Melco segment including Sri Lanka casino posts revenue of $16.9 million
Key Facts
Melco Resorts & Entertainment's "Other Operations" segment, which includes the Sri Lanka casino and Nuwa hotel management services, generated revenue of $16.9 million in the quarter ended 30 June 2026, according to the company's earnings statement. The segment posted adjusted earnings before interest, taxes, depreciation and amortization of $3.5 million, with performance improving after the casino began operating. Revenue was $14.3 million in the quarter ended 31 March 2026. In that quarter, earnings on the same adjusted measure were $0.3 million. The positive results followed an adjusted loss of $3.9 million in the fourth quarter of 2025 for the segment combining casino operations and hotel management services.
The partnership between Melco and John Keells Holdings to develop and operate components of City of Dreams Sri Lanka dates to an announcement on 30 April 2024. Melco estimated the expected initial investment in the casino at about $125 million at the time, representing an investment in the integrated resort's gaming component. The development value of the resort as a whole exceeds $1.2 billion, according to John Keells' project launch statement. A wholly owned local Melco subsidiary obtained a government casino license, according to an investor presentation published by the Sri Lankan group. The license runs for 20 years, providing the regulatory framework for the project's gaming operations.
The resort's facilities opened in stages, starting with the Cinnamon Life hotel on 15 October 2024, according to John Keells. The hotel has 687 rooms within the project's total hotel capacity. Nuwa then opened to the public on 15 July 2025, according to Melco's earnings statement for the first quarter of 2026. The Melco-managed hotel has 113 rooms on the resort's top 5 floors, according to John Keells' investor presentation. The casino began operating on 1 August 2025, joining the hotel components that had already opened.
City of Dreams Sri Lanka has a total hotel capacity of 800 rooms and suites, according to John Keells' resort launch statement. In its annual results for fiscal 2025/26, the group said the resort recorded positive earnings before interest, taxes, depreciation and amortization for the full year. It said this followed the completion and opening of the integrated project's remaining components. In its update for the first quarter of fiscal 2026/27, it attributed growth in hotel earnings on this measure to higher occupancy and average room rates. Describing the drivers of performance, the group said "growth in hotel earnings before interest, taxes, depreciation and amortization was supported by increased occupancy and average room rates."
John Keells linked the expansion of the City of Dreams brand into Sri Lanka to growing regional tourism demand, among the drivers it identified for the project. The group expected the resort to generate more than 20,000 direct and indirect jobs when fully operational. That forecast comes against the backdrop of a government ambition to increase tourism's contribution to the Sri Lankan economy. Reuters quoted the deputy tourism minister in a report published in August 2025 as saying the sector accounted for about 4% of gross domestic product in the previous year. The official added that the government hoped this contribution would reach 10% in the future, a target tied to expanding tourism's economic role.
On future expansion of the gaming facilities, Melco kept that option open in its partnership announcement dated 30 April 2024. The company said "there is potential to expand the gaming facilities in the future, subject to performance and market conditions." It thus tied any further expansion to the course of operations and the conditions in which the business operates. On returns for the property-owning partner, John Keells said in an investor presentation that the casino lease includes a variable component linked to performance. It said this component "takes effect once operations reach a certain level of performance," tying its activation to operational progress.