"There was a moment of disbelief and he said 'yes'!", an onlooker said. "[The punter] just sat there and looked really shocked and didn't really say anything."
Around 30 people surrounded the man while casino staff checked the cards.
The man and the card dealer were spoken to and ushered away while bystanders were asked to delete any photos they had taken.
"They were making sure cards hadn't been added and the system hadn't been manipulated, that everything was okay," the onlooker said.
"It took 20 minutes before [the player] was taken away and the details were sorted as to how he was going to get the money."
The winner, a middle-aged Asian man, returned to the main floor later with his wife and family members and watched the table he won at.
"My friend said for him to put some more money down but he laughed and said no."
Caribbean Stud poker is a game of luck with just one hand of five cards dealt to each player. The hand is played against the house, rather than other players. The chance of being dealt a royal flush was 650,000 to one, said SkyCity spokesperson Gordon Jon Thompson.
The win was the largest at the casino for some time and the man was paid by cheque, said Thompson. The casino did not pay cash for such large sums.
Friday night's win was on the eve of Gamblefree Day, organised by the Problem Gambling Association to raise awareness of problem gambling.
Green Party spokesperson Denise Roche used Gamblefree Day to highlight the Government's deal with SkyCity to increase the number of pokie machines.
"It is critical that the full economic and social consequences of the deal are examined so the public has the full picture," she said.
"Increasing the number of pokie machines at SkyCity will inevitably lead to more problem gambling."
