By Carolyn Cummins - The Sydney Morning Herald.
James Packer's Crown group faces a new set of hurdles in his quest to open a $US400 ($457) million casino in Sri Lanka after threats by the country's president that new gaming levies will be imposed should he win the upcoming January elections.
Sri Lankan President, Mahinda Rajapaksa, who is set to seek an unprecedented third six-year term, announced new funding measures in his latest budget.
This includes a $100 entrance fee and a 10 per cent gaming levy on three proposed casino resorts, including one venture that includes Mr Packer's Crown Ltd.
Crown confirmed that it is still in discussions with the Sri Lankan government and did not comment further.
Mr Packer has been actively pursuing clearance for his proposed mixed-use resort development in Sri Lanka.
In May this year the government gave approval for all three projects to go ahead, without the casinos, and also granted 10-year tax breaks - despite strong opposition.
The opposition UNP and some of Mr Rajapaksa's own coalition partners who broke ranks voted against the tax concessions but the government has a comfortable majority in the 225-member legislature and the legislation was passed.
There has been speculation that the three projects would be able to operate as casinos by transplanting the licences already held by local partners.
Crown is undertaking the push into Sri Lanka with a local partner, Rank Holdings, which holds two casino licences.
Mr Packer has previously remarked that Sri Lanka's ambitious tourism targets were "only achievable with the right tourism infrastructure and attractions" and cited the success of Singapore in turning around its performance as a tourism destination with the development of two casino resorts.
At the Crown annual general meeting in mid October, Mr Packer said: "As I have spoken about in the past, Crown is also looking at the rise of the middle class in other parts of Asia, including India. We are negotiating with potential joint venture partners and the Sri Lankan government to target this market by building the country's first luxury integrated resort in Colombo and that work continues".
Crown's projected opening in Sri Lanka is 2018, and it is being billed as the country's first integrated resort with 450 luxury rooms, a signature restaurant and bars, a spa and pool and a "thematic lake water feature".
Mr Packer's push into South East Asia follows the success of his Macau venture, Melco Crown Entertainment.
Crown is also looking at expanding into Philippines and Japan, as well as a new property in Las Vegas.
But Crown is also growing in Australia with a "six star" hotel and casino at Barangaroo in Sydney, which got the green light for a restricted gaming licence for Crown Sydney, from the NSW government in May.
Lend Lease, which is developing the $6 billion Barangaroo site, has said it is in "ongoing discussions" with all the "stakeholders" in the project.
"Nothing has changed [with Crown's plan] ... it is a very significant piece of land and we must consider a whole lot of options with a range of land owners," Lend Lease's chief executive Steve McCann said after his group's annual general meeting last Friday.
Crown has also entered into an agreement with a subsidiary of the international Chinese diversified property group, Greenland Holdings Group, to jointly prepare a detailed proposal to bid for the development of the Queen's Wharf precinct in Brisbane.
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