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Key ignored advice to hike SkyCity levy

Written By: - Date published: 8:43 am, April 24th, 2012 - 27 comments
Categories: corruption, john key, national - Tags: , ,

Since 2004, the government has collected a problem gambling levy from all types of licenced gambling to fund the government’s spending on problem gambling. It was introduced along with the sinking lid on pokies (the more you look back, the better the fifth Labour Government looks, eh?).

The levy on SkyCity’s casinos is half what it is on pokies in pubs.

In 2010, officials recommended a rebalancing – more on TAB, Lotto, and casinos, less on pub pokies – to reflect both where the profits from gambling were being made and divert less money from community grants from pokies and Lotto. The Nats picked up the recommendations with one exception – SkyCity’s levy didn’t increase.

This was all going on at the same time as Key was personally approaching National’s old friends and some time donors at SkyCity to build a convention centre in exchange for relaxation of the restrictions on its cancerous activities and, then, not reviewing any of the competing bids before approving their offer.

In other news, SkyCity’s profits rose 17% to $78m last year.

Nothing to see here.

27 comments on “Key ignored advice to hike SkyCity levy”

  1. vto 1

    .

    What a surprise

  2. marsman 2

    Corruption!

  3. Hilary 3

    An inquiry into all aspects of the gambling industry would be worthwhile to uncover what is really going on behind the scenes.

  4. muzza 4

    So when will the opposition be milked it hard in public domain…

    waiting…..

  5. ianmac 5

    But wait. Casinos employ thousands of people who would otherwise be bludging on the dole. We the taxpayers should actually be paying a levy to the Casinos for such great anti-dole support and we should pay a tax discount to every gambler in support of his generosity in donating huge lumps of his income to the Casino instead of spending it on foolish stuff like bread, and vegies or shoes for the kids. So you see, Mr Key is right in his support for Casinos as they assets for a healthy thriving community.

  6. Craig Glen Eden 6

    Its getting very smelly!!!!!

  7. DH 7

    There’s some interesting stats on gaming machines at Internal Affairs here, I didn’t realise the numbers were so big;

    http://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Resource-material-Casino-and-Non-Casino-Gaming-Gambits-March-2012

    Archived stats here

    http://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Resource-material-Information-We-Provide-Archived-Gaming-Statistics?OpenDocument

    Total revenue of the 18,000 non-casino gaming machines in 2011/2012 looks to be about $860 million, or an average of $48,000 per machine. If the 2070x SkyCity machines brought in the same sums they’d pull in $100million. $100million from non-casino machines would give a minimum of $37million to charity, how much do SkyCity give to charity from total operations?

    It’s easy to see why SkyCity want more pokies. Their’s are higher dollar value than the rest and they run 24hrs so they’d probably pull in double the $48k per machine. 500x at $48k is $24million, double it and you get the $49million that was quoted by Ernst & Young.

    • freedom 7.1

      since 1996 SkyCity Auckland Community Trust has donated approximately $25 million dollars. During that same period SkyCity had revenue of over $4 billion dollars.

      makes ya laugh eh? When you’re not screaming and pulling your hair out in utter frustration

      • Treetop 7.1.1

        … and stamping your feet in frustration with POOR Sky City not being able to expand there lucrative operation.

    • Treetop 7.2

      I like the way you have tried to crunch the revenue figure off a pokie machine.

      Is it too much to ask you what the max bet per spin is on every pokie machine at Sky City?

      It is really beginning to piss me off how people are comparing a casino machine to a non casino machine when it comes to the sinking lid policy. I think it is important to not lose sight of how quick a casino machine can empty out a wallet/purse compared to a non casino machine.

      It needs to be debated that a casino creates a more HARDENED pokie player than a pub as the stakes are much higher in a casino.

      • Colonial Viper 7.2.1

        Yeah its far harder for a concerned family member to head down to the casino and get you out of there somewhere, compared to finding you at the back room in the corner pub.

    • Carol 7.3

      I have heard that a lot of the money from non-Casino gambling machines doesn’t get back to the community as it should because of the way it’s filtered through trusts. Is it possible for this to be investigated?

      • DH 7.3.1

        That was mentioned in an earlier post Carol;

        http://thestandard.org.nz/gaming-industry-whistleblower/

        Looking at the DIA stats it does raise a lot of questions. Why are some returning only the minimum 37% when others are returning over 60%. You can bet there’s no shortage of white collar fat cats milking the system there.

