Sky City wants to launch an online casino

Wednesday, 8 August 2018

SkyCity did experiment back in 2015 with a free-to-play, no stakes online gaming service.

Sky City is evaluating whether it could launch an online casino to compete with overseas-based online casinos.

Chief executive Graeme Stephens said the most likely route to launch would be to partner with an offshore-based online casino operator.

The news, revealed in Sky City's annual profits announcement to the sharemarket, has been condemned by the Problem Gambling Foundation.

'We would not want that to happen at all because online gambling creates an immense amount of risk,' said Andree Froude.

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'We don't want to see any more online gambling opportunities,' she said.

Already Kiwis could gamble online with TAB, and also play Lotto online, she said.

Stephens said Kiwis were already gambling at online casinos run by overseas-based operators.

'It's available here in New Zealand. A lot of offshore-based casino operators are making their online offerings available to Kiwis, including our own customers,' he said.

'It's something we have been looking at for a while, as we need to. We have got a large investment in bricks and mortar. The future of the world, not just our industry, but everywhere is going online.

'We are evaluating our options in that space, and if we can make something work, we would like to.

'It's a logical segue from our land-based [business] into the online.'

But there are two big hurdles for Sky City to launch an online casino. The first is surmountable. Sky City lacks the internal competence to do it, which means any launch would be likely to be in partnership with an existing overseas-based online casino operator.

'You've got to be pretty globally competent, if you are going into the online space, and we don't have any of that competence today, so if we were going to do anything, I'm pretty confident it would have to be with a partner at least to start with,' said Stephens.

'You couldn't have a second rate offering online and hope to attract business.

The second hurdle is a legal one. A law change would be needed to allow an onshore-based company like Sky City to set up an online casino.

'It's not regulated in New Zealand. Therefore there's no opportunity to create a business in New Zealand today,' Stephens said.

'Everyone that's offering product in New Zealand is doing so from offshore.'

Graeme Stephens, chief executive of Sky City, says the future of the casino industry is online.

'A huge sensitivity for us is to make sure that we are ever compliant in New Zealand. We have got massive investment in bricks and mortar here, we don't want to trip ourselves up in any way.'

'We certainly aren't going to do anything aggressive in this space that would offend our regulator here.'

Sky City had not been lobbying the Government to change the Gambling Act to give it a level playing field to compete with online casino operators based overseas,.

But Stephens had this message for Parliament: 'It's going to happen regardless, so you might as well regulate it because then you get the benefits of harm minimisation and taxes,' he said.

The Problem Gambling Foundation would like a review of the Gambling Act too, but would oppose allowing onshore companies to launch online casinos.

Instead, it would like it to explore ways New Zealand could control overseas online casino operators, such as requiring them to be licensed here, or restricting the use of credit cards to gamble on offshore-based casino sites.