The leading developer, owner and operator of integrated resorts in Europe and across Asia, Melco Resorts & Entertainment Limited, announced it engaged in a strategic partnership with the largest conglomerate on the Colombo Stock Exchange and company with a rich history, John Keells Holdings PLC. Per the latest agreement, announced earlier this week, Melco was designated as the casino operator for John Keells’ integrated resort Cinnamon Life Integrated Resort.

Melco confirmed that under the terms of the collaboration, the Cinnamon Life Integrated Resort will be rebranded to City of Dreams Sri Lanka. In exchange for the rights to operate the casino, the company agreed to pay John Keells approximately $125 million. The announcement also comes after Melco recently secured a 20-year casino license from the Government of Sri Lanka. Ultimately, through the new deal, Melco secured access to the regulated gambling sector in the country, paving the way for its future growth.

Lawrence Ho, Melco’s chairman and CEO, revealed that the deal with John Keells marks a milestone achievement for the company’s development in the country. “We believe Sri Lanka has immense potential and this opportunity complements our existing portfolio of properties,” he added.

“We are thrilled to be part of this landmark development in Sri Lanka and to be in partnership with John Keells. We believe Sri Lanka has immense potential and this opportunity complements our existing portfolio of properties.“

Lawrence Ho, chairman and CEO at Melco

The Company Expects the Project to Boost Tourism in the Area

Additionally, Ho spoke about the exceptional potential of City of Dreams Sri Lanka, predicting that it will help propel tourism and lead to economic growth. He said that the company is expected to leverage its extensive experience in operating integrated resorts across the globe. Finally, Ho said: “We will continue to work closely with our esteemed partners and the Sri Lankan Government to ensure the success of this venture, and we expect to make a significant and positive impact on the local community and economy.”

The collaboration will see Melco operate not only the gaming area at City of Dreams Sri Lanka but also manage the top 5 floors of the venue’s hotel. The company will use its luxury Nuwa brand for 113 of the 800 hotel rooms at the integrated resort. Melco’s Nuwa brand is recognized for its luxury rooms, promising supreme hospitality experiences.

The part of the hotel which will be managed by John Keells is expected to be completed and start operating around the third quarter of this year. On the other hand, Melco confirmed that it expects to start operating the casino at City of Dreams Sri Lanka around mid-2025.

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Developer, owner and operator of integrated casino resorts in Asia and Europe, Melco Resorts & Entertainment, has seen its rating upped from Neutral to Outperform by Credit Suisse.

Summer Holidays and Chinese Policy

Credit Suisse said in its report that summer holidays and developments around Chinese policy were behind the decision to raise the rating of Melco Resorts to buy, considering these developments as positive catalysts.

Commenting in the report, Credit Suisse equity analyst, Kenneth Fong, outlined that a better-than-expected rate of recovery of the gambling industry in Macau, together with a supportive government in the SAR are the factors that should provide support for Melco shares.

Fong also marked the positive impact on the recovery of mass gaming from recent non-gaming developments in Macau. The return of live concerts at some of the city venues was reflected in a recent note by JP Morgan and considered a factor to raise June expectations.

“We like MLCO’s quality non-gaming assets, proven by its recent successful launch of non-gaming events, which should offer the most positive earnings surprise in 2Q23,” Fong wrote, noting that non-gaming would likely bring benefits to the company by speeding up the mass gaming segment recovery in times when “sustainability of the ability in attracting new players remains to be seen.”

Live Music Events Helping Mass Gaming

Melco Resorts was actively involved in the return of live music events to the city, featuring a series of 14 concerts by Cantopop artist Leon Lai Ming at its cinematically-integrated casino resort in Cotai, Studio City. Other venues featuring live concerts were The Venetian Macao and Galaxy Arena.

Besides Studio City, Melco Resorts currently operates two other integrated casino resorts in Macau, Altira Macau in Taipa, and City of Dreams, in Cotai, while its business in the SAR also includes the largest non-casino based operation of electronic gaming machines in the city, the Mocha Clubs.

Outside of Macau, Melco Resorts operates and manages via a subsidiary an integrated resort in the Entertainment City complex in Manila, City of Dreams Manila, in the Philippines, and is currently developing what is expected to be the largest premier casino destination resort in Europe, City of Dreams Mediterranean in Limassol, Cyprus.