        There’s massive sums of money involved, I had no idea gambling on pokies was that bad or that they made so much money out of them. They average nearly $1000 per week from a single pokie!

        • Carol 7.3.1.1

          Thanks. Of course, I did read that.

          Time for a full investigation into the Joyce- Key Boardwalk Empire!

          • DH 7.3.1.1.1

            Yes I agree, and hopefully the Audit Office will take it on. One only has to look at the numbers on the non-casino pokies to work out that what Key is offering SkyCity is worth far more than the cost of a Convention Centre. Not only is it unethical it’s not even a good deal for the taxpayer.

    • Treetop 7.4

      Pokie takings steady even as machine numbers cut
      http://www.nz herald.co.nz/politics/news/article.cfm?c_id=280&objectid=10801300

      2003: 25,221 non casino pokie machines
      2005: 21,343 non casino pokie machines
      2011: 18,167 non casino pokie machines

      2003 a non casino machine average intake was $37,310
      2011 a non casino machine average intake was $47,118

      “In contrast, each poker machine at SkyCity potentially earns $140,000 a year.”

      1647 casino machines at SkyCity pulled in $118 million in six months approximately $71,645 per machine

      • Treetop 7.4.1

        I think the problem with the link is due to a gap after nz and before herald.

      • DH 7.4.2

        It’s good to see the media doing their job for a change and picking apart all the lies on this deal one-by-one. Hopefully they’ll start thinking about the economics of it and figure out just how bad a deal it is from that perspective.

        Even if we put aside the moral & ethical considerations it is still a very bad deal. The market values an investment by the return it makes, a $350million investment of this type would be expected to return a nett profit before tax of around 8-9%. That’s about $30million. It’s been calculated that the extra pokies alone will return SkyCity $49million, making that deal by itself worth some $400-450million as an investment.

        Add in the casino licence extension which must be worth a few hundred $million at least, then factor in the other concessions like extra gaming tables etc, and you’re looking at a potential market value of more than $700million…. at least twice what Key has accepted. That difference will capitalise onto the share price of SkyCity because the market will sure know how much its worth, leaving the taxpayer hung out to dry.

        Everything about this deal sucks. It’s not even good business.

  8. You_Fool 8

    “Since 2004, the government has collected a problem gambling levy from all types of licenced gambling to fund the government’s spending on problem gambling. It was introduced along with the sinking lid on pokies (the more you look back, the better the fifth Labour Government looks, eh?).”

    John Key likes to take credit for this decrease in pokie machines anytime he can; every time I hear him speak on the subject he seems to bring up the facts surrounding the drop in pokie machines since 2008 and makes it sound as though the number of pokie machines was static or increasing before that with the decrease in machines all because of the Nats, and that any extra would be still well below the 2008 level. DPF also likes to make this point…

  9. BLiP 9

    Well, not surprising, really. John Key hasn’t been able to differentiate between a casino operation and Government itself for most of his adult life. In this instance, lucky him as PM gets a peek at the “burn card”, his “hole” cards are, of course, secret, the “flop” as dealt by his advisers hasn’t been much use and now its down to the “bluff”. But, really, he doesn’t give a fuck which way this hand goes, its just a side bet which might get a cheap deal for the next National Ltd™ conference. Meanwhile, he’s still got Parata doing the Black Jack Charter, bruiser over at the Christchurch roulette wheel, Joyce at the mega public service raffle, and Blinglish wandering around the floor dispensing great wads of borrowed cash to the players. High stakes, sure, but it ain’t his money and he’s outta here soon anyway.

    • felix 9.1

      “High stakes, sure, but it ain’t his money and he’s outta here soon anyway.”

      Exactly as he’s always done. Go figure, NZ.

  10. Carol 10

    Metiria Turei has formally requested that the Auditor General investigate the deal, and shonkey’s part in it.

    http://www.stuff.co.nz/national/politics/6799816/SkyCity-deal-Call-for-Auditor-General-investigation

  11. To me the whole idea of Pokies supporting the community via trusts seems fundamentally flawed, and at best a way to legitimize the harm done. The best way to support communities would be to remove all pokies from communities.

    • Draco T Bastard 11.1

      +1

      Committing harm to the community to support the community doesn’t add up.

    • Treetop 12.1

      Read the link in 12 and you can see how Sky City (Auckland) has to be carefully managed politically.

      “Auckland accounted for 60 per cent of the group earnings, they said, exposing the business to booms and busts in one area.”

      DTB thank you for posting a correction of my error in 7.4 re a link.

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