KEY POINTS:
New Zealand's casinos have been told they will have to pay the Government for a crackdown on their own operations.
The Department of Internal Affairs takes $4.6 million a year in fees from the six casinos but wants to take more to solve the problems they have with organised crime.
The department says its ability to deal with money laundering and loan sharks has been limited by a lack of resources and casinos like Auckland's SkyCity - which pays $2.2 million a year - will likely have to pay more.
How much the casinos pay is being decided in the current "review of fees" by the Government.
The fee increase was revealed in a report released this week where Internal Affairs and police admitted that casinos had a problem with organised crime, such as loan sharks and money laundering.
It was the first time they have done so publicly since casinos opened 13 years ago.
The report said the ability of Internal Affairs to deal with crime in casinos was also limited by its functions and lack of powers.
It said the review of fees would address the resource crunch, although a spokesman would not detail just how much more casinos would be charged.
The fee charged to a casino goes directly to regulating it and SkyCity said yesterday that it covered the "full cost" of regulation.
The report revealed that Internal Affairs and police have been secretly investigating casinos for 10 months in an operation codenamed "Project Metos" aimed at gathering evidence of crime in the sector.
It found Asian crime syndicates, ethnic gangs like Black Power, motorcycle gangs and "international crime entities" were all frequenting casinos for networking and money-laundering.
Casinos are also to be targeted in a crackdown on terror-financing.
Minister of Internal Affairs Rick Barker has said he will implement all of the report's recommendations, which include giving inspectors more powers to investigate money-laundering.
Mr Barker ordered the report after allegations of money-laundering and loan sharks were made by two former executives of Christchurch Casino, in which SkyCity has a 40 per cent stake.
Its founding chief executive, Evan Davies, left last month after continued criticism from shareholders and commentators over the company's financial bottom line.
The Weekend Herald has learned key staff David Kennedy, the general manager of operations, and Peter Treacy, the regulatory and general manager, who initially fronted the media over loan sharks, have also gone.
An ongoing Weekend Herald investigation into suspicious activities at SkyCity uncovered reports of loan sharks, alleged money-laundering and drug dealing.
It also found that the loss of at least 331 Chinese passports was feared to be linked to loan sharks and identity fraud.
Problem Gambling Foundation chief executive John Stansfield said tougher regulation was welcome, as casinos were not likely to deal with the problem themselves.
Bad Bets
* The Internal Affairs report revealing an illegal gambling set-up also led to 17 drug arrests and the seizure of drugs, weapons and cash.
Several money laundering suspects face drugs charges.
* A loan shark was found with 16 Chinese, New Zealand and Malaysian passports. Source: Internal Affairs.
