SkyCity Entertainment, a prominent casino operator in New Zealand, has reported that the country’s Department of Internal Affairs (DIA) has applied to temporarily suspend the license of its subsidiary, SkyCity Casino Management (SCML). This development has had a significant impact on SkyCity Entertainment’s shares, resulting in an 18.5% drop in value.
The license suspension application was submitted to the country’s gambling commission in response to a complaint made by a former customer who frequented the SkyCity Auckland casino between August 2017 and February 2021. The complaint alleges that SCML did not adhere to the requirements outlined in its SkyCity Auckland Host Responsibility Programme concerning the detection of continuous play by the customer.
Following this news, SkyCity Entertainment saw its market value decrease by over $154.3 million, with shares hitting their lowest level since April 8th, 2020. However, the potential suspension is not expected to affect non-gaming operations such as hotels and restaurants. The final decision regarding the suspension could take months.
SkyCity Entertainment emphasized its commitment to cooperating fully with the DIA during the investigation. The company refrained from making further comments on the application and allegations at this stage, as the matter is before the commission.
The DIA confirmed that it had recently conducted an investigation into SkyCity’s gambling harm-minimization practices. According to John Sneyd, General Manager of Regulatory Services at the DIA, the Secretary believes that SkyCity breached harm-minimization obligations related to long-play instances by its customers, including conditions of its license and its Host Responsibility Programme.
This license suspension application is not the first legal issue faced by SkyCity Entertainment. Last year, Australia’s financial crime regulator initiated civil proceedings against SkyCity’s casino in Adelaide. Additionally, the operator has set aside a substantial sum to potentially cover a civil penalty resulting from an anti-money laundering case currently being heard in the Federal Court. AUSTRAC had alleged systematic non-compliance with anti-money laundering and counter-terrorism financing laws.
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