Melco’s expansion beyond borders will not harm Macau, experts say

Former International Legal Affairs Bureau head and Gaming Law Commissioner Jorge Costa Oliveira told the Times that expanding Melco Resorts & Entertainment’s (Melco) integrated resorts portfolio to other jurisdictions will not risk the Macau market or local government interests.

“It is perfectly natural that Melco expands to other geographies, as is the case in Sri Lanka or Cyprus. In both cases, the strategic geolocation of these new resorts aims at catering to a relevant integrated resort to a much larger customer base than the respective domestic market,” Costa Oliveira said, remarking that this search for new markets can even result in a positive attraction effect of new patrons to Macau.

“Given the new markets considered, Macau government interests will not be harmed. Neither fiscal revenue nor visitation should see any cannibalization from this new Melco venture in Sri Lanka. Actually, in the medium term, relevant Sri Lanka patrons likely end up coming to Macau,” he added.

The gaming and tourism law expert added that, in Sri Lanka’s case, “it seems clear that the intent is to reach the coveted South Asian market, starting with India.”

Costa Oliveira remarked that, in addition to getting access to new markets, Melco will be able to internationalize its brand and add significant new customer networks at the level of high-net-worth individuals potentially interested in visiting Macau.

Questioned on the same topic by the Times, Ben Lee, managing partner at IgamiX, said, “There appears to be some mixed messaging occurring at the geopolitical level. Thailand was recently cautioned against introducing casinos, yet the chatter was that Melco was encouraged to support the BRI [Belt and Road Initiative] in Colombo,” Lee added that, “Thailand has been a strong Chinese destination in the past, and will undoubtedly recover in due course. The potential addition of  gaming to its mix was always going to concern Macau and China.”

Melco’s City of Dreams Sri Lanka is the country’s largest-ever private investment project.

The project is a joint development by local conglomerate John Keells Holdings and Macau’s gaming operator Melco. It features a casino, two hotels, retail outlets, restaurants, and MICE facilities.

“This is the largest private investment in our country’s history,” said Krishan Balendra, chairperson of John Keells Group, at the launch. “It’s not just a development but a destination designed to catalyse economic growth.”

Balenda added that the integrated resort has been designed to draw affluent tourists from India, the Middle East, Russia, and China, positioning Colombo as a gateway destination.

At the launch, Melco’s chairman, Lawrence Ho, said, “Sri Lanka can be to India what Macau is to China. Macau is by far the biggest gaming market in the world. Colombo is the closest destination to India, and an integrated resort like this gives the city a lot of potential.”