John Key says the New Zealand International Convention Centre in Auckland will bring in tourists during off-peak seasons.
The first sod on the $700 million development was turned by the Prime Minister and Economic Development Minister Steven Joyce this morning.
The Sky City-backed complex on Hobson Street will include a convention centre, a five star hotel, a retail area and extra car parks.
John Key says it is pretty easy to get people to come to New Zealand in summer because for the most part the weather is beautiful.
However, he says it is harder to get them to come here in August or September, which is what the convention centre will do.
Not everyone was happy about the events today. Green Party Internal Affairs spokesperson Denise Roche said sod turning was no cause for celebration for Auckland but a disaster for the country.
"John Key and Steven Joyce may be smiling as they rub shoulders with the SkyCity executives today, but in reality the expansion of the SkyCity casino empire is a disaster for New Zealand, not a day for celebration," she said.
"The pokies-for-convention-centre deal symbolises everything that's wrong with the National Government - its willingness to trade the welfare of ordinary Kiwis for the benefit of corporates.
"The Government's relentless spin that the centre is "free" ignores the enormous financial and personal cost that will be paid by New Zealanders.
"Over 8000 more people could be affected by problem gambling as a direct result of the SkyCity deal, according to the Government's own analysis. That's not something to celebrate," she said.
"Officials warned that kids would be neglected and families broken apart, and domestic violence, suicide, crime and money laundering would increase.
"In addition, the deal itself was bad business. The value of the deal to SkyCity has continued to rise, while more and more is extracted out of the public.
"Steven Joyce allowed SkyCity to extract extras that weren't even in the original deal, including ownership of a prime piece of Auckland real estate that used to be owned by TVNZ, which SkyCity is building a five-star hotel on to house its overseas high rollers.
"I'm surprised Steven Joyce wanted to show up to the sod-turning ceremony after he was so comprehensively outplayed by SkyCity during the negotiation process," Ms Roche said.