The Casino Conundrum; No To Unlicensed And Tax Free Casinos In Sri Lanka
By Harsha de Silva -February 11, 2014
Dr Harsha de Silva MP
Forbes says Packer has got Cabinet approval for his Crown casino in Colombo
Forbes Asia reported on 29 January 2014 that Australia’s casino king James Packer had claimed he just won approval from the Sri Lankan government to build a five-star casino resort in Colombo. Sydney Morning Herald had also reported a few days earlier on 23 January that Packer received government approval to build a resort in Sri Lanka but without explicit approval for a casino. It said that Crown was in discussions with the government on the ‘gaming side’ of the project.
What the Cabinet approved on 20 January 2014
What Minister Lakshman Yapa Abeywardana sought approval from his Cabinet colleagues and obtained was large-scale tax breaks for James Packer’s Crown project along with two other projects. I will only discuss the Crown project for the moment to keep the focus narrow. The Minister identified the project published in the extraordinary gazette on 17 December 2013 as an “integrated super luxury tourist resort facility which includes high end shopping malls and high quality residences and office spaces and service spaces with associated facilities”.
How is it different from the previous Cabinet approval?
The first major difference of the project with what was published previously in the gazette of 23 September 2013 and subsequently approved by the Cabinet is the disappearance of the two words ‘gaming activities’. This is what the previous gazette said “an integrated resort with meeting and convention facilities, gaming activities, fine dining restaurants and other associated facilities”. The other is the disappearance of the section on Betting and Gaming Levy that applies to ‘gaming activity’. So at face value the new approval is for a resort without a casino; unless of course this is an attempt to mislead the public.
Tax breaks given to Packer’s invisible casino?
As per the usual practice for strategic investment projects Packer has been offered a complete tax waiver for the first 10 years and partial waiver for the next 12 years along with a host of other concessions. Providing tax breaks for large investors has been accepted practice and up to now no major opposition has been brought on any such incentives. Even in this case, the issue is not on tax breaks for the ‘super luxury resort’ but for a possible casino hidden under ‘service spaces with associated facilities’.
