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Melco says US$100m casino investment fulfilled, revenues VAT exempt
View(s):By Kapila Bandara
Melco Resorts & Entertainment, which opened the City of Dreams Sri Lanka casino in August, has invested Rs 30.2 billion in equity and loan capital in keeping with its undertaking of committing a minimum US$100 million, the company has reported in its financial filings.
The casino developer, owner and operator describes City of Dreams Sri Lanka as a capital light project, lowering its risks. Filings in the United States show that revenues of subsidiaries are exempt from VAT in Sri Lanka, while some subsidiaries “are subject to VAT on certain non-gaming transactions’’.
Melco Resorts is also liable to a monthly gross collection levy of 15% of the total collections from gambling on gross gambling revenues. But, there is an exemption if the monthly gross collections do not exceed Rs 1 million (about US$3,418).
Hong Kong-listed Melco Resorts has a US$100m commitment under its agreement with Sri Lanka’s Board of Investment signed June 2024. It had agreed to fund the casino through 20% equity and 80% loan capital as foreign direct investment. In March 2024, the then-government, despite not having a casino regulator, granted a 20-year casino license to Melco Resorts subsidiary Bluehaven, effective 1 April 2024.
Reporting interim results, the company, whose cash flow largely comes from Macau and Philippines, said as at 30 June 2025, the equity portion is Rs 7.510b (about 191.7m Hong Kong dollars) and loan capital is US$80m (about HK$628m) invested in its fully-owned, Sri Lanka incorporated subsidiary Bluehaven Services (Private) Limited, to operate and develop the casino.
Melco Resorts said it has “satisfied the investment commitment’’.
Previously, the company had reported at the end of the financial year, as at 31 December 2024, the group had made equity and loan investments of Rs 6.040b (about HK$153.612m) and US$20m (about HK$155.270m), respectively in Bluehaven.
Though not comparable, City of Dreams Macau non-gambling revenue alone was US$172.2m in the first half, bigger than the entire Sri Lanka investment, reflecting the sheer scale of Melco Resorts’ operations versus the minuscule Sri Lanka casino market.
In 2024, Macau’s gross gambling revenue was US$28.4b rising from US$22.9b in 2023. Citigroup has forecast US$33.3b in 2025.
Casino magnate Lawrence Ho Yau-lung, who is steering a diversified portfolio of innovative entertainment and luxury hospitality, flew in to mark the August 2 opening at by far the most flamboyant venue in Colombo operated jointly with diversified conglomerate John Keells Holdings.
At the City of Dreams Sri Lanka opening press presentation, Melco Resorts & Entertainment Chairman and Chief Executive Officer Mr Ho, acknowledged he had felt it seemed an impossible undertaking when he first visited Colombo years ago. The distinct, stand out sculptural building, the work (design, engineering and project management) of award-winning Sri Lankan architect Cecil Balmond of Balmond Studio had turned out to be a pleasant surprise, with its in-and-out façade, cantilevered spaces, and energetic interiors, broadcasting what
Sri Lanka can deliver.
Melco Resorts opened the Sri Lanka casino with a bounce in its financial step, returning to profitability in the first half, posting net income of US$49.7m, versus US$36.6m the year before. Operating revenues were US$2.56b versus US$2.27b.
City of Dreams in Macau, which draws high rollers, is Melco Resorts’ flagship integrated resort offering 430 gambling tables and 613 gaming machines. In the first half, the rolling chip (used by VIPs) wagers, a key performance indicator, was HK$11.54b. Non-gambling revenue was US$172.2m. Full year 2024 rolling chip volume was US$20.06b, an increase of US$634.8m from 2023.
City of Dreams Sri Lanka, on the 2.7 hectare site owned by Waterfront Properties, is made up of a luxury hotel, conference facilities, mall, casino, apartments, office tower, and an exhibition space. There are 17 restaurants and bars.
JKH subsidiary Waterfront Properties rents the casino floor space to Melco Resorts. Melco also manages the 113 room Nüwa ultra high-end hotel, the top five floors. The JKH and Melco partnership was made known formally in April 2024.
Incorporated in the Cayman Islands, Melco Resorts has casinos in Asia and Europe.
Its American depositary shares are listed on the Nasdaq Global Select Market in the United States. Melco Resorts operations are mainly in Macau and executive offices are in The Centrium in Hong Kong and Singapore’s Robinson Road.
Melco Resorts also runs Mocha Clubs that offer electronic gaming machines in Macau.
In the first half, the Macau government pulled in US$5.6b from gambling taxes.
Until 2021, Melco Resorts subsidiary, Melco Resorts Macau, benefited from a corporate tax holiday on gambling profits.
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