COLOMBO — Sri Lanka has been a popular destination for tourists attracted by its beautiful beaches, wildlife safaris, and ancient Buddhist sites. Now, under the leadership of its first Marxist president, the country is banking on casinos to draw high-rollers from India and China, aiming to boost foreign investments.
The success of this casino-centric strategy is pivotal for President Anura Kumara Dissanayake, who marks one year in office soon and is determined to uplift the lives of everyday Sri Lankans post the economic downturn of 2022 and 2023.
While Sri Lanka previously had a few small casinos, Dissanayake recently inaugurated the US$1.2 billion (S$1.54 billion) City of Dreams casino complex in Colombo, a collaboration between John Keells Holdings and Macau-based Melco Resorts & Entertainment.
The grand opening of South Asia's premier integrated resort featured Bollywood star Hrithik Roshan dancing to popular Hindi tunes in front of a captivated audience.
Dissanayake has also successfully pushed for legislation in parliament to regulate gambling activities, including those in casinos, underscoring the significance he places on this sector.
This move is part of Sri Lanka's ambition to increase tourist arrivals by 50% to three million this year, potentially raising industry revenues to US$5 billion from last year's US$3.7 billion, as per Ruwan Ranasinghe, the deputy tourism minister.
"Tourism plays a very significant role for us to get out of these economic issues that we have," he stated. "So these couple of years we are working more on short-term targets and getting traffic, but in the long run, our plan is to go for quality, more sustainable, and high-end tourism and casinos and gambling will be a segment of that."
Tourism contributed around four percent to the GDP last year, with hopes from the government to see it reach 10%, supported in part by upscale gaming, according to Ranasinghe. Tourism ranks as the third largest foreign currency earner after remittances and apparel exports.
The central bank forecasts an annual economic growth of approximately 4.5%, buoyed by robust tourism figures, a significant increase from the World Bank's earlier projection of 3.5%.
The US$99 billion economy only saw a return to growth last year after two years of substantial contractions that led to seeking a US$2.9 billion bailout from the IMF.
Sri Lanka is set to resume repayments to creditors from 2028 after a default on its foreign debt in 2022.
'Very exciting'
The City of Dreams, situated on Colombo's shoreline, boasts 800 rooms, a luxury mall, and conference facilities expected to draw affluent visitors, as per investors.
"It is a total greenfield market. It is similar to how we developed other markets in the past — in Manila, Macau and also in Cyprus," said Melco Chairman and CEO Lawrence Ho to Reuters.
"I think we are barely scratching the surface in terms of the tourism potential and also the integrated resort gaming potential of this country."
Minister Ranasinghe anticipates Indians to be the primary visitors for the next decade. India, the world's most populous country, permits casinos only in specific locations, while China confines legal casino operations to Macau.
Indians made up nearly a quarter of the two million tourist arrivals in Sri Lanka last year, with Chinese visitors accounting for seven percent. Sri Lanka maintains strong economic ties with both New Delhi and Beijing, offering citizens of both countries visa-free entry.
To bolster revenue collection and promote responsible gambling, Sri Lanka's parliament recently passed legislation to establish a Gambling Regulatory Authority.
The legislation has faced criticism for giving broad powers to the finance minister, excluding state-run lotteries from oversight, lacking tourism industry representation in the authority, and imposing minimal penalties for violations.
The government defends the legislation as essential to mitigate social harm, boost employment, and promote the industry.
"There has been gambling in Sri Lanka and in Colombo but not that significant," stated Ranasinghe. "With the arrival of City of Dreams — clientele from all over the world, I'm sure they will also come to Sri Lanka."