I wrote on the justification for and against Mega Casinos in Sri Lanka yesterday. I believe out of the comments I received there is a very important matter that has been forgotten on the arguments and debate, namely the value of a Casino license itself.
The Govt. is merely playing it safe pretending there are NO new Casino licenses being given, merely a transfer of the Casino from existing venues to the new Casino road of DR Wijewardene Mawatha as the new location for them!!
What does this mean? After all, Casinos are currently illegal in Sri Lanka despite one source in today’s newspaper that says there are 12 operational Casinos in Sri Lanka today. If there is a restriction of Casinos, the license to operate one has immense value. The Govt has decided it seems to permit 4 mega casinos on DR Wijewardene Mawatha, with Packers Crown being the first, then the JKH groups resort, and then Dhammika Perera’s Mega Hotel and Casino, that I know of.
Should the licenses merely be transferred, adding immense value to those who currently own them, such as Dhammika Perera, and Ravi Wijeratne and others I do not know? Like one of the comments made on the earlier entry, that Ravi Wijeratne’s Casino value was calculated at Rs10B because of how the share structure of the Crown Resort where he receives 45% of the shares for transferring his license to Crown, and him not having to put in any capital!!
This means that a license in an environment of only 4 Casinos being permitted, would value it at US$125M each! Of course the more Casinos permitted, the lower the individual license would be worth. Then should these licenses be auctioned to the highest bidder? One would argue that making a payment upfront is not practical for an investor who has to spend another $500M to build the resort. I would say then defer the payment to a later stage or stagger it, but nevertheless agree to a payment plan or forfeit the business.
I do not know how existing licensees got them, but if they lose them, they have already reaped the value paid and so have had a handsome return on their investments. They should not be upset at having lost them, especially as they were operating outside the law under special dispensation which effectively meant as long as one paid obeisance to the current rulers to permit Casinos.
Readers! any thoughts on this point, please feel free to air your views. Surely this matter should have been forefront of a public debate, and instead no one has raised it yet. Hope the Casino kings will not try to slit my throat putting a spanner in their carefully concealed plans by pulling the proverbial wool over our eyes!
At least this is my legacy to the Nation!