Melco to launch $1 billion integrated resort and casino ‘City of Dreams’ in Sri Lanka

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Melco Resorts & Entertainment Ltd has announced an integrated resort with a casino in Colombo, the capital city of Sri Lanka.

Asia Gaming Brief, reported on this project under development, named ‘City of Dreams’ Sri Lanka. The resort is valued at US$1 billion and is set to be a joint venture with John Keells Holdings Plc, described as the largest listed conglomerate on the Colombo Stock Exchange. The primary investment in the casino part of the project is expected to be approximately US$125 million.

Under a 20-year license, Melco Resorts will operate the casino within the ‘City of Dreams’ Sri Lanka, aiming to redefine the region’s luxury hospitality, entertainment, and leisure. The project involves rebranding the former ‘Cinnamon Life Integrated Resort’ into City of Dreams Sri Lanka, making it the first integrated resort in Sri Lanka and South Asia.

The resort will have 800 hotel rooms, retail outlets, food and beverage establishments, MICE (meetings, incentives, conferences, and exhibitions) facilities, and other amenities. Melco Resorts will manage the hotel’s top five floors under its ‘Nuwa’ brand, comprising 113 rooms out of 800, reported GGR Asia.

Lawrence Ho Yau Lung, Chairman and Chief Executive of Melco Resorts, expressed enthusiasm about the venture, stating, “For us, US$125 million is a small bet, for a potentially huge opportunity.” He further added, “City of Dreams Sri Lanka is expected to serve as a catalyst for stimulating tourism demand and promoting economic growth in Sri Lanka, drawing inspiration from the successful examples set by similar integrated resorts in other jurisdictions”. Lawrence Ho said he foresees Sri Lanka becoming to India what Macau is to China, as quoted in IAG news.

Geoff Davis, Chief Financial Officer of Melco Resorts, provided insights into the revenue prospects, projecting an annual gross gaming revenue (GGR) ranging from US$200 million to US$250 million, primarily targeting the Indian market. He highlighted the strategic positioning of Sri Lanka as a gaming jurisdiction adjacent to India, tapping into its vast population base and growing economy.

The project is expected to begin casino operations by mid-2025, with the overall integrated resort expected to be operational in the third quarter of 2024. Melco Resorts aims to address feeder markets in India and the broader region, with a significant focus on international clientele.

Melco’s CEO Lawrence Ho mentioned his excitement about partnering with John Keells. He said, “We are, along with John Keells, raising the bar significantly to a world-class standard with this integrated resort and the casino that we’re fitting out. And while I think it’s a little too early to provide specific returns, we’re anticipating returns that are very attractive, very shareholder friendly, that will drive shareholder value and probably returns that would be difficult to attain in most mature markets.”

The collaboration with John Keells Holdings shows Melco’s commitment to tapping into the immense potential of the Sri Lankan gaming market. The company anticipates appealing returns and shareholder-friendly outcomes.