Editorial: Convention centre issues still difficult

The government and Sky City are close to making a deal regarding the convention centre. Photo / Getty

This is a very good deal ... but not if it produces an increase in problem gambling or suggests law ... is for sale.If the alarm from critics is any indication, the Government must be very close to reaching a deal with the Sky City casino to provide a national convention centre in Auckland. If so, it is about time.

Nearly nine months have passed since the Sky City proposal was chosen ahead of rival bids, mainly because it required no financial contribution from taxpayers. But in return Sky City was asking for an extension of its licence and the right to put more gambling tables and machines in the casino.

Negotiations since then appear to have been difficult, or perhaps the Government did not want a deal to be done before the election. Last month, the new Economic Development Minister, Steven Joyce, said the pace had been stepped up at the beginning of this year and he believed only "on the balance of probabilities" the project would go ahead.

Clearly, the issues are not as straightforward as they seem to both supporters and opponents of the casino proposal. Supporters say the taxpayer is being offered a $350 million convention centre for nothing. Opponents say an increase in gambling facilities would carry a social cost and that law should not be a matter of negotiation with commercial interests.

Both sides, as usual, are right. This is a very good deal for the taxpayer but not if it produces an increase in problem gambling or suggests that law in this country is for sale. Mr Joyce and his officials will need to have safeguards in any deal and they will need to show that they have considered the future of casinos in New Zealand.

Sky City has opened up that big question by making its convention centre conditional on an extension of its licence beyond 2021. It holds one of the first casino licences in New Zealand, issued in 1996 for 25 years. Gambling of this nature was legalised in an era of liberal economic reform which included reductions in the legal drinking age and saw "pokie" machines proliferate in pubs.

Since then, the political climate has cooled. Legislation imposed a moratorium on further casino licences soon after Sky City opened and the prohibition was extended in statutes of 2000 and 2003. The Government may have to amend the Gambling Act 2003 to permit the additional gambling capacity Sky City now seeks.

This is a step that should be considered as part of a proper public review of gambling control policy, not as a deal done with a casino. The most the Government should offer is to undertake a review sooner rather than later. Sky City has invested heavily in Auckland and it deserves an early indication of licensing policy beyond 2021.

It certainly cannot be expected to add a 3500-seat convention centre to its business without an assurance of its future. If the economics of the centre depend on an increase in gaming tables and machines, a proper review could weigh up the benefits and costs.

All of this spells delay but this project is proceeding at a snail's pace anyway. The need for the convention centre has been agreed for 10 years. It was not until 2010 that the Economic Development Ministry began to compare five different Auckland proposals and it took another year to select the Sky City bid. If a further year is needed to resolve the issues the casino has raised, so be it.

Meantime, Auckland and New Zealand waits for a venue that could attract a lucrative traffic. To get the venue at no public expense would be worth the wait. The benefit is not just the saving in subsidy, a private investor is likely to design a more economic facility and work harder to make it pay.

If these drawn-out negotiations have led Sky City to revise its demands on public policy, so much the better. Gambling control cannot be for sale.