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Auditor-General to probe Sky City convention deal

Wednesday 13th June 2012

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The Auditor-General will investigate how SkyCity Entertainment Group’s proposal to build a convention centre in Auckland in exchange for more pokie machines was chosen as the best option for the government. SkyCity’s shares fell 0.9 percent.

The inquiry was announced by deputy auditor-general Phillippa Smith because her boss Lyn Provost owns shares in the casino and hotel group and couldn’t be involved.

The Ministry of Economic Development carried out an expressions-of-interest process in 2010 and in June 2011 the government announced it was negotiating with SkyCity, whose proposal had been deemed the best option.

SkyCity “will of course cooperate fully with the Auditor-General as and when required over the course of her inquiry,” general counsel Peter Treacy said in a statement to the NZX. “From SkyCity’s perspective, we were involved in a competitive selection process, responding to the governments request for expressions of interest to develop a national convention centre,” he said.

Shares of the company declined 3 cents to $3.50 on the NZX today and have dropped 2.9 percent this year.

The decision to pursue a deal with SkyCity led to an outcry from anti-gambling advocates, who said an increase in slot machines would harm the poor and vulnerable. Green Party co-leader Metiria Turei sought an investigation from the Auditor-General in April this year.

The inquiry will look at “the overall the overall process for seeking and assessing proposals for an international convention centre; the adequacy of the assessment of the likely costs and benefits of each proposal; and any other matters the Auditor-General considers it desirable to report on,” Smith said in the statement.

Turei said in a statement that negotiations over the SkyCity convention centre deal should be put on hold pending the investigation.

“I raised concerns about the fairness and adequacy of the process, especially given SkyCity was offered a law change that gave it more pokies in exchange for building the centre, and the deal didn’t appear to consider the huge social and financial costs of increased gambling,” she said.

“A deal that gives a casino more pokies and other opportunities to profit from problem gamblers is immoral,” she said. “It is appropriate that the government’s wheelings and dealings are being looked into.”

BusinessDesk.co.nz

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