Genting weighs a bet on Sri Lanka
Genting Group could be joining Crown Resorts in Sri Lanka. The government of the island nation is adamant about not issuing new casino licenses, but the Malaysian resort giant is reported to be exploring the path Crown has taken into the market by partnering with a local operator.
Reuters identifies the prospective partner as Dhammika Perera, an entrepreneur who operates a number of the country’s existing small-scale tourist casinos and who—along with Crown and Sri Lanka-based hospitality giant John Keells Holdings—is one of three approved developers of destination resorts the government is hoping will boost tourism revenues and attract more foreign investment.
Mr Perera’s plans call for a US$300 million hotel with a casino for which he is looking to lure a major US or Asian-facing gaming brand. Crown Chairman James Packer has proposed a $350 million gaming resort in the capital of Colombo in partnership with local casino magnate Ravi Wijeratne. John Keells is planning a competing resort in the capital priced at $650 million, and is also believed to be seeking a partner with global operating credentials.
Reports estimate the current market at around nine small foreigners-only casinos, only four of which are licensed and registered for tax purposes with the Department of Inland Revenue.
“Gaming licences are not something that come by easily, so Genting is always on the lookout for any openings,” a source told the Singapore Star’s StarBizWeek. “It is also about positioning. Sri Lanka is not exactly a gaming haven, but it is a gateway to the untapped Indian market where gambling is highly regulated.”
Genting declined to comment, the Star said, but the company’s Coveted Colombo Genting weighs a bet on Sri Lanka interest in Sri Lanka is reported to date back to 2010 when the parliament passed a government-backed bill to formally recognize the industry. The idea was put on hold, however, amid growing political and religious opposition to casinos.
The company has since pursued an aggressive strategy of global expansion, opening one of the largest gaming resorts in the world in Singapore and the largest machine gaming venue in the United States in the New York City borough of Queens. The company purchased land on the Las Vegas Strip last year on which it plans to develop a $4 billion megaresort, and an intense lobbying effort is under way to extend its American reach into the Miami market, where it has partnered with a local racetrack that holds a slots license.
Genting’s partnership at Resorts World Manila, the Philippines’ most successful casino, is in the midst of an expansion aimed at doubling its room and gaming capacity. South Korea is in its sights as well via a joint-venture resort on the tourist island of Jeju. Its listed Singapore subsidiary is also vying for a license in Japan, which is expected to legalize casinos this year.
“After being side-lined in Macau, Genting’s strategy is to look well ahead of the curve and work towards a vision of having a footprint in every major international gateway,” CIMB Research said in a recent report.
The firm speculates that a US listing could be in the cards for the company, pooling the assets of New York City, Las Vegas and the Miami venture.
“Although Macau continues to take center stage with US$45 billion in gross gaming revenue in 2013,” CIMB noted, “the US remains the biggest gaming market in the world at US$70 billion a year.”