City of Dreams Sri Lanka records Q3 EBITDA loss
John Keells Group has reported an EBITDA loss of LKR 1.57 billion ($4.9 million) from City of Dreams Sri Lanka for the quarter ended 31 December, according to interim financial statements filed with the Colombo Stock Exchange (CSE).
The disclosure appears in the group’s Q3 FY2024/25 interim financial statements, published via the CSE and the company’s investor relations website. City of Dreams Sri Lanka is reported within John Keells’ Leisure industry group and is not disclosed as a standalone operating segment.
The LKR 1.57 billion EBITDA loss compares with a loss of LKR 241 million ($750,000) recorded in the same quarter of the previous financial year. The company attributed the result to pre-opening and early operating costs associated with the Cinnamon Life hotel, which had previously been capitalised prior to the commencement of operations.
Segment disclosure and EBITDA
Within the Leisure industry group, John Keells reported EBITDA of LKR 2.72 billion ($8.5 million) for Q3, excluding City of Dreams Sri Lanka. This compares with LKR 2.80 billion (around $8.8 million) in the prior-year quarter.
The interim filing confirms that City of Dreams Sri Lanka is aggregated into the Leisure segment rather than reported as a separate sub-segment. As a result, the casino and integrated resort project’s performance is disclosed through adjustments and reconciliations within the group’s segmental reporting.
In the notes to the financial statements and accompanying investor presentation, John Keells clarified the treatment of valuation items within EBITDA. The company stated: “Group EBITDA in Q3 2024/25 includes fair value gains on investment property, whereas the gains from investment property in the previous year were recorded in Q4. The change in the timeline of the recording of the valuation gains or losses is to streamline and enhance the Group process on closure of the financial statements. Going forward, the Group will recognise and record such valuation impacts in Q3 of each financial year.”
This accounting approach applies at group level and does not alter the classification of City of Dreams Sri Lanka within the Leisure segment.
Project structure and licensing framework
City of Dreams Sri Lanka forms part of the wider Cinnamon Life integrated development in Colombo. The project includes hotel, retail, entertainment, and gaming facilities developed by John Keells, with casino operations licensed separately.
Melco Resorts & Entertainment Ltd has disclosed that a 20-year gaming licence was granted to its subsidiary, Bluehaven Services (Private) Ltd, with effect from 1 April 2024. The licence authorises the operation of the casino at City of Dreams Sri Lanka under Sri Lanka’s national regulatory framework.
As per the company announcements, the Cinnamon Life hotel, with 687 rooms, started operations from 15 October 2024. The Nuwa hotel, with 113 rooms, and the casino facility started operations from 2 August 2025, after completion of construction activities.
Regulatory backdrop
The financial disclosure comes against a backdrop of significant regulatory changes in Sri Lanka’s gambling sector. The Gambling Regulatory Authority Act, No. 17 of 2025, took effect on 1 December 2025. The Act established the Gambling Regulatory Authority (GRA) with powers to regulate all forms of gambling, including land-based casinos, online betting, and lotteries.
Under the legislation, the GRA is responsible for licensing, compliance enforcement, and tax administration, while repealing several legacy ordinances that previously governed betting and gaming activities in the country.
In parallel, the Betting and Gaming Levy (Amendment) Act, No. 25 of 2025, was certified on 17 December 2025, and published in the Government Gazette later that month. The amendment increased the gross gaming revenue levy to eighteen percent and doubled the casino entry levy for local patrons to $100, with the revised rates applying to financial years commencing on or after 1 January 2026.
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