By Robb M. Stewart
MELBOURNE, Australia--A new frontier is opening up in the battle
for Asian gamblers: Sri Lanka. This time the bet isn't only on
China's rich, but another band of high-rollers from neighboring
India.
One of Australia's richest entrepreneurs, James Packer, Friday
said he plans a US$400 million five-star resort and casino in Sri
Lanka's capital Colombo.
The move comes amid increasing Chinese and Indian investment in
the island nation, as it emerges from a long civil war. Gambling
remains a taboo in Indian society, legal in only two Indian states:
Goa and the northeastern state of Sikkim.
Mr. Packer said the resort would help drive tourism to the
country, especially from nearby India and China. Mr. Packer's Crown
Ltd. (CWN.AU) has been scouting for new locations and upgrading its
existing casinos to attract increasingly wealthy gamblers from
China.
Crown owns casinos in Melbourne and Perth, in Australia, and it
has stakes in gambling operations in the U.S. and Macau. Earlier
this year, Australian lawmakers backed Mr. Packer's plan to spend
1.5 billion Australian dollars (US$1.45 billion) building a second
casino and hotel complex in Australia's largest city, Sydney.
Mr. Packer said Friday his company was in detailed discussions
with the Sri Lankan government and potential joint venture partners
regarding Crown Sri Lanka, a proposed resort with 450 rooms as well
as restaurants, retail stores, conference facilities and gaming
facilities.
"Sri Lanka is a beautiful and unique country with huge tourism
potential," Mr. Packer said in a regulatory filing.
Tourism has made a comeback in Sri Lanka since the end of the
civil war. Around 1 million tourists are expected to visit this
year, more than double the number of arrivals in 2008, according to
government data.
That has already lured investment from a number of companies.
Hong Kong-based Shangri-La International Hotel Management Ltd. is
moving into Sri Lanka with a hotel in Colombo set to open in 2017
and a 360-room resort and spa on the coast due to open in 2015.
Starwood Hotels & Resorts Worldwide Inc. and Switzerland's
Movenpick Hotels & Resorts both plan to open hotels in the city
next year.
A report this year by travel technology firm Amadeus and
consultancy Frost & Sullivan said that India is the "emerging
giant" of the Asian-Pacific travel market as its middle class
grows. It calculated that Indians traveling to the Asian-Pacific
region alone spent US$3 billion in 2011, a figure expected to grow
to US$91 billion by 2030 to make the country the second largest
spender on overseas travel after China.
India has stringent gambling laws, with only Goa permitting
casinos. Sikkim has allowed gambling when monitored by the state
since 2005. Major cities including Mumbai, Delhi, and Bangalore are
only a short flight from Sri Lanka.
Sri Lanka's parliament and Board of Investment currently are
considering whether to grant investment approval for Crown's
project. The Melbourne-based company said the project was subject
to a final agreement between the potential venture parties. It
didn't disclose the names of the prospective partners it was in
talks with.
The hotel development would employ around 2,500 Sri Lankans, Mr.
Packer said.
Write to Robb M. Stewart at robb.stewart@wsj.com
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