Outgoing chief executive Michael Ahearne said SkyCity had invested heavily into anti-money laundering. Photo / Peter Meecham
Outgoing chief executive Michael Ahearne said SkyCity had invested heavily into anti-money laundering. Photo / Peter Meecham
SkyCity Entertainment has more than 80 staff on its payroll to manage compliance and regulatory issues, with one-off and ongoing group costs totalling $18 million last year.
The group employs about 4,500 staff across its trans-Tasman properties.
Outgoing chief executive Michael Ahearne said SkyCity had invested heavily into anti-money laundering,internal systems and host responsibility resourcing and capability, which had increased “underlying costs” by a factor of triple the amount three years ago.
That comes as the dual New Zealand and Australian listed gambling and hotel operator faces up to regulatory fallout of investigations over the past financial year.
Its Adelaide casino is being investigated by the Australian financial crimes’ unit Austrac, while the South Australian regulator, Consumer and Business Services, also reviews the property’s suitability as a licence holder.
In August, the company booked an A$45m (NZ$49.5m) provision for a potential Austrac civil penalty, including legal costs, although Forsyth Barr analysts suggested this was a ‘best case’ scenario and the true cost could be closer to $150m.
A month later, the NZ Department of Internal Affairs applied to the Gambling Commission to suspend SkyCity’s casino licence for as many as 10 days across its Auckland, Hamilton and Queenstown properties.
The market reaction to the move, largely based on a complaint dating back to 2017 by a SkyCity Auckland customer, saw SkyCity shed $296m from its market capitalisation in one day, with the share price tumbling from $2.33 to $2.02.
The stock was trading up 1.6 per cent at midday today at $1.91.
Analysts pegged a 10-day shutdown as likely to cost the casino group between $10m and $20m at earnings before interest, tax and amortisation (ebitda) level.
SkyCity Adelaide, which Australian regulators are investigating. Photo / Supplied
The same fate hasn’t befallen the Christchurch casino, with owner Skyline Enterprises describing it as “business as usual” despite issues at the larger SkyCity operations.
Skyline chair Peter Treacy said not all shareholders were “fans” of the company owning casinos, but the physical casino and its online version would be employing “leading player welfare” tools under its host responsibility programme.
Facial recognition
But, he said, the group couldn’t afford to be complacent about regulatory compliance.
“We aren’t aware of any investigations into non-compliance, though it’s fair to say the regulator has been quite active after SkyCity’s issues in both NZ and Australia.”
Ahearne, who leaves the company after six years next March, said chief among its enhancements was a facial recognition system installed at both its Auckland and Hamilton gaming floors to monitor players’ presence and “continuous play”.
In the online space, SkyCity is also in favour of online gaming regulation that is “appropriate” in the NZ context, and Ahearne said the firm was encouraged by National’s tax policy, which includes provision for an online gaming tax.
He said the group was still seeing modest year-on-year increases in ebitda across its properties, and the company was looking forward to the launch of Auckland’s 300-room Horizon hotel next March as a precursor to the opening of the NZ International Convention Centre in 2025.
