On the sun-drenched shores of Colombo, a bold experiment is underway. Sri Lanka, celebrated for its ancient temples and turquoise beaches, is making headlines for an entirely new reason: a high-stakes bet on casinos and luxury tourism, led by its first Marxist president, Anura Kumara Dissanayake. As he approaches his one-year anniversary in office this September, Dissanayake is banking on a glittering wave of foreign investment to help lift the island nation out of the economic ruins left by the catastrophic collapses of 2022 and 2023.
The centerpiece of this strategy is the newly inaugurated City of Dreams complex—a $1.2 billion integrated resort that’s already being hailed as South Asia’s first of its kind. The project, a partnership between Sri Lankan conglomerate John Keells Holdings and Macau-based Melco Resorts & Entertainment, opened its doors in the heart of Colombo with the kind of fanfare usually reserved for Las Vegas. Bollywood superstar Hrithik Roshan was on hand for the launch, a sign of the high-profile attention the government hopes to attract from India and China’s well-heeled travelers.
But this isn’t just about glitz and glamour. According to The Independent, the government has passed sweeping new legislation to regulate gambling, establishing a Gambling Regulatory Authority. The move signals just how central the industry has become to Sri Lanka’s economic recovery plan. Deputy Tourism Minister Ruwan Ranasinghe put it plainly: “Tourism plays a very significant role for us to get out of these economic issues that we have. So these couple of years we are working more on short-term targets and getting traffic, but in the long run, our plan is to go for quality, more sustainable, and high-end tourism and casinos and gambling will be a segment of that.”
That segment could be a game-changer. Tourism accounted for about 4 percent of Sri Lanka’s GDP in 2024, and the government’s ambitions are sky-high—they aim to push that figure to 10 percent, with high-end gaming as a major contributor. Last year, tourism brought in $3.7 billion, and officials are targeting $5 billion for 2025, a goal that hinges on boosting tourist arrivals by 50 percent to a record three million visitors.
These aren’t just empty numbers. The central bank recently forecasted full-year economic growth of about 4.5 percent in August 2025, a notable jump from the World Bank’s April projection of 3.5 percent. For a $99 billion economy that only returned to growth in 2024 after two punishing years of contraction—and a $2.9 billion bailout from the International Monetary Fund—this is more than a statistical uptick; it’s a sign of hope.
The City of Dreams itself is a marvel of ambition. Perched on Colombo’s beachfront, the resort boasts 800 rooms, a luxury mall, and sprawling conference facilities. Investors are betting that these amenities will lure affluent visitors who might otherwise have headed to Macau or Manila. Lawrence Ho, Chairman and CEO of Melco Resorts & Entertainment, told Reuters, “It is a total greenfield market. It is similar to how we developed other markets in the past—in Manila, Macau and also in Cyprus. I think we are barely scratching the surface in terms of the tourism potential and also the integrated resort gaming potential of this country.”
There’s good reason for this optimism. Indians made up nearly a quarter of the two million tourist arrivals in Sri Lanka last year, while Chinese visitors accounted for 7 percent. Both groups have easy access—Sri Lanka maintains close economic ties with New Delhi and Beijing, and citizens of both countries enjoy visa-free entry. For a region where legal casinos are rare (India permits them only in a handful of states, and China restricts them to Macau), Sri Lanka’s new offerings are a tantalizing prospect.
Minister Ranasinghe expects this trend to continue: Indians, he predicts, will remain the main arrivals for the next decade. “With the arrival of City of Dreams—clientele from all over the world, I’m sure they will also come to Sri Lanka,” he remarked. The government’s bet is that high-rollers and luxury-seekers will do more than just gamble; they’ll inject much-needed foreign currency into the economy, supporting jobs and spurring broader development.
Of course, rapid change comes with its share of controversy. The new Gambling Regulatory Authority legislation, passed by parliament in August 2025, has drawn sharp criticism from experts and opposition politicians alike. The law grants extensive powers to the finance minister, excludes state-run lotteries from oversight, omits any representation from the tourism industry on the authority’s board, and sets what critics call “low penalties” for violations. Some worry that these provisions could open the door to misuse or undercut the very standards the law is meant to uphold.
Still, the government is adamant that regulation is a step forward—necessary to reduce social harm, raise employment, and promote a responsible industry. “There has been gambling in Sri Lanka and in Colombo but not that significant,” Ranasinghe acknowledged. “With the arrival of City of Dreams—clientele from all over the world, I’m sure they will also come to Sri Lanka.”
For many Sri Lankans, the stakes couldn’t be higher. The memory of the 2022 debt default still stings, and the country must resume repaying its creditors from 2028. Tourism, the third largest source of foreign currency after remittances and apparel exports, is seen as the best hope for a sustainable turnaround. The government’s vision is clear: transform Sri Lanka from a paradise for budget backpackers into a magnet for high-end travelers, with casinos as a key draw.
But can this gamble pay off? Sri Lanka’s leaders are betting that a carefully regulated casino industry—anchored by world-class resorts like City of Dreams—will attract the investment, jobs, and international attention the country needs to secure its future. Critics warn that without stronger safeguards and broader oversight, the risks could outweigh the rewards. For now, though, the dice have been cast, and Sri Lanka’s bold new experiment is drawing the world’s gaze to Colombo’s sparkling shoreline.
As Sri Lanka charts this new course, the world will be watching to see if its high-stakes gamble on casinos can deliver the prosperity its people so desperately need.
