By: Staff Writer
February 05, Colombo (LNW): Sri Lanka is making a major push into the casino industry with the upcoming City of Dreams in Colombo, set to be operated by Melco Resorts & Entertainment.
The highly anticipated gaming and entertainment hub is expected to commence operations in the third quarter of 2025, according to its local partner, John Keells Holdings (JKH).
This project, which marks South Asia’s first integrated resort, aims to capitalize on India’s rising wealth and outbound tourism.
However, financial analysts at Morgan Stanley caution that while Indian tourists show strong interest in travel and leisure, they historically spend less on gambling compared to Chinese tourists, as seen in markets like Singapore.
A Billion-Dollar Investment
The City of Dreams Sri Lanka represents a significant $1.2 billion investment, making it the largest private sector project in the country’s history.
JKH, a veteran in Sri Lanka’s hospitality industry through its Cinnamon brand, has been a key player in the development, ensuring a seamless blend of luxury accommodation and entertainment.
Melco, which secured a 20-year casino license in April 2024, will oversee the 180,000-square-foot casino and the 113-room Nuwa ultra-luxury hotel.
The resort’s commercial spaces have already begun operations, and the full-scale launch—including a shopping mall, entertainment areas, and high-end dining options—is scheduled for mid-2025.
Casino-Driven Revenue & Growth Prospects
Melco’s investment in the project stands at $125 million, which the company considers a “small wager” with strong potential for returns. The casino is projected to generate a gross gaming revenue (GGR) of $200 million to $250 million annually.
Analysts suggest that 50% of the resort’s EBITDA will likely stem from casino operations. However, to meet profitability expectations, GGR must exceed $300 million, ensuring a post-tax cash flow of $30 million for Melco.
Meanwhile, JKH has committed $900 million to the venture, aiming for a 15% return on invested capital (ROIC) and an annual cash flow of $100 million.
Tourism & Employment Impact
Beyond financial gains, the City of Dreams is expected to be a game-changer for Sri Lanka’s tourism industry.
The development will create over 20,000 direct and indirect jobs, bolster foreign exchange earnings, and attract high-net-worth visitors. JKH’s 687-room Cinnamon Life hotel, which opened in October 2024, will further enhance the destination’s appeal.
Melco’s Chairman and CEO, Lawrence Ho, has hinted at the possibility of expanding gaming facilities based on market performance.
As Sri Lanka positions itself as a premier gaming and entertainment hub in South Asia, this project is set to redefine the country’s tourism and leisure sector.
With its grand opening approaching, all eyes are on City of Dreams, as it could be the catalyst for Sri Lanka’s transformation into a top casino tourism destination in the region.
