James Packer's Sri Lankan resort development denied casino license

James Packer's expansion plans for his resorts business in Sri Lanka have suffered a setback, with the government refusing to grant a casino license for a planned $400-million (€288.3 million) development in Colombo.

Since 2007, the billionaire – a third gen of the Australian media dynasty behind Consolidated Press Holdings – has been moving away from his family's traditional interests to focus on developing his casinos and resorts company, Crown Limited.

He had set his sights on the Asian market to drive growth, and the planned 450-room development in Sri Lanka would bring 2,500 jobs to the south Asian country, according to Crown, as well as providing training opportunities.

Crown already has two resorts with inbuilt casinos in Macau, China, however his casino plans in Sri Lanka prompted a wave of protest from community and Buddhist groups.

Two other resort developments in Colombo were also denied licenses – a project pitched by local developer John Keells Holding, and another resort planned by Sri Lanka's richest man Dhammika Perera.

Although they cannot include casinos, all three resorts have been granted building permits, and have also been given 10-year tax breaks as part of the government's bid to boost tourism to at least 2.5 million visitors annually by 2016, up from just under 1.3 million at the moment.

It is not yet known whether the three developments will go ahead as planned.

There are several small, locally-run casinos in Colombo, but in 2010 the government designated special gambling zones in the city with the aim of attracting developers, but as yet none have been opened, and locals fear casinos would fuel a rise in crime, as well as prostitution, which is illegal. 

Economic development minister Basil Rajipaksa said in parliament last week that the government would not grant casino licenses now or in the future.

Sri Lanka suffered 26 years of civil war between 1983 and 2009, and, although the incumbent government currently has a comfortable majority in parliament, commentators have said it is unwilling to risk further civil unrest for the sake of casino developments. 

Packer inherited the family business, Consolidated Press Holdings (formerly Publishing and Broadcasting Limited), upon the death of his father, Kerry, in 2005. The holding company has a controlling interest in Crown Limited and a number of other companies.