Although there is no bar to changing laws, a future govt could face big claims if investments were affected.
In theory, Parliament has the power to make and unmake our gambling laws. In practice, the backroom contract between the National-led Government and SkyCity could stymie effective regulation of gaming for the next 35 years.
Parliament would still have the power to terminate or review the casino's licence before 2048, cut the number of gaming machines or tables it is guaranteed, or impose more onerous "harm reduction" obligations. But at a price.
Under the heads of agreement, the government would have to pay compensation although the agreement is silent about the forum for disputes. Normally, cases for breach of contract would be pursued in the courts, although the parties could agree to arbitration.
However, there is another potential fetter on Parliament's ability to re-regulate the casino's activities. Foreign investors could sue the government of the day for breaching New Zealand's international investment obligations if a new law reduced the profitability of the casino and hence the value of the company's shares.
That case would not be heard in our courts but would go before a private overseas tribunal under an increasingly discredited system of arbitration that is both costly and notoriously biased towards investors.
Worse, any agreed cap on liability would not apply because the foreign investors' claim is for breach of rights under the agreement, not under the contract between Sky City and the Crown.
Almost all our free trade and investment agreements that provide these guarantees contain a general exception that allows the government some room to regulate for public morals, or for essential interests in the case of the investment agreement with Hong Kong.
This general exception would have to be established as a defence if a foreign investor brought a claim before an international investment tribunal.
In a dispute at the World Trade Organisation between the US and Antigua, the appellate body agreed that the phrase "measures to protect public morals" covers the regulation of gambling. However, an investment tribunal is not bound to follow WTO interpretations.
The proposed Trans-Pacific Partnership Agreement would raise these risks to another level. Past US free trade agreements do not apply the standard general exception to the investment chapter. My discussions with negotiators indicate that the US has opposed such an exception to the investment chapter of the TPPA.
A draft of that investment chapter leaked last year confirms that foreign investors could allege a breach of fair and equitable treatment. Investors routinely argue that this protects them against changes to the rules after they have made their investment, where those changes substantially reduce the value of the investment or their expected profits.
The second ground would be for an "indirect expropriation". The leaked text shows that violating an explicit undertaking in a legal document is "particularly likely" to be interpreted as an indirect expropriation, irrespective of the circumstances in which the undertaking was given.
That obligation would apply even if Parliament declined to enact the heads of agreement into legislation.
The leaked text has a very vague provision for public welfare measures that can be "reasonably justified", but this would not apply in the "rare circumstances" where a written undertaking has been breached.
Under the TPPA, a future government here would be open to such claims from investors of 10 of the other 11 participating countries, including from the US. Only Australia has not agreed to adopt the investor-state dispute section of the investment chapter and that could change after their September election.
The purpose of such a claim would be to scare a government into backing down as much as securing compensation.
How real would this risk be? SkyCity Entertainment Group is listed on the Australian and New Zealand stock exchanges and a Morningstar analyst estimates the deal would boost the company's value by $200 million, which would be reflected in its share price and dividends.
Reversing the commitments could have a substantial impact, especially if it was accompanied by restrictions on gambling.
Among SkyCity Entertainment's 10 largest shareholders are four US finance companies and most of the remaining top 10 shareholders are Australian firms.
Ownership could, of course, change at any time, including by existing shareholders who manipulate their ownership to bring them within the jurisdiction of the agreement.
Opposition parties and ordinary Kiwis are right to be outraged about the National Government's convention centre-for-pokies deal and the way it is designed to bind the hands of future Parliaments.
But they also need to ensure that the TPPA does not give foreign investors in the casino, and in similarly toxic activities, more ammunition to protect their profits at our expense.
Jane Kelsey is a law professor at the University of Auckland.