New Zealand’s only listed gambling business, which has a market capitalisation of $1.3 billion, is due shortly to name its new chief executive just as gambling investigations are under way on both sides of the Tasman and a new five-star luxury hotel is due to open.
Whoever takeson the job will be dealing with Government authorities here and in Australia, responding to investigations about how the business dealt with alleged problem gamblers.
It’s now 12 weeks since the company told the market its boss was leaving.
On October 16, SkyCity Entertainment Group’s chairman Julian Cook announced that Michael Ahearne was resigning at the end of March and said the business was going on a recruitment drive for internal and external candidates.
That CEO hunt comes at the same time the company is under investigation by the Department of Internal Affairs and an Australian regulator for how it handled gamblers in Auckland and Adelaide.
Julian Cook is SkyCity chairman. Photo / Chris Steel
In September, Internal Affairs’ general manager of regulatory services John Sneyd said it had completed an investigation into SkyCity’s gambling harm minimisation practices.
Due to the findings, the secretary and chief executive for Internal Affairs applied to the Gambling Commission to suspend SkyCity’s casino operator’s licence. That application is being considered by the Gambling Commission, which is to independently determine whether SkyCity has breached its legal obligations, and whether to order a licence suspension.
“The secretary believes SkyCity has breached important harm-minimisation obligations including conditions of its licence and conditions of its host responsibility programme relating to instances of long-play by its customers. This is an ongoing process. The department and SkyCity will both make submissions to the Gambling Commission. It is the commission’s role to consider the circumstances of the case and to determine what action, if any, is appropriate,” Sneyd said in September.
SkyCity Entertainment Group's chief executive Michael Ahearne has resigned. Photo / Peter Meecham.
Nothing has since been announced.
Meanwhile, the Australian Transaction Reports and Analysis Centre is taking the company to court. Austrac is the federal agency responsible for detecting, deterring and disrupting criminal abuse of the financial system to protect the community from serious and organised crime.
Peter Soros, Austrac deputy chief executive, said in December 2022: “Investigations into SkyCity had found systemic failures in its approach to anti-money laundering and counter-terrorism financing obligations ... [and] identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence. SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.”
Ahearne is leaving to return to Ireland.
Simon Jamieson (left) and Callum Mallett at the NZIC in 2016. Photo / Jason Oxenham
In an exclusive interview on October 16, Ahearne said he and the family would go home. He joined the company in December 2017 as group chief operating officer and was appointed chief executive in November 2020.
Asked about giving six months’ notice when former CEO Graeme Stephens left suddenly last decade, Ahearne said: “You know what? I’ve always tried to do the right thing by the organisation. Leaving the company has been a difficult decision. I’ve loved my time at SkyCity and in NZ but the time has come to go back to my family.
“There’s no immediate crisis but I’ve been in New Zealand six years through Covid and all that. It’s time to head home. I’ll go back to Ireland, take some time off, and figure out where I go from there. I’ll be returning to County Waterford. That’s where I grew up.”
No updates have been issued to the market since the October 16 announcement.
But the market is expecting that well before the end of March.
As to who could fill Ahearne’s shoes, a spokesman said today he could give no update.
Last month, SkyCity downgraded its full-year profit forecast, blaming reduced revenue from pokie machines and the economic downturn as two of four influencing factors. Instead of making $310 million Ebitda for the year to June 30, 2024, the company now expects to make $290m to $310m.
Perhaps the strongest internal candidate to be the new CEO is current chief operating officer Callum Mallett, appointed to that role in 2021. He was previously executive general manager of hospitality and general manager of the NZICC operations from 2016, closely involved in that project. Mallett sent out an end-of-year email to staff just before Christmas.
The NZICC (left) and Horizon Hotel (right). Photo / Jason Oxenham
Some good news for the business: opening the SkyCity new five-start Horizon Hotel between the NZ International Convention Centre and TVNZ.
SkyCity announced on November 11 that Horizon by SkyCity would open on March 1, making SkyCity the largest single-site accommodation provider in New Zealand, with 938 rooms across three hotels in Auckland.
This will be the company’s third hotel in Auckland near SkyCity Hotel and The Grand by SkyCity. The new hotel has 303 rooms, including 10 suites.
Mallett said the new airbridge over Hobson St would be one entry point to the new hotel but there would be many others.
Progress on the NZICC will see that massive project nearing completion in yet what will be further good news for the new CEO.
Shares are trading around $1.82, down from $3 in early 2022.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
