Auckland's big gamble, 10 years on

The Sky Tower is now part of city's skyline, but its casino remains unpopular with some. File picture / Brett Phibbs

Auckland mayor Dick Hubbard still gets a lump in his throat as the lift approaches metre 328 up SkyCity Tower. It's not just the anticipation of having nothing but glass between him and a messy death. From the crow's nest he can survey the harbour, the islands, the city and the suburbs of his beautiful urban charge.

Hubbard gets a less exhilarating feeling when he walks through the casino itself. On his first visit to the main gaming hall, he immediately thought it badly needed windows.

When the nicotine haze cleared - it was before the smoking ban - and he saw the infantry of cheap pokie machines with their attendant foot soldiers, their pink eyes like glazed hams, fixed with hope and fatigue and obsession, he disliked it even more. He thinks the SkyCity complex has done good things for Auckland but he won't take overseas visitors to the casino.
When plans for SkyCity's Auckland casino were rolled out over a decade ago, people reacted in various ways to the sketches of a stick-ish, concrete tower protruding above the city.

Today, opinion on the tower seems to have settled: it's an icon of Auckland, says Hubbard. There are even tower groupies: a group of fans who watch the tower's every move, calling in frantically if it changes from red to white without them being warned.

But whether what lies beneath the monolith is a credit to the city is still very much debated. As SkyCity casino turns 10 this week, has Auckland won or lost from the gamble?

"We have done a huge amount more than we ever thought we might achieve," says SkyCity managing director Evan Davies.

"We're central Auckland's largest employer, its largest ratepayer, we are, for better or worse, a huge utility user, we operate Auckland's largest carpark, we are the largest provider of four- and five-star hotel rooms, we operate the principal cinema attractions in the Auckland region, we operate one of the main theatres, we operate New Zealand's most visited paid attraction."

Davies has been with the casino since its conception in 1992 when Brierleys first applied for consent. There wasn't much public consultation - the then government had decided it was morally okay, and it was, essentially, a done deal.

But Davies says even so, the community did not seem concerned about the potential moral turpitude the development might bring.

"At the time, unemployment was an issue, tourism wasn't stagnant but wasn't growing strongly, development had slowed substantially. That was the focus. I think people were more excited about employment and tourism than they were concerned about the negative impact. The critics weren't just a minority, there weren't any."

Hubbard doesn't like the drab ambience of the gaming warehouse: he'd zhoosh it up a bit like the Christchurch casino. And certainly, anyone with high expectations from a Martin Scorcese-rich film diet will be disappointed: oh-so-mafioso syndicates turn out to be a dozen track-suited Asian students paid $10 an hour to work the pokies.

But economically, the approach seems to be working. The original planning application promised jobs for 1900 people. As of this month, the casino has over-delivered on its promise by 63 jobs - and that's not including part-timers and contract workers or any of the other arms of the complex.

Smoking ban

Since the casino opened, it has returned $670 million in dividends to shareholders. Profits have been hurt this year by the smoking ban, but are still healthy.

All five New Zealand casinos contribute about $1 billion annually to GDP - the equivalent of holding two America's Cups each year - and they provide $500 million in wages and salaries each year.

More than eight million visitors have walked through the Auckland casino's super-sized doors, 15 per cent of them overseas tourists. It has also given $18.6 million to community organisations and trusts.

Former policeman Junior Toleafoa has worked for SkyCity since the tower opened in 1997. Nine years later and he's scaled the heights of management for the SkyCity giant, about to move to a position that will see him work in human resources across all SkyCity's casinos.

"I never dreamt I'd be working in a casino. I didn't think I'd stay for as long as I have. The most important thing for me was the opportunities you get here."

The casino also promised a lot to Maori. Former cultural consultant and trust board member Pita Sharples says he thinks it's done well. He saw 700 people find jobs at the casino through a related training programme he ran and is very proud there were 1000 Maori working on the construction site at one point.

"My experience with SkyCity is that they have been proactive in pushing the rehabilitation side of things and the problem gambling side of things. Whether it evens out, who knows?"

A lot of charities and community groups win, too: Starship, Kidzfirst, the Breast Cancer Foundation and the Special Olympics all receive donations from SkyCity, as do countless other organisations through the independently controlled casino-funded community trust.

South Auckland Health Foundation executive director Pam Tregonning says the amount they receive, and the list of what SkyCity has done for the community, is significant. From mobile dental health units to beds for parents to stay in hospital with their sick children, SkyCity was there from the start.

Tregonning says the board did have heavy discussions about the moral implications of taking money from an operation linked with serious public health problems.

"There are serious issues about whether we take money from gambling. But on the other hand, they're legal, it's government-endorsed and they are required by law to give money back. At least this way it goes back to the community - and to an extent some of the community that spent the money.

"We'd be a hell of a lot worse off if they didn't give any back."

But some say the 1.5 per cent of profit the casino is supposed to put in is too meagre: Hubbard, the guru of socially-responsible business says it's considerable, but he struggles "with the idea of causing a problem and then spending money to fix a problem it caused".

"It'd be rather nice if they didn't have the problem in the first place."

Others point to the Lotteries Commission, which redistributes all profit from its gambling ventures back into the community. It's an analogy Davies gets sick of.