Until City of Dreams Mediterranean becomes operational, Melco Resorts was allowed to open a temporary casino and is currently operating the first authorized casino in Cyprus.

In addition, Melco received a license to operate four satellite casinos, Cyprus Casinos, which, unlike the temporary facility, will continue to function after the opening of the integrated resort.

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The project features a 7,500-square-metre casino that includes slot machines, table games, and a dedicated poker room for players who wish to enjoy their favorite game a little more competitively. The sluicegates will open on July 10, 2023, when Melco Resorts & Entertainment starts promoting the venue more aggressively and focuses on getting more footfall. The company has been long-preparing for this opening, including the training of staff for its casino.

A Project That Promises Quality Gaming and Accommodation

The July 10^th opening will follow a one-month period of acclimatization beginning on June 12, 2023, when City of Dreams Mediterranean is going to start accepting visitors as part of its soft-opening period. Accommodation is not lacking with the resort featuring 500 guest rooms and suites, as well as one of the largest Presidential Suite options in Cyprus.

The rooms have private balconies with views of the Akrotiri Salt Lake, the Troodos Mountain Range or Lady’s Mile Beach. The casino offering is aligned with Melco Resorts’ global footprint and ability to bring exclusive offers to its customers worldwide.

In terms of other recreational activities, City of Dreams Mediterranean will tempt guests with both the quality of its gaming facilities as well as with the deliciousness of its dining options.

The venue will feature meals from Amber Dragon’s Pan-Asian Fusion, Aura’s Middle Eastern Delights, Ana’s European Contemporary, and Oléa’s Real Mediterranean Flavors. There are other dining options, with more to arrive in the future as well.

The Grand Ballroom can host up to 1,000 people, and the facility features an Amphitheater, meeting spaces, and other recreational activities.

City of Dreams Mediterranean Offering Tons of Amenities

Commenting on the upcoming project, City of Dreams Mediterranean general manager Grant Johnson said that the company was thrilled to welcome the new project and its guests:

A landmark project and our first venture in Europe, it will bring Melco’s standards of entertainment and leisure and welcome innovation to Cyprus’ luxury hotel scene.  

City of Dreams Mediterranean general manager Grant Johnson

There is more as well, with the Renu Spa & Fitness offering rejuvenating treatments and more. There is a designer shopping promenade to keep guests never wanting for goods, and famous DJs will fly in to ensure that party-goers are having a might good time. The project has been designed with sustainability in mind, which is one of the City of Dreams Mediterranean is also hailed as an exemplary project in terms of environmental impact.

The upcoming casino resort features Europe’s grandest casino, extensive entertainment options, and the biggest expo center in Cyprus, the company concluded. The launch of the project is a welcome development after the company confirmed late last year that it needed to fill 1,000 jobs. It seems that it has all gone as planned.

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Melco Resorts has expanded its Macau properties with three new gaming areas for foreign players. The news comes amid the strong recovery of the gambling industry in the special administrative region.

The company chairman and chief executive officer, Lawrence Ho, spoke about the new areas during the recent opening of an indoor water park at Studio City. In an interview with Inside Asian Gaming, Ho addressed the new areas, saying that they are Melco’s way to keep up with the increasing number of foreign tourists.

The CEO said that now both City of Dreams and Studio City have gaming areas for foreigners. He noted that two of them are in the former property, and another one in the latter, providing extra gaming tables for visitors.

Ho noted that the crowds coming to Macau have been increasing following the lifting of the visitation restrictions. He believes that the region will attract even more visitors in May.

The COVID Woes Affected Melco’s Business

The COVID-19 pandemic and China’s zero-COVID policy devastated Macau for a time. The local gaming and entertainment industry was struggling to cope with the travel restrictions and the sudden lack of visitors.

Amid all this trouble, many of the local operators reported subpar results. Melco, for example, announce a net loss of a whopping $931 million USD in 2022. This was the second devastating year in a row for the company, which lost another $810 million in 2021.

Luckily, Ho believes that Melco’s results will be better this year. While he lamented losing so much money in the past three years, he said that Melco is not expected to lose money in 2023. However, its bank debt has increased substantially, meaning that the company will have to work extra hard to pay its debts.

