IAG’s jet-setting CEO Andrew W Scott recently visited City of Dreams Sri Lanka – the newest property in the Melco Resorts & Entertainment portfolio – to discover where it fits into Southeast Asia’s luxury gaming offering.
I recently had the pleasure of visiting City of Dreams Sri Lanka – the newest offering in Melco Resorts & Entertainment’s expanding portfolio of properties around the world.
IAG readers would be very familiar with Melco’s three Macau properties – City of Dreams and Studio City in Cotai, along with Altira in Taipa – as well as City of Dreams at Manila’s Entertainment City, which has now enjoyed more than a decade in the market.
Less well-known are the two more recent additions from Melco: City of Dreams Mediterranean in Cyprus, which opened in July 2023, and City of Dreams Sri Lanka, which opened in August last year.
Sri Lankan casinos
Sri Lanka is no stranger to casinos. In fact, Sri Lanka – a small island off the southeast tip of India with roughly the same land area as Tasmania – has had casino gaming for decades, albeit with a patchwork of malleable regulatory and legal frameworks. There are four other casino properties in the capital city of Colombo – all of which I visited during my stay: Bellagio, Bally’s, Marina and Majestic Pride, the latter located within the iconic Colombo Lotus Tower.
While I have seen much worse gaming properties in my travels around Asia than that quartet, there’s no doubt that the City of Dreams property takes the industry to a whole new level in Sri Lanka, bringing a true integrated resort feel in keeping with the established City of Dreams brand we’re familiar with in Macau, Manila and the Mediterranean.
Getting there
Colombo’s Bandaranaike International Airport is exactly what you would expect of a South Asian nation of around 23 million people. A single-runway airport handling a mix of wide-body and narrow-body planes, it is fed mostly from Indian, South Asian and Southeast Asian cities, as well as a surprising amount of traffic from the UAE. There are also a handful of cities in Europe and Australia that have limited nonstop services.
Once you clear the airport, it’s a relatively simple 45-minute drive south along the west coast of Sri Lanka before finding yourself at the City of Dreams property in the heart of Colombo.
The City of Dreams Sri Lanka offering
The first thing you’ll notice on arriving is the beautiful location right on the water’s edge. The property makes liberal use of floor-to-ceiling glass on three sides – all capturing stunning water views. Wherever you look you seem to be looking at water, rooftop pools and outdoor bars – there are Instagrammable moments everywhere the eye roams.
Equally striking is the sheer luxury of the surroundings. It would be easy to assume that Melco would let a property in Sri Lanka play second fiddle to its offerings in more established tourist destinations like Macau, but this isn’t the case. Yes, it is smaller, but as you walk around the property, the surroundings still evoke that five-star IR feeling of soaking in luxury. For example, there are impressive artworks all over the walls – mostly by young Sri Lankan artists.
My Nüwa hotel room was comparable to those you might find in Macau, Manila, Singapore or Las Vegas. The bed was extremely comfortable, the bathroom well-appointed and the room as a whole spacious and airy, with great views. The property’s F&B offerings are equally good. I had the pleasure of dining with the property’s senior leadership team at Indiya restaurant, the signature Indian cuisine offering. The food was superb. I’m told there are a total of 17 F&B outlets at the property, and I visited quite a few, including Gatz, a two-storey-high champagne and cocktail bar that feels as though it is floating amongst the clouds. There’s the French-style Bistro des Marées, Cantonese food at Sapphire Dragon, Yoroko for high-end Japanese cuisine, Staten Bar & Grill if you fancy a steakhouse, and many more, too numerous to list individually.
The property also features a luxury retail promenade with a mix of designer brands and artisanal Sri Lankan boutiques, as well as expansive event and MICE facilities. During my visit there was a major poker event underway making good use of one of the ballrooms. Indian players love their poker, and this is a good market for Melco to explore.
The casino itself comprises 250 slots and 119 table games, mostly roulette, baccarat and blackjack with some well-known regional card games like Andar Bahar and Teen Patti. The very bright red and orange décor seems to be a staple of Sri Lankan gaming floors!
My key takeaway of the City of Dreams Sri Lanka offering? That I was pleasantly surprised by the level of luxury and service, which was significantly better than I was expecting.
