Commercial Property Editor
James Packer’s plan to enter the Sri Lankan resort market appears to have hit a stumbling block with reports that the Sri Lankan government has refused to allow casinos at three super-luxury resorts planned in the capital because opponents said they would lead to prostitution.
It was not immediately known whether the casino ban would endanger the development of the three mega-resorts in Colombo, which have attracted investment valued at $US1.3 billion ($A1.4 billion) from tycoons including Australian gambling mogul Packer, who runs plush casinos in Melbourne, Perth, Macau and London.
Developers, including Mr Packer, wanted casinos to be part of all three luxury resorts but the government rejected the plans, Economic Development Minister Basil Rajapakse said over the weekend.
”We will not allow casinos. That we say very clearly,” Mr Rajapakse told Parliament. ”They (the promoters) asked, we did not allow, nor will we allow (in the future).”
He did not give a reason for the move but opposition figures have been vocal in raising fears that the casinos could lead to prostitution, which is illegal in Sri Lanka.
A spokesperson told Fairfax Media on Sunday that ”Crown will not be commenting”.
Mr Packer has earmarked Asia as a growth area and has said in the past Sri Lanka’s ambitious tourism targets were ”only achievable with the right tourism infrastructure and attractions” and cited the success of Singapore in turning around its performance as a tourism destination with the development of two casino resorts.
Crown confirmed the resort had received cabinet approval earlier this year but denied reports it would automatically be able to transplant the casino licence of its local partner into the project.
”Crown is still in discussions
with the government on the gaming side of the project,” a spokesman said in January.
At Sydney’s Barangaroo site, now under construction, the Crown Sydney Hotel Resort will be operational from November 2019 when gaming under the restricted gaming licence will be permitted.
Fairfax Media revealed last week Crown was poised to bid for a $2 billion hotel and casino on the Las Vegas Strip.
It is planning to lodge an expression of interest for the Cosmopolitan of Las Vegas, a three-year-old casino complex owned by Deutsche Bank and next door to MGM Resorts International’s Bellagio.
Mr Packer’s proposed 450-room Crown Sri Lanka resort, which promises on its website to offer ”world-class gaming facilities”, is one of those affected by the casino ban.
Crown had earlier said it was in ”detailed discussions” with the government and potential joint-venture partners and the deal was subject to ”relevant approvals”.
The other two resorts are a $US650 million development from local conglomerate John Keells Holdings and a $US300 million project by local businessman Dhammika Perera.
The government gave approval for all three projects to go ahead, without the casinos, and also granted 10-year tax breaks – despite opposition. The opposition UNP and some of President Mahinda Rajapakse’s own coalition partners who broke ranks voted against the tax concessions but the government has a comfortable majority in the 225-member legislature and the legislation was passed.
The palm-fringed island nation legalised casinos in December 2010 but the legislation has never been implemented. Sri Lankan officials have said they hope high-end casinos could boost tourist arrivals to 2.5 million annually by 2016 from 1.27 million last year.