James Packer outlines plan to turn Sri Lanka into gambling mecca

James Packer outlines plan to turn Sri Lanka into gambling mecca

November 13, 2013 – 4:02PM

Colin Kruger

Just days after receiving approval to build a $1.5 billion luxury hotel and casino at Sydney Harbour development Barangaroo, James Packer is making his most public pitch yet to build a $400 million casino resort in Sri Lanka. In a speech to be delivered to delegates at the Commonwealth Business Forum in Colombo overnight – a conference being held ahead of the Commonwealth Heads of Government Meeting – Mr Packer said a luxury casino resort is a necessity if Sri Lanka is to achieve its potential to become ‘‘a leading tourist mecca for the rising middle class of India, China and the rest of Asia.’’Mr Packer said Sri Lanka’s ‘‘ambitious’’ tourism targets are ‘‘only achievable with the right tourism infrastructure and attractions’’ and cited the success of Singapore in turning around its performance as a tourism destination with the development of two integrated casino resorts.

Mr Packer has added $3 billion to his personal wealth since July last year as shares of his casino operator, Crown Resorts, doubled in value. The main driver of this growth was investors recognising the success of his bet on Macau which has become a gambling mecca for mainland China.


He hinted that Sri Lanka’s proximity to India could provide a similar opportunity as a growing proportion of India’s population becomes wealthy.

‘‘The demographic changes we are seeing in India and China are extraordinary,’’ Mr Packer said. ‘‘The size of the middle class in India currently stands at around 170 million; and is estimated to be growing by 40 to 50 million per annum over the near term.’’

He cited a McKinsey study which said, income levels are expected to almost triple and the size of India’s middle class population base could swell to 580 million by 2025.

As with China, the rising affluence of India’s middle class population means more of their spend will go on leisure activities. Around 50 million people will travel overseas by 2020 compared to just 4 million in 2000, according to Mr Packer.

This middle class will need to go overseas to indulge in any gambling.

India’s gambling market is limited to two states, Goa and Sikkim, and laws prevent direct foreign investment.

As with China’s gambling enclave, Macau, it is India’s resistance to gambling on the subcontinent that is expected to allow Sri Lanka – just a four-hour flight from India’s major cities – to thrive as a gambling hub.

This trip may provide Mr Packer with his last chance to lobby the Sri Lankan government before legislation to grant tax breaks to his consortium go before parliament.

The legislation was delayed last month after opposition to the proposal forced the Sri Lankan Government to make changes. It is now expected to go before parliament in December.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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