Keells deals
Melco was able to set up City of Dreams Sri Lanka at relatively low cost, due to an asset-light strategy involving John Keells Holdings, often described as Sri Lanka’s largest conglomerate. John Keells has a 150-year history in Sri Lanka and today has interests in a wide range of industries, including hotels and resorts. Its Cinnamon Hotels & Resorts subsidiary has 13 hotels and resorts in Sri Lanka, and four in the Maldives, the largest being the Cinnamon Life Integrated Resort with 800 rooms – a US$1.2 billion investment which took a decade to build and which finally opened to the public last year.
In April 2024, John Keells and Melco announced quite a creative deal. Melco agreed to invest US$125 million, giving birth to a gaming space at the resort while taking over the top five floors of Cinnamon Life – which was renamed City of Dreams as part of the deal. Melco installed its famous Nüwa hotel brand on those floors, comprising 113 rooms (including 19 VIP suites), and leaving 687 rooms in the floors below for what became the Cinnamon Life hotel at City of Dreams.
The market
With a population of only around 23 million and a GDP per capita of around US$5,000 a year, locals alone can’t keep an ultra-luxury property like City of Dreams Sri Lanka afloat. But, as pointed out by Melco Chairman and CEO Lawrence Ho at the opening of the property, the saving grace is the behemoth just across the Gulf of Mannar and the Palk Straight – India. Sri Lanka has the opportunity to “be to India what Macau is to China,” Ho observed.
He’s right. Most of the southern half of the sub-continent is within a one- to two-hour flight, and even Mumbai on India’s west coast – the country’s richest city said to be home to nearly 50,000 millionaires and 100 billionaires – is only two-and-a-half-hours away by air. Indians can enter Sri Lanka for tourism for up to 30 days effectively visa-free; they need only apply for a Sri Lankan eTA online. That eTA costs nothing and is almost always granted by email immediately.
Industry changes
It’s a time of change for the Sri Lankan casino industry. One of the major challenges facing operators in Sri Lanka is the increase in the entrance levy for casino visitors from the start of this year. The levy has doubled from US$50 to US$100, which has clearly put a strain on all casino operators in Sri Lanka, particularly with regards to local play.
Another major industry change is the formal establishment of a dedicated gaming regulator, the Gambling Regulatory Authority (GRA). Sri Lanka has set a target date of 30 June 2026 for the GRA to be in place. One of the main reasons for establishing the new regulator is the absence of any system to collect tax revenues from online operators (government officials say around two-thirds of casino users in Sri Lanka now play online), but another benefit will be increased regulatory oversight for the gaming industry in Sri Lanka, bringing it in line with other formally regulated jurisdictions across the Asia-Pacific region.
Sri Lanka is soon to be reviewed by the Financial Action Task Force (FATF) on anti-money laundering and counter-terrorism financing compliance, so establishing the GRA will go a long way towards satisfying FATF expectations.
How will it all play out?
There’s no doubt the City of Dreams Sri Lanka property has enormous potential for Melco. Having the most populous nation on earth on its doorstep is the real opportunity. Southern Indian cities like Chennai and Bangalore are barely an hour’s flight away. Wealthy Mumbai, and even Delhi in the north, are respectively less than three and four hours away by air. This makes all the major population centers of India viable feeder markets for weekend stays in Sri Lanka. Affluent Indians will enjoy great bang for their rupee – more likely lakhs and crores of said rupees – in Sri Lanka.
Lawrence Ho’s observation – that as Macau is to China, Sri Lanka can be to India – is insightful. There is no meaningful large-scale casino gaming in India. Legal casino gaming is restricted to just three places: Goa, Sikkim and Daman, none of which have anything like the luxurious offering of City of Dreams Sri Lanka, and all of which are relatively tiny in scale. The government of India is becoming increasingly anti-gambling, thus heightening the Sri Lanka opportunity. And in regard to genuine world-class luxury in an integrated resort, Melco has an absolute monopoly across South Asia.
Having said that, City of Dreams Sri Lanka needs time to ramp. It opened barely six months ago and must carefully build a loyal clientele and bed down its service offering. Can the team at City of Dreams Sri Lanka convert on the opportunity they have? Only time will tell.
