Sri Lanka has long attracted tourists with its stunning beaches, wildlife adventures, and historic Buddhist landmarks. Now, the nation’s first Marxist president is turning to casinos to draw in affluent gamblers from India and China, aiming to spark a new influx of foreign investment.
The casino initiative is pivotal for President Anura Kumara Dissanayake, who marks his first year in office next month, pledging to uplift the lives of ordinary citizens after the severe economic downturn of 2022 and 2023.
While Sri Lanka previously had only a few small casinos, this month, Dissanayake unveiled the $1.2 billion City of Dreams casino complex in Colombo. This joint venture with John Keells Holdings and Macau’s Melco Resorts Entertainment marks South Asia’s first integrated resort, highlighted by Bollywood star Hrithik Roshan performing to a thrilled audience.
Dissanayake has also enacted legislation to regulate gambling, including casinos, underscoring the industry’s significance.
The goal is to boost tourist numbers by 50% to 3 million this year, potentially increasing tourism revenue to $5 billion from $3.7 billion last year, according to Deputy Tourism Minister Ruwan Ranasinghe.
“Tourism is crucial for us to overcome our economic challenges,” he said.
“In the near term, we’re focusing on increasing tourist numbers, but our long-term strategy is to target high-quality, sustainable, and luxury tourism, with casinos being a key component.”
Tourism contributed about 4% to GDP last year, with hopes to raise it to 10%, supported by upscale gaming, he explained. Tourism ranks as the third-largest source of foreign income after remittances and apparel exports.
This month, the central bank projected a full-year economic growth of approximately 4.5%, buoyed by strong tourism figures, significantly above the World Bank’s April forecast of 3.5%.
Sri Lanka’s $99 billion economy began recovering last year following two years of significant contractions, which led to a $2.9 billion IMF bailout.
Sri Lanka needs to resume debt payments by 2028 after defaulting in 2022.
‘VERY EXCITING’
The City of Dreams, situated on Colombo’s coastline, offers 800 rooms, a high-end mall, and conference spaces, which investors believe will lure wealthy tourists.
“This is a completely new market. It’s similar to how we’ve developed other markets like Manila, Macau, and Cyprus,” said Melco Chairman and CEO Lawrence Ho.
“We’re just beginning to tap into the tourism and integrated resort gaming potential of this country.” Minister Ranasinghe anticipates that Indians will be the primary visitors over the next decade. India, the world’s most populous nation, allows casinos only in select areas, while China limits legal casino operations to Macau. Indians comprised nearly a quarter of Sri Lanka’s 2 million tourists last year, with Chinese tourists making up 7%. Sri Lanka maintains strong economic relations with both New Delhi and Beijing, and citizens of both countries enjoy visa-free entry.
To enhance revenue and promote responsible gambling, Sri Lanka’s parliament recently approved the establishment of a Gambling Regulatory Authority.
However, the legislation has faced criticism for granting excessive power to the finance minister, excluding state lotteries from regulation, lacking tourism industry representation, and imposing low penalties for infractions.
The government argues that the legislation is essential to mitigate social harm and boost employment while promoting the industry.
“Gambling has existed in Sri Lanka and Colombo, but not prominently,” Ranasinghe said. “With the City of Dreams attracting clientele from around the globe, I’m confident they’ll visit Sri Lanka.”
