By: A Special Correspondent
July 14, Colombo (LNW): A luxury casino slated to open within Colombo’s high-profile “City of Dreams” complex has drawn national attention—not just for its glitz and glamour, but also due to a growing political storm over its licensing and taxation.
The upcoming launch has captivated public interest for two major reasons. Firstly, international film icon and Bollywood megastar Shah Rukh Khan aka “King Khan” is expected to grace the opening ceremony, marking his first visit to Sri Lanka in two decades. His presence has sparked significant excitement, with fans and media outlets abuzz in anticipation of the event.
Secondly, and far more critically, the casino’s legitimacy has come under scrutiny following revelations about its licensing and possible preferential tax treatment. Political observers and legal experts have raised concerns about how approval was granted for the establishment—despite a prior ban introduced in 2015.
During his presidency, Maithripala Sirisena moved to halt the development of casinos under certain major investment projects, cancelling previously granted approvals to several companies, including Waterfront Properties, Lake Leisure Holdings, and Queensbury Leisure Limited.
His administration’s decision was formally documented in a cabinet paper that barred the operation of casinos at the “City of Dreams” site.
However, nearly a decade later, the green light appears to have been given once more—this time to a single entity. The questions now being raised are: who reversed the earlier decision, on what grounds, and through what mechanism was this approval reissued?
Whilst it is our strong belief that there should be no fundamental objection to regulated casino operations—especially given their potential to boost tourism and foreign exchange earnings—concerns have emerged over alleged irregularities surrounding taxation. According to multiple sources, the casino linked to this project may have received substantial tax concessions in contravention of Sri Lanka’s existing legal framework.
Under current laws, enterprises involved in gambling, alcohol, and tobacco are subject to high taxation, with corporate income tax for such sectors standing at 45 per cent. These industries are also ineligible for investment-related tax incentives. Yet, speculation is rife that the casino operator, which is backed by Hong Kong-based Melco Resorts & Entertainment Ltd., may have been granted a questionable exemption from this tax burden.
If these reports are accurate, it would raise serious questions about regulatory oversight, transparency, and the possible misuse of discretion in granting concessions outside legal provisions. Political sources suggest that legal action is being considered by various stakeholders to challenge the move and demand accountability.
Further developments are expected in the coming weeks…
