The island nation is home to a dozen smaller-scale gaming halls. In August, the casino at its first integrated resort, City of Dreams Sri Lanka, opened in the capital of Colombo. The $1.2 billion complex is a joint project of Melco Resorts & Entertainment and John Keells Holdings. Lawmakers are currently formulating the country’s inaugural Gaming & Regulatory Authority.

Casinos as part of economic recovery

According to the Sri Lanka Financial Times, the new levies will help top off government coffers drained during the 2022 economic collapse.

That year, the rate of inflation reached 50%, and Sri Lanka sought a $600 million bailout from the World Bank. In 2023, the International Monetary Fund (IMF) stepped in with an additional loan of $3 billion. The subsequent austerity campaign led to “one of the largest fiscal adjustments in its history – equal to nearly 8% of GDP over three years,” reported the World Bank’s Public Finance Review.

“Sri Lanka has largely stabilised its economy,” observed World Bank Division Director David Sislen. “The challenge now is to get better results from every rupee collected and spent. This means modernising tax administration, focusing on direct taxes and making sure public spending is both efficient and fair.”

Looking for Singapore-style tourism boost

Casinos are part of Sri Lanka’s broader strategy to restore international tourism and invite more foreign investment. In new interviews with Sri Lanka Business Today, John Keells chairman and CEO Krishan Balendra and Melco chairman and CEO Lawrence Ho said City of Dreams could transform the Sri Lanka tourism sector.

“The big opportunity for Sri Lanka is really outbound tourism from India,” said Balendra. “It’s the biggest market into Sri Lanka right now, about 20% of all arrivals.” He also expects the property to draw patrons from across South Asia, Southeast Asia and the Middle East. “A project like this will really help drive that tourism growth.”

City of Dreams “is the first and only integrated resort in South Asia”, added Ho. “Singapore has Marina Bay Sands. Macau has a lot of integrated resorts. But within this region, being as close to India and [its] 1.4 billion people, it just simply doesn’t exist.”

In the past, Balendra has said City of Dreams could have the same positive impact on Colombo as Marina Bay Sands and Resorts World Sentosa had in Singapore. The 2010 openings of those IRs “resulted in an immediate surge in tourist arrivals”, he noted.

Ho has projected that City of Dreams will generate GGR of $250 million per year at maturity. “We expect to make a significant and positive impact on the local community and economy,” he said.

Sri Lanka President Anura Kumara Dissanayake has set a goal of increasing global tourism by 50%, in part by luring Indian and Chinese high rollers. With tourism representing 4% of GDP, according to Yahoo Finance, “a surge in visits from gamblers could be just the token”.