SkyCity Faces Casino Licence Suspension Amid Host Responsibility Concerns

SkyCity Entertainment Group (ASX: SKC), a prominent player in New Zealand's casino industry, is grappling with a significant setback as the Department of Internal Affairs seeks to temporarily suspend its casino operator's license. The move follows a complaint from a former customer regarding host responsibility, marking a pivotal moment in the nation's gaming landscape.

According to an NZX announcement, the Department of Internal Affairs has applied to the Gambling Commission for a temporary suspension of SkyCity Casino Management's license, which covers the Auckland, Hamilton, and Queenstown casinos. The suspension, if granted, is expected to last around 10 days, and the commission will deliberate on its duration in the coming months.

The complaint, lodged in February last year, alleged that SkyCity failed to adhere to host responsibility guidelines, specifically concerning the detection of continuous play by the customer. SkyCity has pledged full cooperation with the investigation, and further comments on the matter are pending until the commission's decision.

SkyCity's share price plummeted by 9.9%, or 23 cents, in the opening minutes of trading, resulting in a AU$174 million reduction in market capitalization, down to AU$1.59 billion. Market experts express concerns about the long-term consequences of this suspension, as it raises questions about the Department of Internal Affairs' stance on SkyCity and possible future issues.

In response to host responsibility concerns, SkyCity had previously highlighted its use of facial recognition technology to monitor individual behaviors on gaming floors. The company remains committed to gambling harm minimization.

This development comes on the heels of SkyCity's provision of AU$49 million to cover a civil court penalty over alleged anti-money laundering failures in its Adelaide casino. The allegations were brought forth by the Australian Transaction Reports and Analysis Centre (Austrac), accusing the casino giant of serious non-compliance with anti-money laundering and counter-terrorism rules.

SkyCity's share prices have been on a downward trend from late 2021 when they were valued at AU$3.34. The company generates a substantial portion of its annual revenue, approximately AU$926 million, from its Auckland casino operations. Further updates on this matter will be closely monitored as the situation unfolds.

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