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Sky City, pokies and corruption

Written By: - Date published: 7:56 am, May 13th, 2013 - 50 comments
Categories: accountability, capitalism, child welfare, corruption, democracy under attack, john key, Public Private Partnerships, same old national, slippery, Steven Joyce - Tags: ,

So John Key’s (and Stephen Joyce’s) National party made sure Gilmore was out of the way before they announced their dubious Sky City for (more) pokies deal.  The pokies system in NZ is rife with dubious goings on. An article this morning on Stuff, reports on Joyce’s announcement on RNZ:

A $350 million deal to supply Sky City Casino with more pokies in exchange for a national convention centre is set to be formally announced today.

The controversial deal will see Sky City build and operate a national convention centre in exchange for changes to existing laws over the operation of casinos.

Economic Development Minister Steven Joyce confirmed on Radio NZ this morning the deal would see more pokie machines at the casino.

The article recaps that a report by Deputy Auditor-General Phillippa Smithon the Sky City deal stated there was:

 … lack of documentation and analysis for the procurement process.

There was too much focus on the politics and commercial interest and not enough on proper process, Smith’s report said.

“Although decisions were made on the merits of the different proposals, we do not consider that the evaluation process was transparent or even handed.”

Pokies are about the most addictive form of gambling. I posted before on the problems of NZ’s pokie industry  in Pokies and corruption.  I’ll repeat my comments, without the quotes from articles:

How deep does it go?

Steve Kilgallon, in today’s Stuff [31 March 2013], is reporting that evidence of wrong doing by Pokie trusts, presented to Internal Affairs mysteriously went missing. The article, perhaps necessarily because of lack of evidence, provides the most positive slant on the disappearance, putting it down to sloppiness.

It is all a bit murky.  But back in November 2010 shortly after the investigation began, Graeme Ramsey of the Problem Gambling Foundation predicted there was more evidence of abuse of the funding of Pokies trusts to come.

It seems like some in the pokie industry have a lot of influence and a long reach.  Some in this industry benefited from John Key and Steven Joyce’s SkyCity convention centre deal.  The deal was made through flawed processes, as argued by the Green Party:

The end result of this flawed process was a deal that would include an increase in SkyCity pokie machines.  Meanwhile, increasing numbers of children are left unattended around SkyCity’s gambling areas.

Significant International Affairs files going missing, deals made through flawed government processes.

So NZ is not a corrupt country, then, just one governed through sloppy processes?

Cui bono?

[update: responses, opposition]

As reported by Adam Bennett and John Armstrong in the NZ Herald (Dunne will vote for the enabling Bill and the Maori Party against).  Planned “harm minimisation” procedures may be inadequate, and

Labour Leader David Shearer last night said his party objected to the deal on two ground.

The first was that it was “a shonky process”.

“Obviously there was a backroom deal done between John Key and and his mates at SkyCity,” he said.

“Secondly, I personally find it objectionable to build a convention centre effectively on the backs of problem gamblers.”

TVNZ reports, that there is still a question mark over the TVNZ land require for the convention centre site:

“John Key keeps saying this deal is good because it’s essentially free. The cost of the deal is the social harms caused by increased gambling,” said Green Party co-leader Metiria Turei.

She added Key “has got a lot of political capital riding on this deal happening and he is going to ram it through regardless”.

“I think SkyCity wants that land for free. I think they want this as part of the deal and that is the a cost to the Government and the public,” Turei said.

50 comments on “Sky City, pokies and corruption”

  1. CnrJoe 1

    this govt makes me feel dirty

    clean green nz – yeah – Right

  2. They have given Sky an extension of its licence to 2048 from 2021 as part of the deal …

    • DH 3.1

      What wasn’t mentioned in the news was that in conjunction with the extension they’ve also made an agreement to compensate SkyCity if any future government makes changes to gambling laws that might affect SkyCity’s profits.

      Pretty cosy deal huh. Guaranteed monopoly rights for the next 35 years.

  3. David H 4

    What I want to know is how much Key and co are going to make out of this in the long run?
    ie: share packages ‘just to show our appreciation’.

    Also it now shows the rest of the world the cost of doing business in NZ is cheap. Just take out the PM for dinner a few times, he won’t remember it.

