Suffering with mounting national debt and facing an uncomfortable conversation with the IMF to raise revenues for food, oil and other essentials, Sri Lanka’s national government has taken steps to recoup some revenue from the country’s existing casino industry. The government has announced the issuing of four new licences for land-based casinos on the island, which it hopes will help to raise the level of tax income and tourist revenue amid an economic slowdown.
There are already five casinos in operation in Sri Lanka, with the island nation’s population of 22million having had legal access to betting since 2010. In recent weeks, the country has seen the appointment of a new Investment Minister. The identity of that minister is now being highlighted as a possible reason for the new policy, given that it is none other than Dhammika Perera, the richest man in Sri Lanka and known to people within the island nation as the “Casino King” thanks to his significant stake in the Colombo facilities of Bellagio, Bally’s and MGM Casinos.
Sri Lanka is dealing with a national debt that it is currently unable to service, having recently defaulted on $51 billion; it is on target to see its deficit rise to upwards of $100 billion by the end of 2027. It would, therefore, be a relief to the national treasury to see the income from four new casinos. The price of each licence issued would, in all likelihood, be $1.4 million annually. This would be collected on each of the new casinos, and also on the existing five which would see their levy rise to that figure from £550,000 annually. While this would not repair the hole in the nation’s finances, it would certainly represent a useful income stream.
Muddying the waters on the potential for revenue from new casinos is the fact that, as of this moment, the national Inland Revenue department is struggling to recoup $7.4 million in aggregated existing back taxes from the casinos already in operation within Sri Lanka. They may find it harder still to collect on those taxes if they have raised the licence levy on said casinos by more than 100%. One presumes that they could start by asking the new Investment Minister if he can settle up. His net worth of $550 million means he’s surely good for it.
As of this moment, it’s not widely known who might come forward and take up the new licences (but, again, the fact that they are being announced so soon after the appointment of a new Investment Minister with links to the casino sector may offer some clues). Prime Minister Ranil Wickremesinghe has tentatively suggested that the casinos may be a way of bringing needed foreign investment into the country, but in the absence of specific bids it seems like we’ll have to wait and see who takes up the offer, if indeed it is taken up.