Melco Resorts & Entertainment recently disclosed its ambitious plan to venture into Sri Lanka’s gaming scene, strategically targeting the vast Indian market. This move signifies a bold step towards tapping into the burgeoning gaming economy of South Asia.
Melco’s Strategic Focus:
Melco Resorts & Entertainment has set its sights on Sri Lanka’s gaming landscape, envisioning it as a gateway to the Indian market akin to Macau’s relationship with China. With a 20-year casino license secured from the Sri Lankan government, Melco aims to operate within the US$1 billion Cinnamon Life Integrated Resort, slated for a mid-2025 debut.
Insight from Melco’s Leadership:
Lawrence Ho, Melco’s Chairman and CEO, highlights Sri Lanka’s proximity to India and its economic growth trajectory as pivotal factors driving this strategic move. He emphasizes the untapped potential of the Indian gaming market, foreseeing Sri Lanka as a prime destination to cater to Indian gaming enthusiasts.
Target Market:
Geoff Davis, Melco’s Executive Vice President and CFO, underscores India as the primary feeder market for their Sri Lankan venture. Davis envisions a blend of local and international clientele, with a strong emphasis on attracting players from India and neighboring regions.
Revenue Projections and Investment Strategy:
Melco anticipates annual gaming revenues of up to US$250 million, with international play expected to contribute significantly. The company plans to invest US$125 million in outfitting the casino, viewing it as a calculated investment with substantial growth potential.
Differentiation through Integrated Resort Concept:
Melco aims to elevate Sri Lanka’s gaming landscape by introducing an integrated resort model, setting a new standard of excellence in the region. Partnering with local conglomerate John Keells, Melco seeks to redefine the gaming experience by offering a comprehensive entertainment destination.
Anticipated Returns and Shareholder Value:
While specific returns remain speculative, Melco expresses confidence in the venture’s profitability and shareholder-friendly outcomes. Lawrence Ho highlights the capital-light nature of the investment and the potential for robust returns, surpassing those achievable in mature gaming markets.
Melco Resorts & Entertainment’s foray into Sri Lanka’s gaming industry represents a strategic maneuver to capitalize on the burgeoning Indian market. By pioneering the integrated resort concept and targeting international clientele, Melco aims to redefine Sri Lanka’s gaming landscape while delivering value to its shareholders.