  4. David H 5

    Why isn’t John Key announcing this? As it was all his back room dealings that made it happen. Or is it so poisonous that Key don’t want a bar of it? Or is Joyce being touted as the next leader because Key has had enough, and is pissing off to Hawaii to make a fortune off of what he knows about NZ?

  5. DH 6

    This is a black day for NZ. No-one can convince me that money hasn’t changed hands here, this ranks up with the worst commercial deals I’ve ever seen and I’ve made some boners of my own that I’d be embarassed to tell anyone about.

    The Govt has gifted SkyCity an enormous commercial advantage over every other business in Auckland and a person with Key’s background must surely know that. They’ve already been quietly building a small business empire and this gifts SkyCity more control over the CBD.

    SkyCity already have a monopoly on casino gambling in Auckland. Now they have a monopoly on convention centre business. I find it inconceivable that anyone with serious business nous would allow that to happen. We’ve got a supposed free-market mob in Treasury & the likes and they say nothing about a deal that’s as anti-competitive as you can get.

    The gaming concessions almost certainly represent the extra business that SkyCity expect to generate from the convention centre. They’ve just been gifted a new captive market of fresh meat who can be directed to stay at SkyCity hotels, eat at SkyCity restaurants, gamble at SkyCity casinos etc etc. As operator of the convention centre they’ll take a lot of the bookings and enquiries which is a hugely unfair commercial advantage.

    The media have failed us badly on this.

    • Rich the other 6.1

      DH,

      ( enormous commercial advantage over every other business ?? )

      It’s not a monopoly ,you can have one to , just come up with the money.

      Key expects up to 5 million tourists a year from China , many of them love to have a gamble.
      Big Chinese business will utilise the convention centre , combining work and recreation.

      It’s pay day, just get on with it.

      • Kelt 6.1.1

        Absolutely agree

      • DH 6.1.2

        Of course it’s a monopoly you cretin. SkyCity aren’t paying a cent for the convention centre, the gaming & licence concessions they’re receiving have been valued at the same cost as the centre. Who else can build a convention centre on those terms?

        • Rich the other 6.1.2.1

          DH,
          Isn’t that what I said , Just Come Up With The Money,
          Sky city have worked out a way to do it, you could try, good luck!

          The bottom line is , Tourists need attractions to spend their money on ,this is another option for them.
          Not all tourists want to wonder around the hills and if they did the greens would object ,they might tread on a worm or something.

          • karol 6.1.2.1.1

            Sky City were given opportunities to come up with the money, in a way given to no other organisation.

          • DH 6.1.2.1.2

            Pay attention Rich, we were talking about monopolies and anti-competitive behaviour here. I bet your school report card read “could try harder”

            • Rich the other 6.1.2.1.2.1

              DH,
              Lets invite in another big international casino operator , quadruple the amount of gambling facilities and they could build a second convention centre , would that make you happy??.

              NZ is not closed to other operators, it’s open to competition.

              Again , you to can have one , just come up with the money, sky city has.

              • One Anonymous Knucklehead

                Insider trading your way to brighter future?

              • Draco T Bastard

                Again , you to can have one , just come up with the money, sky city has.

                Actually, it hasn’t – the government has.

              • DH

                You’re not exactly impressing anyone with your business acumen here Rich. It obviously hasn’t occured to you yet that the Govt could simply have sold SkyCity the extra licences and then they’d have the cash to build a convention centre free of any onerous conditions or monopoly rights. Flush with cash they could then tender it out to to the best offer that benefits Auckland instead of a deal that benefits SkyCity.

                They could also have taken the opportunity to bring some competition to the casino industry by offering up the licences as a new casino licence. They could open it up to tenders from other casino operators who are very, very, keen to set up operations here and who would pay more than SkyCity just get a foothold in the NZ market.

                The Govt would collect more than $400million from that, we’d get all the economic benefits from building a new casino and we’d also get a free convention centre. How’s that for a great deal Rich?

                You see mate, even looking at it from a right-wing business perspective it’s still a lousy deal for the country!

                • Rich the other

                  O’dear ,another dreamer.

                  (1) I don’t know what a licence is worth but $400 million ???? your dreaming.

                  (2) You are suggesting we flood Auckland with casinos , you lefty mates would disown you.

                  • DH

                    Not very quick are you Rich. It pays to look before you leap, the licences that SkyCity are receiving in exchange for the centre have been independently valued at between $328 and $412 million. That’s their estimated market value buddy, try reading the reports on the deal before you mouth off.

