Labour says 'mother of all deals' a licence to print money off backs of problem gamblers.
Prime Minister John Key yesterday claimed public support for his pokies-for-national convention centre deal as the Opposition reacted angrily to a 35-year compensation clause which protects the casino against future law changes.
The Government yesterday signed an initial agreement under which SkyCity will build and entirely fund a $402 million 3500-place international convention centre. In return, the casino company is allowed 230 new pokie machines and other concessions that are worth up to $527 million over the life of the deal.
Crucially, SkyCity gets its licence extended to 2048 and until then, if any future Government changes gambling laws and affects the profits the company gets from its new concessions, the taxpayer will have to pay compensation.
SkyCity chief executive Nigel Morrison said the extension of the casino's licence was the most important aspect of the deal as it provided the certainty needed to secure long-term financing.
Mr Key believed he had the support of New Zealanders for the deal which will require changes to the Gambling Act.
"We campaigned on the issue, were upfront prior to election 2011. There will always be some opposition to these sorts of deals but some of that is rarked up by misinformation. In fact, the number of pokie machines in New Zealand is dropping overall and will continue to drop even after this deal is completed."
But Labour Party leader David Shearer labelled the agreement "the mother of all deals" for SkyCity.
"This is a 35-year licence to print money off the backs of problem gamblers. That is reckless. [It's] outrageous that Government hands in the future will be tied to this deal."
Greens co-leader Metiria Turei said the deal was "disastrous" and her party would want the legislation repealed should it be elected to government. "We consider this to be unconstitutional and it is a breach of parliamentary sovereignty to lock a government into a commercial deal for 35 years." Mr Shearer, however, said Labour wanted to see the fine print of the deal before committing to repeal the legislation.
Economic Development Minister Steven Joyce said the compensation clause was important because SkyCity was putting up $402 million which would take 35 years to recover.
"Of course governments can change and they can make a call as to what they want to do in future and so obviously this will effectively compensate the company for any change that occurs."
In a financial report on the proposal, corporate analysts KordaMentha noted the compensation clause was of benefit to SkyCity due to "recent announcements made by opposition political parties about how they propose to regulate the electricity industry".
Key features of the SkyCity convention centre deal and what KordaMentha estimates they're worth over 35 years:
* Extension of SkyCity's casino licence, due to expire in 2021: $65m-$115m
* Additional 230 pokie machines: $95m-$115m*
* Additional 40 gaming tables: $72m-$101m
* More gaming tables that can be substituted for automated table game player stations: $77m-$109m
* Ticket-in, ticket-out and card-based cashless gaming technology on all pokie machines and automatic table games: $84m-$88m
* *Includes allowing up to 17 per cent of pokie machines and automatic table games (in restricted areas only) being able to accept banknotes of denominations greater than $20.