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SkyCity wanted casino entry age lowered to 18, papers reveal

Published: 6:13PM Wednesday July 17, 2013 Source: ONE News

Newly released documents show that SkyCity originally asked for a whole lot more in exchange for the building of a new convention centre in Auckland.

The Ministry of Business, Innovation and Employment (MBIE) today released information on the New Zealand International Convention Centre deal.

Correspondence reveals that the casino operator originally wanted concessions around the age of admission, tax breaks and the introduction of internet gambling in exchange for building the $402 million centre.

But in a letter addressed to Roger Wigglesworth, Director of Tourism, Events and Consumer Affairs on December 22, 2010, SkyCity Chief Executive Nigel Morrison advised that he was prepared to take those proposals "off the table".

Mr Morrison said that despite SkyCity "taking all of the commercial risk in this transaction," he was prepared to forego negotiations around lowering the age of admission to the casino to allow 18-year-olds in.

Currently, SkyCity's policy is that while most facilities are open to people of all ages, customers must 20 years or older to enter gaming areas.

SkyCity also originally requested the removal of a "tax on tax".

"Also, currently casinos pay gaming tax on the GST inclusive win, and GST payable on the casino win before the deduction of casino duty. SkyCity seeks removal of this "tax on tax" which, on current figures, would be a saving of approximately $1.44 million per annum," the document said.

However, in the December 2010 letter, Mr Morrison said that he was prepared to waive the tax request as well as negotiations surrounding the possible implementation of Internet gambling.

Wellington casino option 'parked'

Letters show that SkyCity had also raised the possibility of being able to open a casino in Wellington.

In the proposal SkyCity said: "SkyCity believes it is anomalous to have two casinos in Queenstown, but no casino in Wellington. The New Zealand casino industry has matured now and SkyCity believes it is time to canvas the possibility of a Wellington casino.

"SkyCity appreciates that some level of "buy in" will be needed," the letter said.

However, in the 2010 letter to Mr Wigglesworth, Mr Morrison said that SkyCity wished to "park" the proposal for a casino in Wellington.

He said that discussion on the issue would be suspended for the time being, "pending further discussion with the Government".

Government 'played for a fool?

In response to the documents, the Green Party says that "SkyCity played National for a fool" when negotiating the deal for more gaming machines.

"Documents released by MBIE today show that SkyCity had the National Government over a barrel from the start because of its decision to rule out other tenders," Green Party co-leader Metiria Turei said.
"The National Government put all its negotiating eggs in one basket, SkyCity knew that and squeezed them for every possible advantage they could gain.

Ms Turei also said that the documents show SkyCity took a very aggressive position regarding negotiations.

"They called the shots and maximised every opportunity. SkyCity were far better negotiators and knew how to drag out the process to extract every possible win," she said.

Bill passes first hurdle

Last week, MPs voted in favour of the SkyCity bill in Parliament, with the legislation passing 61 votes to 59.

The Government negotiated a deal which means SkyCity will take on the construction, fit-out and land costs of a new international convention centre in the country's biggest city, in exchange for a 27-year extension to SkyCity's Auckland casino licence and an extra 230 slot machines and 40 gaming tables in exchange.

SkyCity would gain concessions with a net present value of $316 million, according to a base case scenario assessed by Korda Mentha. The value range was put at $261 million to $329 million.

Construction is scheduled to start in 2014 with the centre completed in 2017.

The bill now goes to select committee and will be back before Parliament later in the year for its second reading.