Ho counts on Melco’s signature facilities and entertainment offering to attract more visitors to Macau. Now that border tourism has been restored, his team hopes that many foreign tourists will come to the special administrative region.

A week ago, Macau reported that its gambling industry continued to rebound in March. The total gross gaming revenue recorded in the region sat at $1.58 billion, representing a substantial year-on-year increase.

Credit Suisse ex attributed the favorable results to the resumed package tours, which continue to bring more and more people to Macau. This extra visitation translated into a daily GGR boost of around $41-46 million in mid-March and $59-62 million in late March.

However, more needs to be done if Macau is to return to its pre-pandemic results.

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Melco Cyprus has received an extension of its target opening date for its City of Dreams Mediterranean to June 30, 2023, still within its earlier stated target date of Q2 2023. When transitioned from the current temporary casino to the permanent venue the resort with gambling is expected to be the largest integrated destination resort in Europe as well as the most highly sought location.

While construction continues, the company is currently operating three permanent satellite casinos and a temporary casino which will cease to exist when the main site opens its gaming floor.

According to a report in the local Cyprus Mail, the operator is well aware of the outsized impact a successful integrated resort will have on helping to develop the island’s tourism industry which was one of the main reasons it was approved to become the first and only casino resort on the island when a license was approved in 2017. Other operators may apply for future tenders after a 30-year moratorium expires on the granting of additional licenses.

The acknowledgment of the operator’s responsibilities to the Cypriot community was expressed by senior vice president of casino sales and marketing, Grant Johnson at a recent event that marked the 5-year anniversary of the first-ever casino license issued in the country since it was divided by a UN Blue Zone from the Turkish-occupied northern part of the country following a 4-week war in 1974.

Illegal Casinos Operate Outside of Cyprus-Proper

Several casinos operate in northern Cyprus, in a sort of gray zone seemingly exempt from Turkey’s strict laws against gambling. Other pop-up and temporary casinos also operate briefly in the Blue Zone where laws have been easily manipulated and unlicensed operators can scoop in loads of cash before being shut down by laws that are difficult to enforce and prosecute.

At the event, 57 of the original employees of the licensed operation were awarded plates to commemorate their early service to the resort. Johnson said that Melco would continue to work toward assuring the country would become a global business and entertainment destination.

“Melco Cyprus is managing the temporary casino in Limassol and three satellite casinos in Nicosia, Ayia Napa, and Paphos, while at the same time developing the City of Dreams Mediterranean resort-casino, a project that aspires to be a game-changer in the island’s tourism industry,” according to an announcement from the company.

Speaking directly to team members at the event, Johnson said: “Five years ago, City of Dreams Mediterranean was a distant dream, but now we are just months away from opening.

“You have helped us grow this organization and another 2,500 colleagues will soon join our team and follow in your footsteps,” he added.

He also noted that the company and team seek to help create a sustainable future for Cyprus.

Former President Visited in February

Last month, Melco hosted former Cyprus president Nicos Anastasiades at the Limassol resort.

Anastasiades said at the time: “The creation of a multi-thematic resort was one of the government’s goals since we know that its creation would contribute towards enriching our tourist product, increasing tourist arrivals and creating new jobs, with obvious benefits for the Cypriot economy.”

According to a recently released Unaudited Fourth Quarter 2022 Earnings Statement and comments by the company’s director, Lawrence Ho, the company is currently struggling with pandemic-induced losses but the temporary casino in Cyprus has surpassed 2019 revenues and City of Dreams Manila is catching up. The company was also granted a new 10-year concession for its gambling and entertainment properties in Macau.

For all outfits Cyprus operations, the company had operating revenue of US$28.7 million during the fourth quarter of last year, compared to US$22.4 million in the fourth quarter of the previous year. The company’s fourth quarter Adjusted EBITDA of US$10.5 million for Cyprus operations nearly doubled those of the previous quarter.

The company kept $5 of every $100 put into slots in the last quarter of 2022 compared to $5.10 in 2021 bit volume was up this year from$30.5m in Q4 2021 to $38m in the fourth quarter of 2022,

Source: Cyprus can become a global tourism and entertainment destination, Cyprus-Mail, March 5, 2023

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