                    Feel look a fool yet? You should…… dreamer

                    The lefties are smart enough to realise that another casino using the same licences would create no more gambling than giving SkyCity these extra licences. They wouldn’t like either option equally but they are a little better at applying the grey matter than you.

                    • Rich the other

                      DaH, you must vote green , your only possible excuse.

                      The Corda Mentha report you quote is a report for Sky City and the Govt , no other operator.

                      The value to sky is vastly different than to any other operator, the reason being for Sky it’s enhances their current operating business and for that they are paying a premium.

                      No other operator would set up a new business which can only have 260? pokie machines and a few more tables costing $406 million , it simply wouldn’t be viable.

                      The licence values quoted apply to sky city based on what its worth to them and them only, hence a win win situation for both party’s.

                    • One Anonymous Knucklehead

                      Sky City get profits. The National Party gets political donations. New Zealand loses, but only until the next election. If Sky City can’t make a profit without insider trading and bribes then they don’t deserve a licence.

                    • DH

                      “The value to sky is vastly different than to any other operator, the reason being for Sky it’s enhances their current operating business and for that they are paying a premium.”

                      You have a reading comprehension problem, which isn’t unusual for your kind. The report made it clear that the values were lower due to SkyCity’s existing operation, in that the new pokies & gaming tables wouldn’t get the same ulitisation as existing machines. To translate that it means they’re worth more to another party who would get the full use out of them.

                      “No other operator would set up a new business which can only have 260? pokie machines and a few more tables costing $406 million , it simply wouldn’t be viable.”

                      Only a fool would suggest that other casino operators wouldn’t be interested in buying gaming licences that a large accounting firm claimed would generate income of over $40million per year.

                      “The licence values quoted apply to sky city based on what its worth to them and them only, hence a win win situation for both party’s.”

                      Stop making stuff up, bullshit & bluster doesn’t work here.

      • freedom 6.1.3

        How is it a pay day for NZ, or were you just talking about the owners again?

        • Rich the other 6.1.3.1

          freedom , ( only prosperity will give you that)

          Kelt has given a pretty good idea on that .
          But just going over the obvious,
          Employment , taxes paid , gst on gambling ,profits for share holders which includes retirement funds eg kiwi saver, growth for AK economy and plenty of rub off for the rest of the community, tourists do visit and spend at other businesses.

          That’s not bad for starters is it, try to be a little more positive , it won’t hurt.

          • karol 6.1.3.1.1

            Jam tomorrow.

            • DH 6.1.3.1.1.1

              You might find this interesting Karol, it’s an independent valuation of the gaming licences & concessions the Govt are giving SkyCity.

              http://media.nzherald.co.nz/webcontent/document/pdf/201320/KordaMentha.pdf

              It refers to another report that estimates 70% of convention goers will visit the casino.

              The report also excludes future benefits derived from the monopoly rights such as more hotels etc, it’s basing valuation figures on existing capacity. It’s pretty clear that SkyCity are getting far more from this deal than they’re putting in.

              The most puzzling thing about this is that we don’t owe SkyCity anything. They exist solely at our favour, they enjoy monopoly casino rights that were granted by statute. There’s a queue of casino operators who’d pay a fortune for a licence to operate here so we have absolutely no reason or even the slightest obligation to do SkyCity any favours. They owe us and yet this Govt have been bending over backwards to pander to them. Have to wonder why…..

      • Murray Olsen 6.1.4

        They didn’t come up with the money. We did, via our ever generous prumstah. Sky City came up with a compliant prumstah.
        At the moment, we get about 2.5 million tourists a year from all countries. Key expects twice this from China alone? Where will they stay? Who will run the extra flights? He also expected Gilmore to be a good MP.
        Rich Chinese do not gamble at poker machines. Poor Kiwis with gambling problems or drug dealers with money to launder do.
        Why would all these Chinese business people come to Auckland for a convention? It won’t be to listen to your bullshit, that’s for sure.

        We have the worst type of corruption in the world. We can’t pay $20 to get off a traffic ticket, but a big company can pay a few million (refunded with interest by the present regime) to get industrial law changed. Just like our birthright of clean water, lush forests, and kaimoana, it is available and for sale to the rich.

