Colombo’s Casino Scene

By Michael Gregson

If you take a night time drive along Colombo's Marine Drive you can hardly fail to notice the Marina Casino. The Roman-style portico is illuminated with multi-coloured lights and the electric sign shines out in the darkness. The building is a Colombo landmark, but to most Sri Lankans it is an alien environment, as strange and forbidding as the surface of Mars. A no-go zone, tinged with the glamour of illicit entertainment.

In theory it is open to all. There is no entrance fee and the dress code is smart casual. None of the dinner jackets that you see when James Bond goes gambling. It is not female friendly. I didn't spot any women gamblers at the gaming tables apart from croupiers.

Lurking on the fringes were luridly made-up Chinese girls in short skirts and high heels. You can draw your own conclusions about why they were there.

Unlike gambling joints I have visited in the UK and US; the Marina is a haven for smokers. There are ashtrays at every table and if you run out of cigarettes, the casino provides more on the house. But powerful air conditioning stops the air becoming hazy with tobacco smoke. At least half of the gamblers we saw were smoking, puffing away intently as they placed their bets.

It was a fairly mixed crowd. There were many Chinese and Indians, a few from the Maldives, including a very friendly guy we got chatting to. There were also a good few Sri Lankans, but only 2 or 3 Europeans chancing their luck.

A pretty good band played covers of American oldies while the roulette wheels spun and the cards were dealt. Nice background music – but the audience's attention was elsewhere, firmly focused on how much money they were winning, or probably losing.

You don't have to be a very high roller to visit the Marina. The minimum bet is Rs 1,000, but you have to buy a Rs 10,000 stack of gambling chips to sit at one of the tables. Our group of three bought Rs 20,000 worth and we went home with Rs 9,000. In fact, Rs 3,000 a head wasn't that bad value. We were plied with free drinks, real Scotch whisky, and free food during the two-and-half hours we spent in the casino.

The game

For a Wednesday night it seemed busy. We had to wait a short while for seats to become free at one of the Blackjack tables. For those of you who have never played, Blackjack is among the most popular casino table games. Dating back to the 17th century French game, Vingt-et-Un (which literally means '21'), it awarded players a special pay out for holding an Ace and Jack of Spades – a 'black Jack'.

The game arrived in the US after the French Revolution and from there it spread around the world. The modern game of blackjack has the player aiming for a hand total of closer to 21 than the dealer, without going over, with a special pay out for a two-card hand that totals 21 (Blackjack).

As a teenager at boarding school in England, I'd play the game for pennies with my friends to pass the time on boring Sunday afternoons. Like all forms of gambling, it can be addictive. I felt the same thrill forty years later at the Marina in Colombo, as did my two companions, a European and a Sri Lankan. Blackjack is relatively low risk game and it is possible to beat the house by counting the cards and working out the odds on each draw of the cards. Expert card counters have made a lot of money from casinos and many have banned them.

We were not expert, but we were careful and cut our losses when we thought we'd spent enough. My Sri Lankan companion was schizophrenic about gambling. He thoroughly enjoyed playing Blackjack, once he'd got the hang of the rules. Like many Sri Lankans he condemned gambling as an addiction that can bankrupt people and destroy families. But he kept on playing and believes that gambling is a personal vice that should be permitted, but regulated by government.

My European companion had a good time as well and agreed that you have to be cautious when it comes to gambling.

"There was an element of slight loucheness. Having been to casinos in Las Vegas and London, it was a little frayed at the edges. There were one or two there who were very compulsives gamblers, buying chips all the time and getting very intense. Everyone enjoys a flutter, but it is addictive so you have to be careful about how much you spend."

Casinos are very controversial in Sri Lanka. The previous Rajapaksa government gambled and lost on plans for a series of major casino projects in Colombo, which were at the heart of proposals to rejuvenate Sri Lanka's economy.

His successor as President, Maithripala Sirisena, had made scrapping the new casinos part of his successful election campaign, wooing conservative Buddhists by attacking the developments as "antisocial business concerns".

As promised, Sirisena rescinded their licences and cancelled the deals, including a $400 million project backed by Australian billionaire James Packer, who was declared unwelcome in Sri Lanka by the new Prime Minister, Ranil Wickremesinghe.

"Please don't come – not in this lifetime. We need only good investors... we don't want an economy relying on casinos."
The risk

Sri Lanka's decision to end casino developments may be politically popular, it also risks putting off other potential foreign investors, according to Sasha Riser-Kositsky, an analyst at consultants Eurasia Group.

"The medium to long-term implications is that it has the potential to further deteriorate Sri Lanka's fiscal accounts. It's certainly something that international investors that hold some of Sri Lanka's debt and multilateral financial institutions are going to be looking at, given Sri Lanka's history of macroeconomic imbalances and currency and reserve problems," said Riser-Kositsky in an interview with World Finance.

Advocates of foreign investment in Sri Lanka's casinos also hoped that the arrival of Packer, and potentially other international gambling tycoons, would allow the island to follow the success of Singapore, which liberalized gaming in 2005 and earned more than $ 6 billion in casino revenue during 2013.

However, analysts doubt that Singapore's model could easily be replicated in Sri Lanka. The island's tourism economy has traditionally relied on attracting European visitors to beach resorts, rather than shorter city breaks, though that model is changing as more and Chinese visitors arrive. Gambling is big in China, though officially illegal apart from in Hong Kong and Macau. In 2010 a British newspaper reported that an estimated one-trillion Yuan are wagered in illegal gambling every year in China.

But the potential to further cash-in on the lucrative Chinese market has been lost for now in Sri Lanka. New casino developments have been attacked by prominent Buddhist monks, who have linked casinos to prostitution and alcoholism. Opposition leaders also criticized tax breaks given to Packer's resort in particular, painting it as a pet project of former President Rajapaksa and his powerful family.

Packer's exit is also likely to complicate plans to diversity the island's tourism economy, Murtaza Jafferjee, chief executive of Colombo-based financial services group JB Securities, told the London Financial Times:

"Sri Lanka could become an ideal leisure hub for visitors from elsewhere in South Asia, with gaming in Colombo being one major attraction, as it has been in Macau. Now Sri Lanka must rely more on resort tourism, rather than city tourism, which will make it harder for tourism to expand."

Casinos are a cash cow for the Sri Lankan Government, but owners warn that there is a danger of killing the golden goose.

Immediately after coming to power, the Sirisena government imposed a new Rs 1 billion levy on Sri Lanka's casino operators. Later in 2015 the government doubled the annual casino levy from Rs 200 million to Rs 400 million and imposed a 25% tax on casino profits. They did, however, abandon plans to impose $100 casino entry fee.

The 2016 Budget also proposed to amend the Finance Act to make directors and shareholders personally liable for non-payment or any act which is taken to avoid payment of the Casino Industry Levy.

My own experience at the Marina, albeit on just one night, suggests that business is pretty good. My impression is backed up by the Inland Revenue Department. Their figures indicate that between them the big casinos are generating net profits of Rs 100 million a month and none of them seem to have any problems paying their taxes.

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