Crown Plans $400 Million Casino Resort in Sri Lanka
A new frontier is opening up in the battle for Asian gamblers: Sri Lanka. This time the bet isn't only on China's rich, but another band of high-rollers from neighboring India.
One of Australia's richest entrepreneurs, James Packer, Friday said he plans a US$400 million five-star resort and casino in Sri Lanka's capital Colombo.
The move comes amid increasing Chinese and Indian investment in the island nation, as it emerges from a long civil war. Gambling remains a taboo in Indian society, legal in only two Indian states: Goa and the northeastern state of Sikkim.
Mr. Packer said the resort would help drive tourism to the country, especially from nearby India and China. Mr. Packer's Crown Ltd. (CWN.AU) has been scouting for new locations and upgrading its existing casinos to attract increasingly wealthy gamblers from China.
Crown owns casinos in Melbourne and Perth, in Australia, and it has stakes in gambling operations in the U.S. and Macau. Earlier this year, Australian lawmakers backed Mr. Packer's plan to spend 1.5 billion Australian dollars (US$1.45 billion) building a second casino and hotel complex in Australia's largest city, Sydney.
Mr. Packer said Friday his company was in detailed discussions with the Sri Lankan government and potential joint venture partners regarding Crown Sri Lanka, a proposed resort with 450 rooms as well as restaurants, retail stores, conference facilities and gaming facilities.
"Sri Lanka is a beautiful and unique country with huge tourism potential," Mr. Packer said in a regulatory filing.
Tourism has made a comeback in Sri Lanka since the end of the civil war. Around 1 million tourists are expected to visit this year, more than double the number of arrivals in 2008, according to government data.
That has already lured investment from a number of companies. Hong Kong-based Shangri-La International Hotel Management Ltd. is moving into Sri Lanka with a hotel in Colombo set to open in 2017 and a 360-room resort and spa on the coast due to open in 2015. Starwood Hotels & Resorts Worldwide Inc. and Switzerland's Movenpick Hotels & Resorts both plan to open hotels in the city next year.
A report this year by travel technology firm Amadeus and consultancy Frost & Sullivan said that India is the "emerging giant" of the Asian-Pacific travel market as its middle class grows. It calculated that Indians traveling to the Asian-Pacific region alone spent US$3 billion in 2011, a figure expected to grow to US$91 billion by 2030 to make the country the second largest spender on overseas travel after China.
India has stringent gambling laws, with only Goa permitting casinos. Sikkim has allowed gambling when monitored by the state since 2005. Major cities including Mumbai, Delhi, and Bangalore are only a short flight from Sri Lanka.
Sri Lanka's parliament and Board of Investment currently are considering whether to grant investment approval for Crown's project. The Melbourne-based company said the project was subject to a final agreement between the potential venture parties. It didn't disclose the names of the prospective partners it was in talks with.
The hotel development would employ around 2,500 Sri Lankans, Mr. Packer said.
Source: Wall Street Journal, 18 October 2013
