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Sri Lanka stands at the crossroads as it prepares to open a luxury integrated entertainment resort. The glittering resort—complete with casinos, luxury hotels, and entertainment venues—symbolizes the country’s ambition to remake itself as a regional leisure hub. But behind this shiny façade lies a troubling story of misplaced priorities, moral contradictions, and economic shortsightedness.

A shift in purpose

The project’s origins date back to 2014, when Sri Lanka was under President Mahinda Rajapaksa, a domestically-driven commercial and hospitality venture. It was projected to boost tourism and urban development in Colombo, with no plans for large-scale gambling operations.

The Project was rendered  easier by then Defence Secretary Gotabaya Rajapakse’s campaign to remove the thousands of sub human dwellings in the adjoining Slave Island area amidst the tears and pleas of the poor who were unceremoniously removed from their homes of decades.

Fast forward to April 2024, amid the worst economic crisis in the country’s post-independence history, the project underwent a dramatic transformation. Hong Kong-based Melco Resorts & Entertainment—operators of mega casinos in Macau. With this partnership came the rebranding of the project. The deal granted Melco a 20-year casino license and the right to invest around US$125 million solely for gaming operations.

This was not a minor adjustment but a complete change in the project’s character, shifting from a mixed-use commercial project to a casino-centered entertainment hub, modeled after Melco’s City of Dreams in Macau which had transformed the Chinese administered District into the “gambling capital of the world.”

In 2022–2023, Sri Lanka defaulted on its foreign debt, suffered hyperinflation, and saw unemployment and poverty skyrocket. Families struggled to afford food and medicine, and thousands fell below the poverty line. Against this backdrop, came the construction of a glitzy casino resort—targeting foreign high-rollers and a handful of locals.

Instead of prioritising essential economic recovery measures or poverty alleviation, Sri Lanka has chosen to gamble on luxury tourism, hoping to attract affluent tourists from India and China. But the benefits of such projects rarely trickle down to the poor. Instead, they risk widening the inequality gap between those who profit from gambling and those driven deeper into hardship by its social costs.

The ethical dissonance

Buddhist monks, Catholic and Christian priests, Islamic scholars, and Hindu leaders have remained largely silent. There has been no public outcry, no pastoral letters, no sermons warning of the dangers of this casino culture. Religious institutions, which have historically shaped the island’s ethical compass, appear to have abdicated their responsibility to guide both the public and the state on such matters.

Their silence raises troubling questions: Have religious leaders been co-opted by political and economic interests? Are they too afraid to challenge a government desperate for foreign investment, or are they complicit through their inaction?

A cautionary tale

Sri Lankan policymakers often cite Macau as a success story to justify this venture. But a deeper look reveals a more complicated picture. While Macau became the world’s top gambling destination, surpassing Las Vegas, it also saw dramatic increases in social ills.

Gambling addiction soared, wrecking families and driving people into debt. Housing prices skyrocketed, forcing lower-income residents out of the city center.Cultural heritage gave way to glitzy resorts and neon lights.

The casino economy became a magnet for organized crime, money laundering, prostitution, and loan sharking.

Melco Resorts, a key player in Macau’s rise, now brings this same model to Colombo. The question is whether Sri Lanka can—or should—replicate such a model, especially in a fragile post-crisis context.

Undermining fiscal reform: The IMF’s warning on tax holidays

Economic concerns compound the moral dilemmas. The International Monetary Fund (IMF) has warned against tax holidays in its 2024–2025 reviews. The IMF has called on Sri Lanka to curtail open-ended tax holidays that erode the government’s ability to collect revenue—revenue desperately needed for debt repayment, public services, and social safety nets.

This is economic policymaking at its most contradictory: burden the poor with higher taxes and cuts to social services, while allowing luxury resorts and casinos to enjoy decades of tax-free profits.

A matter for urgent parliamentary debate

Sri Lanka’s Constitution does not allow for decisions of such moral and financial magnitude to be taken in the shadows. Parliament must urgently debate the following questions:

Should Sri Lanka offer long-term tax holidays when it is struggling to rebuild its economy?

What safeguards are in place to prevent gambling addiction, money laundering, and social decay?

Should economic recovery be built on activities that most religious and ethical traditions discourage?

These questions are too important to be decided solely by technocrats, business elites, or foreign investors. They demand a national conversation that includes not just economists and politicians, but also religious leaders, civil society, and ordinary citizens.

A test of national character

It is a moral test for Sri Lanka. Will the country sacrifice its ethical and constitutional values in the pursuit of short-term economic gains? Or will it choose a path of recovery that aligns with its spiritual heritage and social responsibility?

Sri Lanka has long prided itself on being a nation where spiritual values and community welfare come before profit. The question now is whether those values can withstand the lure of foreign investment.

Unless Parliament steps in, unless religious leaders find their voices, and unless civil society demands accountability, where the promise of prosperity masks a deeper social and moral decay.

This is a conversation Sri Lanka must have now, before the dice are rolled and the stakes become irreversible. (javidyusuf@gmail.com)