The Sky City deal

Lincoln Tan at NZ Herald reports:

The Government is negotiating with entertainment group SkyCity to build the country’s largest convention centre in Auckland despite strong political opposition.

Prime Minister John Key said the project would create jobs, boost tourism and put the country on the map as a “business events destination”.

“An international-sized convention centre is essential for New Zealand to tap into the growing market of high value business visitors we are currently missing out on,” Mr Key said.

He said the tourism industry and business sector had been asking for an international-sized convention centre for years.

I think almost everyone agrees an international-sized convention centre is a good thing, as extra tourism is very positive – improves the current account deficit, creates jobs, boosts the tax take and generally grows the economy.

The proposed 3500-seat convention centre would be built between Hobson and Nelson Sts and is expected to provide an estimated $90 million boost to the economy through new spending by additional international visitors.

It is projected to attract 183,000 delegates annually, adding an extra 101,000 visitor nights and 350,000 additional delegate attendee days in Auckland.

SkyCity will pay the full construction costs for the centre, estimated at $350 million, but has asked that the Government consider alterations to gambling legislation and regulations.

Businesses, unions and lobby groups constantly ask the Government for law changes that they feel are beneficial to them, and New Zealand. This is not unusual.

They key is how reasonable or desirable are the changes, and weigh them up against the projected 1,000 extra jobs.

First lets look at what has been ruled out:

Mr Key said any discussion on reducing the entry age of 20 to casinos, allowing SkyCity an internet gambling licence or additional casino licences had been ruled out.

Personally I think the entry age should be 18 anyway. As much as possible we should have just two ages denoting the boundary from youth to adult. At 16 you should gain some initial rights – sex, driving, etc. And at 18 you should get the rest of your adult rights.

I also think regardless of ’s wishes, we should allow Internet gambling. By banning it in NZ we drive people to use offshore sites which are less safe and may rip people off. Far better to allow it in NZ and regulate it.

But these have been rejected regardless. On the issue of an additional casino license, I agree with the Government that this should not be “gained” in this way. There should be a competitive tender for licenses in new regions. Mind you, I actually would personally allow multiple licenses in cities.

So what is up for consideration:

Areas under negotiation include an extension of SkyCity’s licence beyond 2021 and a proposed increase in gambling tables and machines at its Auckland casino.

I can’t say a licence extension is a big deal. Hard to imagine a scenario where they don’t keep the licence anyway. This is just about having security of investment.

I also have to say I don’t see an issue with increased tables and machines. If the convention centre is going to bring in tens of thousands more visitors and hence casion patrons, then you will need extra capacity for them.

“Any changes to gambling regulations will be subjected to a full public submission process,” Mr Key said.

So people should have their say. I haven’t looked at the exact details, but on the surface it seems like a no brainer. A $350 million construction, an extra $90 million a year economic growth, an extra 100,000 visitor nights and 800 – 1,000 new jobs seems a great deal of benefit, and the changes sought is stuff which generally I think we should be doing anyway.

Yes some people have problems coping with gambling, and they should be given support and tools to help them. But for millions of New Zealanders, gambling is just a bit of fun – whether it be Lotto, Instant Kiwi or a visit to the casino.

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