Sri Lanka, Asia's Next Casino Hotspot? - Forbes

17th March 2013, www.forbes.com

Sri Lanka has become one of Asia’s most promising economies in recent times, yet the potential of it’s gambling sector is only starting to gain recognition amongst international operators looking to expand their presence in Asia.

With marque casinos propping up in Macau, Singapore, and now the Philippines, there is yet to be a similar foray into India, where the relatively untapped gaming market has proven thus far to be impenetrable for foreign casino operators. Seemingly undeterred by India’s stringent gambling laws, Las Vegas Sands’ Chairman and CEO Sheldon Adelson has repeatedly expressed his desire for an Indian expansion, including an enquiry with Delhi’s Ministry of Tourism in 2008 that went unanswered. And it seems LVS isn’t the only one targeting India as both MGM Resorts International and Caesars Entertainment are said to have had preliminary partnership talks with Delta Corp., the owner and operator of several casinos in the southern state of Goa – one of two Indian states where gambling is somewhat legal.

While the big Las Vegas operators struggle to find a way into the Indian market, there may be better prospects elsewhere in the region. Enter Sri Lanka, a vibrant island nation in the Indian Ocean, opportunely situated within 4 hours flight of India’s major cities. The end of a gory civil war in 2009 has since resulted in visible increases in tourist arrivals and foreign investment, giving rise to Sri Lanka as one of Asia’s most promising economies. Yet as Sri Lanka continues to attract FDI across various other sectors, the island’s gaming market is only just starting to garner interest from foreign players as a viable gateway into India and the greater region.

Sri Lanka’s current gaming industry is interesting. Only a few small casino establishments exist in the capital city of Colombo, most of which have been in operation for the best part of 30 years, catering to a select mix of locals and tourists. In 2010, the government designated special legalized gambling zones in an attempt to attract new operators. Tax concessions have also been offered to large-scale hospitality projects seen to bring considerable investment to the country, as was given to Shangri-La’s upcoming hotel developments. With such incentives on offer, Sri Lanka appears to be finally winning the attention of major casino operators, with India’s Delta Corp. leading the way through the acquisition of developmental land on the outskirts of Colombo. Australian casino operator Crown Limited may also soon follow as it is reported that billionaire owner James Packer made a recent trip to the island to meet with government officials and explore prospects for a casino.

For the time being, gambling in Sri Lanka may be seen as a far cry from the glitz and glamour found in the mega-casinos of Macau or Singapore, but the island’s positive outlook towards gaming could be a welcoming sign for the likes of Las Vegas Sands and others seeking further expansion in Asia. With a thirst for foreign investment and a cooperative government, Sri Lanka could have the potential to follow the footsteps of what Macau has become in recent times – a $38 billion per year jackpot.

Update 2/3/13: At the time of writing this story, James Packer’s visit to Sri Lanka was reported by local media in Colombo but not confirmed. However, his visit has since been confirmed by the Sri Lankan Minister of Investment Promotion.

Australian Gaming Tycoon Bets on Sri Lanka. James Packer Scouting Sri Lanka for Potential Investments in His Global Casino Empire

27th February 2013, www.livemint.com

Australian gambling tycoon James Packer may be lining up a bet on Sri Lanka, scouting the Indian Ocean island for potential investments as he seeks to build a global casino empire.


Packer, who owns half of casino operator Crown Ltd, met with Sri Lankan ministers this week to discuss hotel and entertainment investment options, according to officials who met with him.

“They have not finalized the area and the amount they are going to invest. The government has asked them to come up with a proposal,” Lakshman Yapa Abeywardene, Sri Lanka’s minister of investment promotion, told Reuters on Wednesday. “The government proposed (for) them to invest in a large city hotel in Colombo and go to (the eastern city of) Trincomalee to look into possible investment opportunities.”

Treasury secretary P.B. Jayasundera said Packer had expressed an interest in “integrated tourism”, which typically includes hotels, casinos and other entertainment.

A Crown spokesman said the company would not comment about potential investments in Sri Lanka.
Analysts said Packer’s interest in Sri Lanka was unexpected.

