Sri Lanka unveils $1 billion City of Dreams casino in Colombo as Las Vegas reports tourist slump

Sri Lanka opened a $1 billion integrated casino resort in Colombo last month, with the government portraying the development as a major push to boost tourism as traditional gambling centres such as Las Vegas face sagging international visitor numbers.

The City of Dreams complex in the capital includes about 800 hotel rooms, roughly 20 restaurants and bars, and a luxury shopping mall, according to the developer. The inauguration featured high-profile entertainment, drawing attention to the new facility as a regional leisure destination.

President Anura Kumara Dissanayake said the resort’s opening marked “the start of a new era” for Sri Lanka and its tourism industry. The project adds to several smaller casinos already operating on the island and represents a significant private and public bet on expanding higher-end visitor services.

The development has drawn mixed local reaction. Some residents and civic groups have expressed concerns about social impacts and the appropriateness of large-scale gambling investment in predominantly Buddhist Sri Lanka. Tour operators and industry specialists who organise travel to South Asia said they did not expect the resort to materially alter the island’s broader tourism appeal.

"While casino expansion isn’t aligned with our preferences, it doesn’t concern us at the moment, given the vast majority of the island remains beautifully pristine, authentic, and incredibly welcoming to visitors," said Cherylle Sargent of Red Dot Tours, a company that specialises in travel throughout South Asia. Harji Singh, who arranges high-end tours to India and Sri Lanka, said casinos tend to operate in confined spaces and added, "We don’t expect it to have an adverse impact on our clients. On the other hand, it will bring in more visitors to the country, who may also travel around and see a bit of this beautiful island."

The opening in Colombo comes as Las Vegas, long seen as the world’s pre-eminent casino city, reports a decline in international tourists and pressure on its hospitality sector. The Las Vegas Convention and Visitors Authority said international visitation was essentially flat while visits from Canada — previously the city’s largest international market — have dropped by more than 20 percent.

"Some of the decisions our administration has made around international relations [have] caused a drop in tourism," Steve Hill, president of the Las Vegas Convention and Visitors Authority, told KTNV. He said the decline from Canada has not yet been fully offset and expressed cautious optimism that conditions could improve over several months. In a separate interview, Hill told Fox News he expected Las Vegas tourism and the local economy to be in a "much better place" within about six months.

Observers and industry participants say multiple factors appear to be reshaping gambling and travel patterns. Some analysts point to shifting consumer behaviour: younger adults increasingly use online betting platforms and digital entertainment, reducing the draw of traditional casino floors. "Another differentiator is that older generations focused on real-life interaction — while younger generations feel just as content with para-social online experiences," commentator Robby Starbuck said in an interview, noting a generational shift away from typical Las Vegas attractions such as slot machines and show-based marketing.

Operators and workers in Las Vegas report tangible effects. Steakhouse hostess Gloria Valdez, who has worked in the city for 15 years, told Time magazine that the sector has not fully recovered from the pandemic and that business remains uncertain. "The pandemic was something that was worldwide, and we had the hope that everything would get better. We're not sure if and when this is gonna stop," she said.

Industry executives in Sri Lanka and Southeast Asia say the new Colombo resort is intended to diversify visitor sources and to capture higher-spending tourists who might otherwise travel to other regional gambling hubs. The developer has marketed the property as an integrated resort combining hospitality, retail and entertainment, a model that has gained traction across Asia in markets that permit large-scale gaming.

Regulatory frameworks and social attitudes toward gambling vary across the region, and local governments have navigated competing pressures to attract foreign exchange while responding to domestic critics. In Sri Lanka, authorities have promoted the resort as a means to stimulate post-crisis economic recovery and to create jobs in hospitality and retail.

The broader outlook for global casino and resort operators will depend on how quickly international travel rebounds, the pace of adoption of online gaming among different age groups, and how national policies on trade and travel influence cross-border visitation. For Colombo, the City of Dreams opening signals an aggressive push into a segment of tourism that industry backers say could yield higher spending per visitor; for Las Vegas, current policymakers and business leaders are framing recent softness in visitation as a challenge to be managed amid longer-term structural shifts in travel and entertainment preferences.