people in scarcity Adelaide accepting money that they plainly should
Speaker 2: not have been accepting. I'm talking about wet money, as
Speaker 2: in literally it was wet like tatwater. I have had
Speaker 2: to explain that to a few people because they're so astonished.
Speaker 2: And also money that had plainly been buried, So it.
Speaker 1: Wasn't just metaphorically dirty.
Speaker 2: No, it wasn't. And it wasn't wet because it had
Speaker 2: been laundered. It was wet because someone had dug it
Speaker 2: out of the ground presumably and it smelt of dirt
Speaker 2: and had dirt on it. That information was contained in
Speaker 2: documents after an investigation by ATZAC and Australia. Now what
Speaker 2: happened there was there were people who were gambling at
Speaker 2: the Adelaide casino whose jobs did not equate with the
Speaker 2: tens of millions of dollars in some cases that they
Speaker 2: were spending. So you know, it's up to casinos to
Speaker 2: ensure that the money that is going through them does
Speaker 2: not breach as you said, you know, counter tourism, anti
Speaker 2: money laundering laws, and in this case, sci City had
Speaker 2: a big problem to address there, somewhat like this situation
Speaker 2: in Auckland with a five DIA closure, but a very
Speaker 2: serious and very full investigation finding many problems with what
Speaker 2: had occurred there, and again scar City says that it
Speaker 2: has improved it has systems in place to ensure this
Speaker 2: doesn't occur.
Speaker 1: Adlai Casino's operators have been slabbed with a sixty seven
Speaker 1: million dollar fine for breaking anti money law rules.
Speaker 4: Sky City executive chairman Julian Cook said, we acknowledge that
Speaker 4: as a casino operator we play a key role in
Speaker 4: combating money laundering and terrorism financing. We except we have
Speaker 4: failed to live up to the standard required of us,
Speaker 4: and for this I apologize.
Speaker 1: Do you think the culture within casinos and those kind
Speaker 1: of outlets has changed quite a bit over the years.
Speaker 1: I guess gone are the days where we hear casinos
Speaker 1: not having clocks available because they want people to gamble more,
Speaker 1: or no windows so no daylight comes in, so you
Speaker 1: don't know how long you've been there. I mean, we've
Speaker 1: all heard those stories, right. It seems like there's a
Speaker 1: markedly big shift because there is that pressure on casinos
Speaker 1: to recognize that gambling is an addiction.
Speaker 4: Is.
Speaker 2: It's interesting you mentioned the no windows because I have
Speaker 2: talked to property investors about some shopping centers not looking
Speaker 2: out either having no windows, and a bit like the
Speaker 2: same concept of time just vanishes. And there's so much
Speaker 2: to do there, right, It's so much fun. And I
Speaker 2: have been to Macaw a number of times and seen
Speaker 2: the incredibly lavish premises there and you know, the drinks,
Speaker 2: the food, the entertainment, the fun. I had a relative once.
Speaker 2: It was at Scarcity, very late at night when someone
Speaker 2: won a jackpot and there was a lot of lights
Speaker 2: and chairing and excitement, and a lot of people go there.
Speaker 2: As I understand it. I'm not interested in gambling myself,
Speaker 2: but a lot of people go there for the fun
Speaker 2: and the entertainment and the joy and the amusement that
Speaker 2: that brings them. And look, I can understand that from
Speaker 2: that point of view. I think in terms of the culture,
Speaker 2: what you're getting at there is really government led initiatives
Speaker 2: to ensure harmonimization. So the businesses that did operate in
Speaker 2: a more or less a fair way, they're no longer
Speaker 2: able to do that internationally. And also the idea that
Speaker 2: people would enter these premises and just carry on spending
Speaker 2: and perhaps unfortunately losing. That is not something that is
Speaker 2: tolerated under our laws in terms of being in the
Speaker 2: premises for an extended period of time, or being in
Speaker 2: the premises, being on the premises, if you've been trespassed,
Speaker 2: if you've been banned, if you've been found to have
Speaker 2: an addiction, you know you shouldn't be there. So all
Speaker 2: those sort of measures are in place to minimize harm.
Speaker 2: That is the point that color Mullet was making today,
Speaker 2: the scarcity. People don't go to work to cause harm.
Speaker 2: They go to work because they want their customers to
Speaker 2: enjoy themselves. That's the point I was making to me.
Speaker 1: Thanks for joining us, Anne. That's it for this episode
Speaker 1: of The Front Page. You can read more about today's
Speaker 1: stories and extensive news coverage at enziherld dot co dot nz.
Speaker 1: The Front Page is produced by Ethan Sills and sound
Speaker 1: engineer Patti Fox. I'm Chelsea Daniels. Subscribe to The Front
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Speaker 1: tune in on Monday for another look behind the headlines.