Inside Asian Gaming

February 2014 | INSIDE ASIAN GAMING 21 are several major hotels on the drawing board it’s not known how many will actually get built. The country’s existing casino market consists of a handful of small tourist-only clubs in hotels, most located in and around the capital of Colombo. At the government’s urging the parliament in 2010 passed legislation—the Casinos Business (Regulation) Act—that recognized the clubs; however, it did not license them; and no regulatory framework exists. Police actually shut down two clubs last year. There certainly exists an appetite for gambling, though just how large is difficult to quantify. KPMG in a recent study estimated that US$60 billion was wagered in the Indian subcontinent in 2010, most of it through various black markets, and it’s with an eye on India that James Packer’s Crown Resorts is seeking approval for a casino as part of a US$350 million, 400-room resort the company wants to build in Colombo in concert with local partner Ravi Wijeratne, owner of Rank Entertainment Holdings, the biggest operator in the existing casino market. John Keells Holdings, the country’s largest public company, is planning an 800-room resort in the capital priced at $650 million. Both projects will feature an array of dining, shopping, entertainment and leisure attractions and significant conference and meeting space. Things have not proceeded smoothly, however. Both the oppositionUnitedNational Partyand thecountry’spowerful Buddhist clergy have problems with Mr Rajapaksa’s pro-casino stance. As a result, generous tax breaks for the Crown and John Keells projects have gone by the boards, and the government has emphasized that casinos will open only to foreign passport holders and will be restricted to special tourism zones. Legislation passed in December approving Crown’s plan made no mention of a casino and implied no permission to operate one. The company says it is hopeful of getting that approval, possibly by transferring one of two casino licenses held by Rank. International problems have added to the government’s political problems at home. There have been threats of sanctions over possible war crimes in the conflict against the Tamils, and India and Canada boycotted a Commonwealth heads of government summit held in Colombo late last year over the issue. India is a country whose gaming demand Sri Lanka is hoping to draw on. The summit was not all bad news for Sri Lanka. At a concurrent Commonwealth Business Forum, the country was able to ink agreements with Chinaworth billions of dollars in investment to improve the island’s infrastructure, including a port city near Colombo and hotel developments to add to the transport and energy infrastructure projects already undertaken by Chinese companies. The deals underscored both Sri Lanka’s dependence on foreign expertise and investment and its importance to China as a counterbalance to India’s influence in South Asia and the Indian Ocean. COVER STORY Crown Resorts is seeking approval for a casino as part of a US$350 million, 400-room resort the company wants to build in Colombo in concert with Rank Entertainment Holdings, the biggest operator in the existing market. John Keells Holdings, the country’s largest public company, is planning an 800-room resort in the capital priced at $650 million. Both projects will feature an array of leisure attractions and significant convention and meeting space. President Rajapaksa’s pro-casino stance has encountered considerable political and religious opposition. Crown Resorts has been approved for a $350 million hotel in Colombo, though without a casino.