Scrapping Of Casinos Not A Hindrance To Investor Confidence

• Says Sri Lanka Tourism Development Authority (SLTDA) Chairman Paddy Withana

By Dinuk Samarasinghe

Withdrawal of approval to casinos including the US$ 400 million Crown Group Resort Project mulled by Australian casino magnate James Packer has not affected investor confidence or tourism sector of the country, veteran hotelier and Sri Lanka Tourism Development Authority (SLTDA) Chairman Paddy Withana told in an interview with the Sunday Leader.

“I do not think this isolated incident has made any negative effects to the industry. If you take Saudi Arabia for example, they do not have even nightclubs let alone casinos, but still they are attracting tourists,” he said.

“I do not think that scrapping of this isolated casino project would impact investor confidence. If this was not the case, large scale investments such as setting up seven-star hotels in Colombo by Shangri-La or even Hyatt Regency or ITC Colombo One Hotel and Residences for that matter would not have materialized. Therefore, I do not believe this will be an issue in garnering investors or attracting tourists into the country at all. This fact is already proven with the increasing number of Chinese and Indian tourist arrivals.”

Following the ousting of President Mahinda Rajapaksa in January this year,  James Packer’s Crown Group announced that it will not go ahead with a proposed plan to develop a US$ 400 million luxury hotel and casino in Sri Lanka, following a decision by the government in Colombo to scrap tax concessions for the project.

The new administration under President Maithripala Sirisena decided to cancel generous tax concessions for three foreign resort developments – including Packer’s resort – and said it would not issue any licenses in the future to run casinos. The new Prime Minister Ranil Wickremesinghe charged that the previous government had offered the concessions in an effort to turn the Sri Lankan capital into a regional gaming hub.

The move led to the downsizing of John Keells Holding’s US$ 650 million Water Front Resort project which included luxury hotel, convention centre, entertainment and gaming facilities, international standard shopping mall, luxury condominiums, serviced apartments and office spaces.

In October 2013, two proposed gazette notifications which were drafted to award wide tax concessions to casino hotel projects including Packer’s Crown Resort Project faced heavy criticism not only from the opposition but also the alliance government’s coalition partners – Champika Ranawaka’s Jathika Hala Urumaya (JHU) and Wimal Weerawansa’s National Freedom Front (NFF).

However, Withana was adamant that this posed no threat to Sri Lanka’s burgeoning tourism industry.

“There are destinations where casinos are heavily marketed to attract tourists, but I do not see a necessity of promoting casinos to attract tourists in Sri Lanka where there are enough and more attractions instead of casinos.”

“We are looking at 2.5 million tourist arrivals by 2016. Keeping this target in view, the current 26,700 rooms should be increased up to about 50,000 rooms by 2016. We have to wait till the elections to take place after which, hopefully, we will be able to carry out our plans,” Withana added.