  6. Kelt 7

    ACC is one of the largest shareholders in Skycity (approx 4% when I last looked). Many of the Kiwisaver funds are also significant shareholders
    The Governement has recently allowed visa concessions to Asian businessmen
    Sky city have been given permission by the Gambling Commission for overseas bank accounts.
    Sky City have been given permission from the Gambling commission for a revamped upper floor with private gaming rooms
    WHY
    The pokies were a smoke screen which sucked in every egotistical politicain and lazy journalist.
    Sky want to increase their revenue from international clients. (Its currentl;y around 3%. The Ozzy casinos get around 17%) The tables were what they were after. Its for their new private gaming rooms aimed specifically at the asian market

    And whats wrong with that. Im sick of the liars from the problem gambling foundation and green party’s, feathering their own nests by spouting of fraudulent tales of woe when the real story never got aired.

    Is it fair that Sky City targets high rolling asian punters. Yes or No

    • ghostrider888 7.1

      Yes, if costs to New Zealand society are ameliorated.

    • fender 7.2

      So a new sign outside will read: Asians Only. Yes or No?

    • prism 7.3

      Oh Kelt I hope you are rolling in it, whatever is important to you and nice, but I fear that outside of that you have a tainted smell which will grow to a stench, and even niceness can go bad given time..

    • Draco T Bastard 7.4

      The only people lying about this so far have been National but that’s normal for them.

  7. prism 8

    Sky City is introducing more measures to identify problem gamblers and stop them. Is that to identify which gamblers to facilitate and massage, and stop them leaving too early, ie before they have spent the week’s electricity and medicine money?

    We didn’t have pokies here before Roger Douglas and his band of hoons and smartarses got in and said that business was generic, so gambling to excess and drinking to excess is good business. Then they learned how it can be subtly encouraged by psychological measures and general PR advertising, while uttering weasel words about ‘individual’ control and assisting the ‘very few’ unhinged people who become addicted and sick and waste and damage their own lives and prosperity and spoil the lives of their connections.

  8. Martin Legge 9

    Steve Kilgallon’s article about a significant file being lost by internal affairs does give an impression of sloppiness but let say it is far more contrived than that. The lost file contained conclusive documents and testimony linking a pokie trust, The Trusts Community Foundation (TTCF) of West Auckland to serious illegal activity involving the approval of millions of dollars of grants from 3 South Auckland Bars back to the interests of Otago Rugby and Racing. Why? – because those interests had an ownership/interest in the bars and wanted all the proceeds for themselves while South Auckland communities were deliberately starved of those funds.

    At the time Senior DIA Mgt must have become aware the file was lost, rather than look for the file or simply go back to the persons who provided the information, they instead granted TTCF a “clean bill of health” and embarked on a campaign of covering up the loss and fudging the facts from Steve Kilgallon, the public, the OAG and even their own Minister (Chris Tremain), all the time knowing there will never be any repercussions or accountabilty for corporate pokie trusts from this Government.

    • ghostrider888 9.1

      there was a series ran in The Herald (or Dominion Post) on the corruption revealed by a former “Trusts” overseer; it was the messenger they came gunning for.

  9. Matt damon 10

    Matt Damon !

  10. “Greens co-leader Metiria Turei said the deal was “disastrous” but she had not yet sought legal advice on the implications of rejecting the deal.

    She said it could become a bottom line in future coalition discussions between the Greens and Labour and the Greens would want the legislation repealed.

    “Whether we can negotiation that with them in the future – we will see. The Green Party does not accept being held to ransom like this and will repeal this legislation if we get into Government,” she said.”

    Good on you, love.

    “Shearer said governments should be able to make changes to legislation but he would not make a commitment to stopping the deal, saying he would look at the fine print.”

    Friction burns on the palm of his right hand says what?

  11. Martin Legge 12

    The reason Labour is not all over the rorts within corporate pokie trusts but in particular The Trusts Community Foundation Ltd, is because West Auckland is David Cunliffe’s territory. He has saved their skins in the past and no doubt he’ll do it again. He is happy to come out against Sky City Casino because TTCF and its largest clients, the Portage and Waitakere Licensing Trusts, will have made it clear that more pokies at the casino will the gambling business out west.

    Interesting to hear on the Duncan Garner radio show how Sky City CEO, Nigel Morrison, produced stats that point to the fact that largest numbers of problem gamblers are caused by the bars and clubs scattered throughout our community and not casinos.

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