Nestled among the colorful streets of central Colombo, Sri Lanka, is a development that’s causing all the buzz in the international gaming realm: the City of Dreams. The crown jewel of this integrated resort development, owned by John Keells Holdings (the largest publicly traded conglomerate on the island nation’s Colombo Stock Exchange), is none other than a state-of-the-art casino to be operated by global titan, Melco Resorts & Entertainment Limited.
Through a pact, the Hong Kong-based Melco, already a renowned presence in China’s Macau, the Philippines, and Cyprus, has purchased a 20-year lease from John Keells for a tidy sum of $125 million. This lease grants Melco the sole rights to operate the City of Dreams’ centerpiece casino, a venture projected to be the country’s largest casino resort, and due to begin operations in the third quarter of 2024.
The City of Dreams is no mere gaming enterprise; it is a fully integrated resort sprawled over five floors, housing 113 premier guest rooms under the Nuwa hotel brand, which will be operated by Melco. The overall resort boasts 800 spaces, with 687 remaining keys functioning as Cinnamon Hotel, managed by John Keells. Promising not simply the roll of a dice, but an immersive experience, the entire casino landscape will be replete with state-of-the-art slot machines and live dealer table games, set to come alive by mid-next year.
Melco Resorts Chairman and CEO, Lawrence Ho expressed his optimism about Melco’s thrilling new venture in Sri Lanka. “We are delighted to unite with John Keells to introduce the City of Dreams to the island. We firmly believe in Sri Lanka’s potential as a premier gaming destination. This aligns perfectly with our strategic growth and diverse property portfolio,” he enthused.
John Keells Holdings, a commercial dynamo in Sri Lanka since its inception in 1870, wields interests spanning the hospitality sector, information technology, food and beverage products, supermarkets, tea brokering, life insurance, and financial services.
Despite their current share prices standing assertively at $6.60 on the Nasdaq, a significant plunge from their $25 peak in May 2019, the outlook for Melco Resorts remains immensely promising. Their performance in this year’s first quarter, characterized by a 55% increase in operating revenues to $1.11 billion, signals a resurgent wave in inbound tourism in Macau, where Melco’s footprint is most prominent.
John DeCree, a gaming analyst at CBRE Equity Research, buoyed investor confidence by endorsing Melco with a buy note and a price target of $13 today. The motivation behind his optimism included a robust first quarter, operational improvements in Macau, and Melco’s efforts to regain lost market share in the Chinese gaming hub.
“Sri Lanka offers a relatively low cost of market entry and we expect that this project will yield a handsome return on investment, with management forecasting $200 million to $250 million of annual gross gaming revenue from it,” DeCree remarked.
As the City of Dreams pulses closer to its grand reveal, the air in Sri Lanka is ablaze with anticipation, the shimmering lights of the casino beckoning to visitors from across the globe. It’s more than a resort; it’s a dream coming to life!
