By: Staff Writer
August 04, Colombo (LNW): Sri Lanka’s newly opened City of Dreams integrated resort, a $1.2 billion mega-development by John Keells Holdings (JKH) in partnership with global gaming giant Melco Resorts and Entertainment, is positioning itself as a game-changer in the island’s tourism industry. However, the project’s launch comes at a time when the country’s casino industry is facing mounting challenges, including a tough tax regime and increasing scrutiny over alleged money laundering by some operators.
Conceived in the early 2010s as Sri Lanka emerged from decades of conflict, the integrated resort was designed to help reposition Colombo as a premier high-end tourism hub in South Asia. “We recognized the need to attract outbound tourists, especially from our giant neighbor India, and also from the Middle East and Southeast Asia,” JKH Chairman Krishan Balendra said during the opening. The proximity to large regional markets, along with a post-conflict vision of economic revival through tourism, drove the concept forward.
The resort features a combination of luxury offerings, including the Cinnamon Grand Hotel, Melco’s Nuwa Hotel, a casino, high-end apartments, a shopping complex, and expansive conference and banqueting facilities. Inspired by regional success stories like Marina Bay Sands in Singapore, the project aims to generate a wide array of revenue streams, from hospitality and retail to gaming and real estate.
Melco Resorts Chairman Lawrence Ho, who operates similar integrated gaming destinations in Macau, Manila, and Cyprus, believes Sri Lanka holds unique potential as a destination. “Sri Lanka isn’t just a city with casinos. It’s a full-fledged tourism destination. Unlike Macau, which is more urban-centric, Sri Lanka offers beaches, culture, and experiences. You can spend one or two weeks here easily,” he noted.
According to Ho, the island is strategically located as a gateway to fast-growing feeder markets such as India, China, Russia, and the Gulf states. He compared Sri Lanka’s potential to become the “Macau of South Asia,” particularly due to rapid economic growth in India’s upper-middle-class segment.
Despite the optimism surrounding the City of Dreams, the broader casino industry in Sri Lanka is navigating turbulent waters. The government has imposed significantly higher taxes on gaming operators, with casinos now subject to steep licensing fees, annual levies, and a turnover-based tax. In addition, some casino operators in Colombo have faced allegations of financial irregularities and potential money laundering, drawing heightened attention from regulators and raising concerns over compliance and transparency.
Nevertheless, JKH remains confident. The company expects to generate long-term income from fixed and variable payments from the casino, in addition to hotel revenues, commercial rentals, and apartment sales. Early signs are promising, with bookings picking up and expectations for a strong winter tourist season ahead, Balendra said.
As Sri Lanka seeks to rebuild its tourism economy post-crisis, the success or failure of this integrated resort could define the future direction of the island’s tightly regulated and closely watched gaming sector.
