On Monday, SkyCity announced to the New Zealand stock exchange the Department of Internal Affairs (DIA) had made an application to the Gambling Commission to suspend operations.

The DIA action follows an investigation into SkyCity’s “harm minimisation practices” after a gambler in its Auckland casino complained.

“The (DIA) secretary believes SkyCity has breached important harm-minimisation obligations including conditions of its licence and conditions of its Host Responsibility Programme relating to instances of long-play by its customers,” executive John Sneyd said.

“DIA takes gambling harm minimisation seriously and will take firm action when licensed operators do not abide by the conditions of their licences.”

The complaint came from a former SkyCity Auckland customer who gambled between 2017-2021.

SkyCity’s notice says the DIA alleges it did not comply with requirements “relating to detection of incidences of continuous play by the customer”.

SkyCity operates casinos in Auckland, Hamilton and Queenstown.

The application caused the NZX share price to plummet 10 per cent from $2.34 to $2.09 in the opening two hours of trading.

A decision from the Gambling Commission is unlikely “for a number of months”, according to SkyCity’s notice, with the casino operator to also make an application to the regulator.

SkyCity says any suspension would not affect its hotels and restaurants.

“SkyCity is committed to maintaining the highest standards of host responsibility best practice, with priority given to minimising the impacts associated with problem gambling as an area of primary focus,” the market update says.

It comes as Skycity Adelaide faces a federal money-laundering probe. The Australian Transaction Reports and Analysis Centre (AUSTRAC) launched legal action against SkyCity Adelaide in December after a probe found “serious and systemic non-compliance”.

“(The) investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence,” AUSTRAC deputy chief executive Peter Soros said.

“SkyCity also failed to develop and maintain a compliant (anti-money laundering and counter-terrorism financing) program, leaving it at risk of criminal exploitation.”

SkyCity Adelaide has seen the value of it North Terrace casino slashed and the company has put $45m aside for potential penalties from the inquiry.

The allegations against SkyCity Adelaide include claims that the North Terrace casino made $74 million from “high-risk” customers who had reported links to organised crime and that some gamblers used “cash that appeared to have been buried”.

In addition to the AUSTRAC proceedings, SkyCity is also under scrutiny from a separate inquiry by former Supreme Court judge Brian Martin which is probing whether the company is fit to hold the South Australian casino licence.

That inquiry was put on hold in February due to the Federal Court proceedings.

-with AAP