Casino fights suspension of licence

The Government's first attempt to suspend a casino's licence for failing to deal with an apparent gambling addict hit a potential obstacle yesterday when the Dunedin Casino argued that it could not be penalised for what it did before July 2004.

Christchurch Queen's Counsel Tom Weston, representing the casino, told the first hearing of the new Gambling Commission in Auckland that the Gambling Act which took effect from July 1, 2004, should not be retrospective.

But Internal Affairs Department lawyer Mark Woolford told commissioners the casino's licence, dating from 1999, was unchanged by the new law.

"Parliament cannot have intended the abolition of the Casino Control Authority to give an amnesty to licence-holders in respect of any breaches of licence conditions prior to July 1, 2004," he said.

The department has asked the new commission to suspend the casino's licence for up to six months because it allowed a Dunedin woman, Christine Marie Keenan, to spend almost $5 million on its premises between May 2002 and August 2004.

Her gambling stopped only when she was arrested, and later jailed for three years, for stealing $470,000 from two employers to fuel her habit. The rest of the money came from selling her house, a marriage settlement and inheritances from her parents.

Mr Woolford told the commission that both the casino manager, Rod Woolley, and a director of its board, Stuart McLauchlan, had concerns about Ms Keenan's gambling well before she was arrested.

He said Mr McLauchlan spoke to her employer, accountant and biotechnology entrepreneur Trevor Scott, about the amount of time she was spending in the casino as early as September 2003. He told Internal Affairs investigators that he was "concerned she may be helping herself to money from that business".

"I believe the amount lost in the casino was about $150,000 at that stage," Mr Woolford said.

But no action was taken to stop her going on to gamble away the rest of the $5 million.

The new Gambling Act requires casinos to adopt procedures to identify and exclude problem gamblers.

The previous Casino Control Act 1990 did not have a similar clause. But in practice the Casino Control Authority gradually imposed such provisions through casino licences, and the Dunedin licence included them from the beginning.

Mr Weston said the casino complied with its licence by having a problem gambling programme, but he said there was nothing in the licence or in the 1990 act which required it to enforce that programme.

Mr Woolford argued that clause 12 of the licence required that the casino's "operating procedures shall comply with the programme".

But Mr Weston said: "That is not the allegation. It is that we didn't take all reasonable steps to identify the problem gambler and act accordingly. I submit that we have complied with clause 12 - we have the programme, and that should be the end of the matter."

The boutique Dunedin Casino in the grand Southern Cross Hotel is part-owned by Sky City through a 40 per cent stake in Christchurch Casinos Ltd, which it bought in April 2004 from the British group Aspinall's. Mr Weston argued that its current management, Dunedin Casinos Management Ltd, could not be held responsible for the previous management by Aspinall's.

But Mr Woolford said Mr Woolley and all other senior managers remained in place after the takeover so the ownership change did not affect their knowledge of Ms Keenan's problems.

Mr Weston also objected to the commission's requirement that evidence from witnesses should be submitted in advance in written affidavits.

Former National MP Graeme Reeves, who is chairing the commission for this case, said the commission would rule by April 24 on the legal issues raised. If the case proceeds to a full hearing, this is expected to start on or about July 31.