“I would have thought their focus would be more with Southeast Asia rather than somewhere like Sri Lanka,” said one Australian-based gaming analyst, who declined to be identified.

However, Sri Lanka offered some potential for an early mover. “It’s probably not a bad move in some ways,” said Akshay Chopra, a portfolio manager at Karara Capital, who visited the country in December. “The Sri Lankan government is making a lot of changes, you’ve got China investing a lot of money in Sri Lanka, building a lot of infrastructure and you’re close to India and a big gaming market there.”

Packer is ranked Australia’s third-richest person with a fortune of $6 billion, according to Forbes. Last year, he cashed out of his family’s publishing and broadcasting assets for about $1 billion to concentrate on his gambling business, which span casinos in Australia, Macau, Britain and the United States.

Packer’s Melco Crown Entertainment Ltd plans to build a $1 billion casino in the Philippines in partnership with Philippines’ wealthiest man, Henry Sy.

Sri Lanka expects its economy to grow at 7 percent or more this year, fuelled by major infrastructure projects, and is targeting about $1.5 billion in foreign direct investment after missing its $2 billion target in 2012.

The country has allowed casino gambling off and on since at least the 1980s and currently has about nine properties including the Bellagio Colombo, operated by India’s Delta Corp. and unrelated to the Bellagio Las Vegas operated by MGM Resorts.

Sri Lanka’s Security Forces to Move out of Colombo to Make Way for Colombo City Development. Hotel, Casino, Apartment Complexes Earmarked

14th November 2010, www.mediawitty.com

Sri Lanka’s Army, Navy and Air Force offices in Colombo are being moved to a massive 48-acre complex at Akuragoda in Pelawatta, Battaramulla, opposite present Army Volunteer Force Headquarters, making way for Colombo city development programme.

The Urban Development Authority (UDA) has started clearing the area to begin the construction work. According to official sources, the Army, Navy and Air Force headquarters and several of its Colombo establishments will be housed in one area at Akuragoda with preliminary plans already drawn up. Several other administrative offices were also being shifted to the Sri Jayawadenapura, Kotte area.

At present around 500 acres of prime land are occupied by the armed forces with the country’s five star city hotels, banks and commercial buildings clustered in the same area. This area will be cleared for the proposed US$ 500-million tourism zone in Colombo's Beira Lake area with a US $100-million hotel-casino complex.

The Shangri-La group based in Hong Kong is to be given the land housing the present Army Headquarters and military sports ground in Colombo to build a US $75 million luxury hotel and apartment complex. The armed forces occupy prime property in Colombo City and this perhaps was a legacy from British regime when Colombo was a garrison city and at the same time was the principal port and administrative centre, the sources said.

President Mahinda Rajapakse placed the UDA under the command of the Defence Ministry as part of the City of Colombo Development Plan to attract investors and tourists. The plan was initially drawn up in 1999 and re-announced in 2008, but shelved because of the opposition of shanty dwellers, who make up nearly half the city’s population. The government has already launched the Colombo city development programme aimed at making Colombo an International Business Centre and Financial Hub integrated with Tourism and Accommodation Facilities. Measures have been taken by the UDA to clear shanties where 66,000 families live in Colombo’s prime lands in an extent of 450 acres and use such land for other purposes.

Related Info:
Sri Lanka Legalizes Casinos in Exclusive Zones. Genting Casino, FEE Group & other Internatioanl Chains to Set up Operations

Shangri-La Hotel in Colombo Sri Lanka Military Sports Ground

Sri Lanka Aitken Spence Colombo City Hotel on state-run Ceynor Foundation Property

Delta Corp Plans Casinos in Sri Lanka to Tap Surge in Tourist Arrivals

Sri Lanka Legalizes Casinos in Exclusive Zones. Genting Casino, FEE Group & other Internatioanl Chains to Set up Operations

14th November 2010, www.thebottomline.lk

With the parliament’s nod to legalise casinos, a few ‘casino zones’ are to be set up to lure high end tourism to the country - among them the key zone going to be along the D R Wijewardena Mawatha - Beire Lake area, The Bottom Line reliably learns.

