This week’s final passing of a law to legalise casinos in Sri Lanka looks less about opening up a new market and more about acknowledging a fait accompli and regulating and taxing what is already there.
The Casino Regulatory Bill has been advertised by the government as a move to boost tourism. In reality, casinos are already in existence and tourists minded to visit them are already passing through their doors according to the country’s media. The move may be more a tax raising exercise after 26 years of financially and morally draining civil war between the majority Sinhalese and the minority Tamil community.
“This will enable the government to streamline all casinos, which are now being monitored under various state institutions,” Deputy Finance Minister Sarath Amunugama told parliament members before the bill was passed, according to a report in the Asian Tribune.
The timing of the Bill is interesting, however. The war came to an end in May 2009 and since then Sri Lanka has been rebuilding its economy and soliciting fresh foreign investment.
Local, small-scale operators currently populate the gambling hall and casino market that grew up by default in the years of civil strife. One question is whether the Sri Lankan gaming market can attract and subsequently support large scale international gaming investment of the sort seen in the Philippines at the USD700 million Resorts World Manila. Sri Lanka is certainly attracting investor interest in the mainstream hotel sector. In August this year, Hong Kong-based Shangri-La Hotels said it wanted to build a new hotel property there. The company’s chairman, Kuok Khoon-Ean, flew to Sri Lanka that month for talks with senior government officials. Mr Kuok is the son of Malaysian entrepreneur Robert Kuok, whose name was recently linked briefly (and erroneously) with a buy out of the Philippines’ gaming regulator and operator Pagcor.
Sri Lanka’s government has stated it aims to generate USD2 billion annually in tourism receipts and 2.5 million tourists by 2016. In 2009, the country earned USD350 million from tourism.
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