Inside Asian Gaming

inside asian gaming December 2014 10 China Giveth and China Taketh Away China’s political end game can make or break casino developments across Asia. Plans for casino resorts on Taiwan’s offshore islands located tantalizingly close to the Chinese mainland—Kinmen, for example, is a mere five kilometers from the mainland at the closest point—never made it past the drawing board because of fears Beijing would ban its citizens from visiting them. Meanwhile, Chinese visitors are buoying revenues at casinos from South Korea and Vietnam to North Korea and Las Vegas. Though Chinese players make up around 40% of revenue at Sri Lanka’s existing modest-sized casinos (with Indians contributing roughly another 40%), if growth in Chinese tourist arrivals continues ramping up at current rates, and once the glitzy new casino resorts around Beira Lake open up to cater to Macau-style VIP players, it’s conceivable the Chinese could constitute the vast majority of business. Still, Dhammika Perera knows the market better than anyone, and he contends the share between Chinese and Indian players will probably remain equal. That’s either a purely data-based prediction, or he may even intend to pursue active measures to maintain an equal balance between Chinese and Indian clientele, keeping his revenue sources diversified. It’s wise not to put all your eggs in one basket, especially when politics are at play. Even Macau—technically part of China and cognizant the central government values its prosperity—has learned the hard way that Beijing can have political imperatives that take precedence over its economy, with China’s ongoing anti-corruption drive having taken a big bite out of Macau’s VIP business. The drop would have been less pronounced if Macau’s casinos drew players from a broader range of countries. the Rajapaksa government got legislation passed to formally recognize the industry by registering the casinos with the Inland Revenue Department for tax purposes. Mr Perera owns three of the four gaming establishments thus officially sanctioned. Mr Wijeratne owns the other. All are located in Colombo, and the biggest, Mr Perera’s Bally’s, has 80 table games (his Bellagio has 40 and his MGM Colombo another 40). Though small in size compared to the super-resorts of Macau and Las Vegas, all are pleasantly decorated and well-maintained and offer service on a par with international standards. room Crown Colombo spearheaded by Australian gaming tycoon James Packer and his local casino partner, Ravi Wijeratne. Plans for the lake area also include an $850 million resort with a casino by the country’s largest publicly traded company, John Keells Holdings, dubbed Waterfront. The handful of small casinos currently catering to the Colombo tourist trade operated for years as “recreation clubs,” though, as Mr Perera points out, these complied with rules in force since the British colonial era that permitted such clubs to legally operate gaming. After the end of the civil war, Crown Colombo , spearheaded by James Packer in partnership with local casino operator Ravi Wijeratne , will be located across Beira Lake from Dhammika Perera’s Queensbury. Cover Story