SkyCity wants more cashless gambling machines that are banned in other casinos in the country as part of a deal with the Government in exchange for investing $350 million in a national convention centre.

The Government says the proposal with SkyCity to build the 3500-seat centre in downtown Auckland will generate $85 million a year in tourism spending, employ 1000 people during construction and create 800 jobs when the doors open for business.

The 350 to 500 extra gaming machines SkyCity is seeking in return will make up to $28 million in profit each year, according to a report from leading investment bank Goldman Sachs - an initial annual return of 8 per cent on the $350 million investment.

Goldman Sachs analyst Marcus Curley said the profit predictions were based on increased revenue from "greater gaming product and wider use of Ticket-In Ticket-Out, or note acceptors" on gaming machines.


Ticket-In Ticket-Out gaming machines print bar-coded tickets when a gambler "cashes out", rather than delivering money. The tickets have a $500 limit and can be inserted into another machine (cashless gambling) or redeemed for cash.

However, the Department of Internal Affairs believes it is unlikely the cashless technology would be permitted under the Gambling Act which requires the harm from gambling to be prevented or minimised.

This is because the ticket machines can allow gamblers:

To dissociate themselves from the reality of gambling by not using "real" money.

Gamble uninterrupted for long periods.

Increase gambling credits by $500 a time, rather than the $20 cash limit.

Be less likely to be identified as problem gamblers by casino staff.

"The only clear benefits associated with non-account-based cashless systems are operational efficiencies applying to gambling providers and some customer convenience measures that apply to players," says an Internal Affairs "interim position paper" released to the Herald under the Official Information Act.


"The benefits of non-account-based cashless systems, such as [tickets] are not sufficient at this stage to outweigh their potential for harm.

"This is largely because cashless systems are associated with the most harmful and widespread form of gambling and they are likely to exacerbate problem gambling behaviours."

The SkyCity casino already has 300 ticket machines, which were approved by the Casino Control Authority before the Gambling Act came into force in 2003. Internal Affairs "expressed concern" at the potential harm and argued the decision should be deferred until it could be considered under the legislation.

No other casino uses the technology and SkyCity has never made a formal application under the Gambling Act to the department to introduce more machines or unmanned kiosks for the redemption of tickets.

"However, the department is aware that SkyCity has long been interested in extending this technology and has expressed an interest in exploring the introduction on unmanned kiosks in the future," according to the information it released.

The Ministry of Economic Development, which is leading the negotiations on behalf of the Government, and SkyCity both declined to comment because the matters were commercially sensitive.


The Herald has been told that unmanned kiosks, where gamblers could redeem the tickets, have been discussed at a meeting between SkyCity executives, police and the department. The kiosks have been identified as a risk of money-laundering for organised crime groups.