ECONOMYNEXT – Sri Lanka’s John Keells Holdings will finalize a deal with a casino operator for its Cinnamon Life integrated resort, Chairman Krishan Balendra said after the government issued rules to regularize gaming.
“As the Government has gazetted the legal framework and regulations for gaming, we will finalize arrangements with a license holder and operator to rent the designated casino area at Cinnamon Life,” the Balendra said.
“Then we will begin fitting out and equipping the space.”
CAL Research in a note to clients said a 5-star hotel in an integrated resort usually earns 50 percent more room rents than a stand alone one. Cinnamon Life is expected to open in the first half of 2023 and the casino in 2024.
JKH is expected to get rent and a share of the profits of the casino, in addition to higher occupancy for its 800 room hotel and more patrons for the mall.
“Cinnamon Life will transform Colombo as a leisure and entertainment destination for the region, and lead to substantial foreign exchange earnings for the country,” Balendra said.
“Opening of integrated resorts in Asian destinations like Singapore and Manila resulted in a surge in tourist arrivals.
“We are close to India and there are no integrated resorts in India or the rest of South Asia. Cinnamon Life is a game changer.”
Sri Lanka has gazetted rules to issue five year gaming licenses for 500 million rupees. An operator could apply for a 20 year license with a pre-payment.
JKH could strike a deal with an existing operator or a joint venture, analysts say.
JKH may get a rental income of around 2 dollar per square feet and around 10 percent of profits which will increase to 25 percent by 2030, CAL said.
The operation may at 7.1 million US dollars to JKH revenues in the first year of operation. (Colombo/Sep20/2022)