Key defends Sky City deal

Prime Minister John Key is defending a deal with Sky City (NZX: SKC) in which the company will foot the $350 million bill for a new international convention centre in exchange for the government considering gambling laws changes.

Mr Key yesterday announced plans for the Auckland-based, 3500-seat New Zealand International Convention Centre, saying the project would provide an estimated $90m boost to the economy, create 1000 jobs during its construction, and 800 jobs once complete.

Skycity will pay the full construction costs but has asked the government to consider alterations to gambling regulations and legislation.

An extension to Skycity's current licence, which wraps up in 2021, and an increase in the number of gaming tables and machines at the Auckland casino were among the changes being looked at.

Opposition parties have criticised the deal, saying the government is putting New Zealand laws up for sale, and that the social harms of increasing gambling outweighed the economic benefits of the centre.

Responding to the criticism today, Mr Key disagreed the deal set a bad precedent, saying the proposed law changes were logical.

"Skycity's licence expires in 2021, this facility wouldn't be finished until 2015...so you can't expect their shareholders to invest for six years without certainty of their investment," Mr Key said this morning.

With regard to an increase in gaming machines, Mr Key said the idea was targeted at the international market, and that without them it was unlikely the convention centre alone could support a $350m investment.

"We think Auckland needs a convention centre  but the government and the ratepayers don't want to put in money," he said.

"We want to be in a regime where we can make sure that there's good business activity where we grow Auckland and the country, and in this particular case we do want Skycity to invest $350m."

Mr Key said the critics were the same people who would turn around and complain about there not being enough jobs and Auckland not being an international city.

"You can't have everything. We change laws to try to make sure we deliver what we want and that is a more vibrant economy and creation of jobs."

The Government had ruled out additional casino licences, an internet gambling licence, or changes to the age of entry for casinos.

Skycity chief executive Nigel Morrison said the company was looking to expand its existing casino and entertainment complex to accommodate future demand, which would be driven by the convention centre's development and Auckland's growth.

"Skycity is simply seeking -- and government is prepared to consider -- changes to the gaming regulations to extend the term of our operating licence and to increase the scale and efficiency of our casino facilities in Auckland."

Skycity was entirely comfortable with the areas the government has ruled out from negotiations, Mr Morrison said.