Sri Lanka bets on high-end casinos to boost economy

Sri Lanka bets on high-end casinos to boost economy

COLOMBO - Multi-million-dollar casinos planned for Colombo have boosted Sri Lanka's ambitious hopes of becoming Asia's new gambling hotspot, but the projects still face political and religious opposition.

Sri Lanka legalised gambling in November 2010, with the aim of eventually luring cashed-up tourists to the island nation and boosting an economy battered by decades of ethnic war.

The government granted approval to Sri Lanka's John Keells group last week, for a US$850-million (S$1,066 million)  "mixed development", a euphemism for an entertainment hub that includes gambling.

The green light was also given last month to the local partner of Australian billionaire and gaming tycoon James Packer, for a similar deal to build a $350 million lakeside resort in the heart of Colombo. Both investments have been given a generous 10-year tax holiday.

"Big names coming to Sri Lanka for mixed developments is a huge boost to the (tourism) industry," said Chandra Mohotti, chairman of the state-run Sri Lanka Institute of Tourism and Hotel Management.

John Keells, the island's biggest diversified group with interests in hotels, has not announced details but industry officials say it will include a casino with a yet-to-be named foreign partner.

Packer's Crown Group and John Keells are betting on Sri Lanka's post-war economic growth and rising tourist numbers. Government officials have stressed that both projects, expected to start before the end of this year, will create thousands of jobs and attract high rollers.

But the main opposition party has baulked at the projects, not on moral grounds, but because of the generous tax breaks gifted to developers.

"What we are saying is that if the country is to benefit, they must be taxed and regulated," United National Party (UNP) lawmaker Harsha de Silva said. "We will not jump up and down saying we oppose casinos."

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