The increase in pokie machine numbers at SkyCity, should its international convention centre deal with the Government go ahead, will effectively reverse two years of declines in machine numbers nationwide under councils' sinking lid policies, Prime Minister John Key says.

Public watchdog the Auditor-General will this afternoon release a report on how SkyCity's offer to build an international convention centre at its downtown Auckland site in return for gambling law changes was selected by the Government over rival bids.

The investigation was initiated after the Green Party complained about Key's involvement in early talks with the casino company.

SkyCity is understood to be seeking law changes allowing 300 to 500 additional pokie machines and wider use of technology which would increase gambling revenue in return for building the $350 million facility at no cost to the taxpayer.


Opponents raised fears that increased pokie machines at SkyCity will result in more problem gambling.

However, Key has consistently said councils' "sinking lid" policy on non-casino gaming machines means the total number of machines in New Zealand will fall despite the increase at SkyCity.

This morning he downplayed the prospect the deal would fuel more problem gambling.

"Assuming this deal will get through at broadly the number of pokie machines that we've been talking about, that stops that decline for a couple of years but overall the number of pokie machines is falling and the host responsibilities are very strong on an operator like SkyCity so I think we can cover that bit off."

Key, who has seen at least two drafts of the Auditor-General's report, says he is not concerned by its findings.

"In my view there's no political element to it."

He said detailed negotiations with SkyCity had been on hold until the report was released and whether the deal went ahead depended on whether SkyCity was still serious about it.

The casino operator last week said it was willing to proceed, "provided an acceptable return on capital can be delivered from the total project".