Apart from that, the authorities are believed to be planning several other exclusive casino zones, including the Jaffna peninsula, which is now becoming a major tourist destination in the country.

As the country is gradually coming out of its conservative shackles, mooting this type of legislature, several foreign casino chains have expressed their interest in coming to Sri Lanka to operate casinos.

According to sources, Two Singaporean parties and Malaysia’s Genting Casino Group are already in touch with the Sri Lanka authorities in setting up their operations in the newly demarcated casino zones.

Sources also said the US-based FEE Group which entered Sri Lanka in 2009 with a partnership with Ceylon Continental Hotel is to re-commence their operations following the new gaming regulations.

The FEE Groups official website www.feegroupplc.com reports a news item saying ‘Fee Casino in Colombo, Sri Lanka opens’.

Foreign media recently reported quoting Indian billionaire Rakesh Jhunjhunwala that his firm Delta is planning to arrive in Sri Lanka to operate casino resorts in the next six months.

Apart from the foreign firms, speculation is rife that several local gaming operators are also looking at reaping the benefits from the new legislation by expanding their casino empires.

Although Casinos were not legally permitted in Sri Lanka before the new regulation, there were a number of casinos operating within the city limits of Colombo using regulatory loop holes.

According to sources, a young business tycoon is already operating a casino at the designated area for casinos along the D R Wijewardena Mawatha, allegedly without necessary approval.

However, dispelling further speculation that this tycoon is planning to expand using the regulatory opening, sources said that he is currently not in a position to set up new casinos due to quite complex reasons.

Even though there has emerged a school of thought against the new gaming laws, the country’s policy makers are of the view that if Sri Lanka is to attract high end tourism, a vibrant entertainment industry targeting tourists is a must.

Singapore, after approving casinos in its soil after much debate, is currently reaping benefits of it as its new positioning as a tourist destination has created high end tourist attraction to the country.

Related Info:
Delta Corp Plans Casinos in Sri Lanka to Tap Surge in Tourist Arrivals

Delta Corp Plans Casinos in Sri Lanka to Tap Surge in Tourist Arrivals

04th October 2010, www.bloomberg.com

Billionaire Rakesh Jhunjhunwala- backed Delta Corp. plans to open casinos in Sri Lanka in the next six months to tap a surge in tourist arrivals to the island nation after the end of a 26-year civil war.

Casino operator-Delta, which also develops property and runs an aircraft charter service, will spend 10 billion rupees ($225 million) in the next three years in opening casinos in the region as well as at home in Sikkim, Daman, and Goa, Chief Financial Officer Hardik Dhebar said in an interview in Mumbai. Gambling is not allowed in most Indian states.

Delta wants to benefit from a revival in Sri Lanka’s tourist arrivals, which surged 47 percent in the first eight months of the year, according to the nation’s tourism agency. Shares of companies including John Keells Holdings Plc and Aitken Spence & Co. have more than doubled as tourist incomes boosts earnings at their hotels and resorts.

“We have not even scratched the surface yet” for casino opportunities in the region, Dhebar said. “Sri Lanka is in a hurry to start speed up the process of development and is taking steps to ensure investment flows into the country.”

Delta shares, which have risen 84 percent this year, rose 2 percent to a record 83.8 rupees in Mumbai at 11:08 a.m.

Faster economic growth in India and Sri Lanka is helping boost salaries in the region increasing demand for leisure spending, Dhebar said.

India’s economy grew 8.8 percent in the quarter ended June 30, the fastest pace in two-and-a-half years. Sri Lanka’s $42 billion economy may grow as much as 8 percent in 2010, the central bank said on Sept. 21. The nation’s troops defeated the separatist Liberation Tigers of Tamil Eelam in May last year, ending their 26-year quest for a separate homeland helping attract tourists and investors to the nation.

Billionaire Jhunjhunwala and investor Radhakrishna Damani bought an 11 percent stake in the company last month. Jhunjhunwala, with $1.15 billion in assets is India’s 57th richest man, according to Forbes magazine.

To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.