"That's because the community owns the Lotteries Commission. It could have [owned the casino], had the Government gone down a different path. But it didn't pay for it, didn't build it, didn't take the risk, don't have the responsibility."

Social cost

At the end of the day, says Davies, the casino is a business. And like many industries - alcohol, tobacco, the automobile industry - there's a social cost.

Professor Max Abbott, dean of AUT's health and environmental sciences faculty, says it's too soon to quantify the social cost of a casino in New Zealand - it's hard enough to get funding for research into the most basic of issues.

Certainly, though, there's evidence to show that casinos have increased problem gambling.

Statistics suggest problem gambling is the root of up to 30 per cent of crimes. Police report a decline in illegal gambling dens since casinos arrived, although they did surge in popularity with the smoking bans. Gambling syndicates, while not as prevalent, are still around.

Just last week, details emerged of a SkyCity casino security guard who was fired for giving advice to one alleged syndicate boss on how to deal with another.

But broadly, most attempts at cost/benefit analyses done in other countries, including one in Australia in 1999, have shown the social cost of problem gambling to far outweigh the economic benefit, says Abbott.

Of course, not everyone who walks in the casino door comes out with an addiction. Auckland City councillor and Problem Gambling Foundation chairman Richard Northey says for the majority of punters, it's harmless fun. But for the 1-2 per cent of those for whom gambling goes wrong, it goes very wrong, very fast.

He believes the casino can do better in arresting this, but says it is not in its own interests. "About 40 per cent of income and the majority of profit comes from those with a problem," he says.

Davies disputes this. "I do not for a second claim there aren't people who suffer. There are. The bit that offends me is a claim that we do not take our responsibilities in that area seriously.

"Do I have any moral qualms about the role of gambling in the community? Absolutely not. If I did I wouldn't be here."

Staff are trained to spot the signs of a problem gambler - they can tell from their body language and their interactions with other customers.

In the last year, 206 problem gamblers have been banned from SkyCity. Four times that number took the step of banning themselves from the casino over the same period. Their photos go up on the wall by security when they are banned and staff look out for those trying to sneak back in. They have even caught men donning blonde wigs and women's clothes.

Terrible customers

Davies does not see any inherent conflict that casinos are obligated to exclude those that are spending a lot of money there: "They're terrible customers," says Davies.

But critics point to the casino's loyalty programme as evidence the casino wants their big spenders, wherever they get their money from. Members get freebies and gifts the more they spend, and the casino bosses can tell how much and how long they are there.

By the way, semantics are important: customers spend, they don't lose, - and it's entertainment, not gambling. It's okay to talk about winning, though.

"The loyalty programme enables me to know we're not out there exploiting the unemployed and underprivileged in the community. What could possibly be wrong in knowing that?" says Davies.

And Davies says casinos are preferable to less-controlled environments. "It's going to happen, so why not where there's monitoring? People can come in and play poker rather than do it over the internet with no control, no oversight, no one to tap them on the shoulder and care about them if it all goes ugly."

Patrick Jackson, 59, wonders what happened to his tap on the shoulder. He was a regular friend of SkyCity's pokies for about two years. Over one year, he spent 28,000 minutes and millions of dollars on the 5 and 10 cent pokies. Trouble was, a good $750,000-plus of that wasn't his: he had stolen it from his employer, the Refugees as Survivors Trust, and now faces charges of fraud.

Stuff semantics, he says. He feels like a loser. And he is now preparing for prison.

If the casino can use the loyalty programme information to ensure it's not exploiting someone, Jackson says surely it could have stepped in when it's clear a member is gambling far beyond their means, as he says it must have been with him.

And though clearly a problem gambler, he certainly didn't feel like a terrible customer. Very quickly, he was elevated to platinum status and received gifts and invitations to openings. He was taken to the rugby and brought free drinks.

And it was not until the day after his situation was made public in this newspaper that two young men from the casino turned up on his front porch with sympathetic smiles and paperwork for Jackson to ban himself from going back.

Surprisingly, Jackson is ambivalent about whether the casino is a bastard or a blessing. At the end of the day, Jackson says it was his choice to put another coin in the slot. And another. And another. Which makes for something him and Davies agree on. "People know that the house has an edge, people are making a conscious decision to go out for a few hours, have some fun, and they know it's going to cost them money," he says.

"Just about everything that is discretionary in life, that you choose to do, if you do it to excess or you do it wrong, is either unhealthy or dangerous." Look at shopping, he says. And swimming: "Going to the beach is quite fun but some people drown."

Nationally, problem gambling has dropped in the past year while already-heavy regulations are put into effect. AUT's Max Abbott does not wish the casino away despite his familiarity with gambling's evils.

"I no longer seem to notice horns growing out of industry executives' heads. I see stumps now and then. But they were reasonably enlightened from the outset and they have become more aware and concerned."

Like Renaissance cathedral spires and industrial revolution smoke stacks, the tower, he says, is representative of the era we live in.

"We live in a society of risk and credit. The protestant work ethic has been replaced by an entirely different ethos and gambling's central to that. It's a beacon, and an emblem of the historical epoch we live in."

- HERALD ON SUNDAY