An audacious project by the Australian casino group Crown, which will see a new NZ$455 million five-star hotel and casino complex resort built on the banks of Beira Lake in Colombo, has now been approved by the Sri Lankan government.
The project, which is expected to be operational by 2015 and lead to the creation of an estimated 2,500 local jobs, has been designed to cash in on the growing wealth of the Indian and Chinese middle class, who are the biggest spenders on travel in Asia. The resort will include a 450-room hotel, restaurants, retail precinct and conference facilities, as well as the high roller casino.
Sri Lanka has boomed as a tourist destination since the end of the decades-long civil war, and the government, which lifted a ban on gambling on the island in 2010, is keen to exploit its prime central location, particularly as it is only a short flight from major Indian cities such as New Delhi and Mumbai. Famed for its beaches and wildlife, Sri Lanka currently attracts around 1 million visitors a year, but it is hoped that the influx of rich Indian and Chinese gamblers will see this increase to around 2.5 million annually by 2016.
The project, however, has attracted criticism within Sri Lanka because of the generous tax concessions being offered to Crown Group, headed by billionaire James Packer. In its first ten years of operation, the hotel and resort part of the business will be exempt from income tax, with reduced rates of taxation then available for a further 12 years after this. The tax holiday will not apply to earnings from the casino side of the operation. There are, however, also a host of other generous exemptions on the table for the group, making this potentially one of the most lucrative deals ever offered to an international casino operator. Other Asian casino hotspots, such as Macau, Singapore, Malaysia and the Philippines, do not offer corporations such generous concessions.
Crown Group has rapidly developed into something approaching an international gambling empire since it has shifted its focus more into casinos and away from the media holdings which have traditionally been the company’s focus of operations. It is also planning a similar casino resort development in Manila, and has recently won permission to build a new NZD$1.7 billion casino in Sydney.
James Packer said, in a statement to the Australian Stock Exchange, “I have great confidence in the country’s future and believe as a destination that it is Sri Lanka’s time to shine in Asia. A Crown integrated resort would help redefine luxury tourism in Sri Lanka and play a significant role in helping to drive increased international in-bound tourism especially from India and China.”
To get a better idea of what this will include, have a look at this promotional video: