SkyCity faces scrutiny over online casino legality in Malta
A funded class action lawsuit has been filed against SkyCity Entertainment Group over the legality of its Malta-based online gaming operation.
Issuing a statement to investors, SkyCity revealed it had received proceedings against the company, SkyCity Auckland Holdings Limited and a third party based in Malta called Silvereye Entertainment Limited.
The lawsuit seeks to ‘test the lawfulness of the online gaming operations operated by Silvereye on behalf of an overseas subsidiary of SkyCity (SkyCity Online)’, according to the statement by SkyCity.
The funded class action is seeking to reclaim gambling funds lost to SkyCity Online between February 2020 and February 2026. The operator said in its statement: “SkyCity denies any such liability and will actively defend the proceedings.”
An outdated Gambling Act previously led to the surge of the grey market in New Zealand, with players able to access online casino operators based offshore, but not those based domestically. Sky City seemingly saw an opportunity to tap into this and maximise its potential revenue through its subsidy in Malta.
Licensed by the Malta Gaming Authority, SkyCity Online is a New Zealand online casino operated by Silvereye, a subsidiary of Gaming Innovation Group (GiG). The online casino is operated on behalf of SkyCity Malta Limited, a subsidiary of SkyCity.
Graeme Stephens, the company’s Chief Executive Officer at the time of the launch in 2019, stated: “Online casinos are widely used by New Zealand customers and this trend will only continue. The world is rapidly moving online and our industry is no exception, so we have to ensure we remain relevant to changing consumer trends and preferences.”
iGaming Expert has reached out to GiG for comment on the proceedings.
Grappling with the grey market
The problem of the grey market has since been acknowledged by the government as it has moved to introduce a regulatory framework for online casinos.
As it passed its second reading, the key incentive of the New Zealand Online Casino Bill was undeniably clear as laid out by Paul James, Secretary of Internal Affairs and Chief Executive of the Department of Internal Affairs, Te Tari Taiwhenua.
Speaking during a keynote address at the Regulating the Game conference in Sydney, James underpinned that the bill aims to transition online casinos from grey to clear.
As reported by Inside Asian Gaming, he outlined that online casino is already very embedded in the everyday lives of New Zealanders, but in many cases, they operate without safeguards.
He added that the ambition is not to introduce online casino gambling, but instead to take it above board. Key to this is adding a regulatory framework and ensuring that safety standards are met.
James continued: “We’re really trying to strike a balance here between measures that effectively detect and prevent and minimise harm, while also ensuring the settings are not so restrictive that the gambling operators can operate effectively, and that New Zealanders feel confident in making those choices in participating with our non-extended gamblers.
“Getting the balance wrong will mean that people will opt into the black money and New Zealanders will gamble without any support or protection.”
SkyCity has an interest
Up to 15 online casino gambling licences will be up for auction in New Zealand as part of the three-stage licensing process. The market is scheduled to launch later this year on 1 December.
SkyCity is one of two operators that we know of who are interested in a licence, with CEO Jason Walbridge recently stating: “Gaming is evolving in exciting ways, bringing together the best of in‑person and digital experiences.
“While we aim to lead this change, our priority is ensuring our customers and communities are protected. Any move into a regulated online market would be built on strong consumer safeguards and SkyCity’s enduring commitment to responsible gambling, so the experience remains safe and enjoyable for everyone.”
The other operator is Entain Australia & New Zealand, with Group CEO Stella David noting during the group’s recent earnings presentation that the operator would be going for three licences in the market.
Article 56A
SkyCity’s case also has the potential to escalate the debate around Malta having a legal shield when it comes to gambling licensing in overseas markets.
This is set to take centre stage as Austria and Malta elevate their legal battle over player protections and the impact of licensing in Malta.
Malta is rallying against the judgment of European courts over the reclaiming of player losses, citing Article 56A of the Maltese Gaming Act to protect its own domestic law.
Christian Rapani, Founder of Rapani Rechtsanwälte GmbH, recently discussed discourse around Malta and European nations, as well as the latest developments in the ruling.
He told iGaming Expert: “This confrontation has introduced momentum,” he reflected. “Sometimes legal disputes that escalate create the necessary pressure for political discussion. It may be uncomfortable in the short term, but it forces stakeholders to confront structural inconsistencies that have existed for many years.”
“You have a highly regulated industry operating in a borderless digital environment.
“But unlike banking or insurance, gambling law is not harmonised at the EU level. That creates friction. National sovereignty remains strong, but digital services do not respect borders. Reconciling those two realities is the long-term challenge.”
