Melco Resorts & Entertainment will build a casino and integrated resort (IR) in the center of the Sri Lankan capital, Colombo, the company said on Tuesday, coinciding with its first-quarter earnings report.
The City of Dreams Sri Lanka (pictured with an artist's rendering) will be a billion-dollar initiative in partnership with John Keells Holdings Plc, which has been described as the largest publicly traded conglomerate on the Colombo Stock Exchange.
The initial investment in the casino portion of the project is expected to be approximately $125 million.
"For us, $125 million is a small bet for potentially big opportunities," Lawrence Hoyau Lung, chairman and CEO of Melco Resorts, said of the venture in Sri Lanka
"Sri Lanka could be comfortable between $200 million and $250 million a year on an operating rate basis, with casino development phase one in terms of GGR [total gaming revenue]," Jeff Davis, chief financial officer at Melco Resorts, said on the call
The complex will feature an 800-room hotel and casino, as well as facilities for conferences, incentives, conferences and exhibitions (MICE).
Melco Group's fully owned local unit has received a 20-year casino license from the Sri Lankan government, according to a press release on Tuesday.
Melco "will have and operate City of Dream Sri Lanka's gaming area, and Melco will manage the top five floors of the hotel with its Nuwa brand of ultra-luxury luxury rooms representing 113 of City of Dream Sri Lanka's total 800 hotel rooms," the statement said.
"Melco and John Kills have agreed to all major commercial agreements and expect to launch soon in the casino area," the release said.
Ho was quoted as saying, "We are excited to work with John Kelce to be part of this groundbreaking development in Sri Lanka.
"We believe Sri Lanka has tremendous potential and this opportunity complements our existing real estate portfolio."
"It's a capital light investment with an attractive earnings profile that can expand our City of Dreams brand and expand our customer reach," the chairman said of Sri Lanka's opportunities during its first-quarter earnings release.
Non-gaming facilities in the complex, including 687 Cinnamon Life Hotel rooms to be managed by John Hills, are "in the completion phase and are expected to begin operations in the third quarter of 2024," according to an earlier announcement, while casino operations are expected to begin "in the middle of 2025 ″.
"It is possible to further expand our gaming facilities based on performance and market conditions," the release added.
"Sri Lanka can go to India, Macau can go to China," Ho suggested during the casino group's first-quarter earnings call.
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