Billionaire James Packer is expected to walk away from a plan to build a $US400 million ($496 million) casino and hotel in Sri Lanka after the island nation elected a new president, Maithripala Sirisena, who has promised to block the project.

Mr Sirisena, who is described as a social conservative, defected from the ruling party in November after previously serving under former president Mahinda Rajapaksa as health minister. The manifesto released by his new party, the New Democratic Front, promised to "disallow" licences for casinos proposed by Mr Packer's Crown Resorts and local developer John Keells Holdings.

Crown's plans progressed rapidly throughout 2013, but stalled in the past year because of opposition from Buddhist leaders, backlash against tax concessions proposed for the project and the recent election campaign.
Crown’s plans progressed rapidly throughout 2013, but stalled in the past year because of opposition from Buddhist leaders. Photo: Rob Homer
With a local joint-venture partner, Crown had proposed the development of a resort with a 400-room hotel with shopping, entertainment and convention facilities.

Media reports have said Mr Sirisena would cancel casino licences given to Crown and John Keells, butfor Crown there is nothing for him to cancel.
In December 2013, the government approved the project without giving express permission for a casino. However, politicians said they would not stop Crown's partner, local entrepreneur Ravi Wijeratne who had links to the president, from transferring a licence from one of his already-operating casinos.

One analyst, who declined to be named, said such a scenario would have been extremely risky for Crown. "To commit any money to a developing country like Sri Lanka, Crown would need regulatory certainty, tax breaks and full licence for a casino," the analyst said. "They're not in the business of running hotels for the sake of it."
Crown had also been granted tax concessions that a local opponent of the project, United National Party member Harsha de Silva, said would cost Sri Lanka $1 billion during 10 years.

The analyst said even before the election, the feeling among Crown's investors was that the Sri Lanka project would not go ahead. "I don't think investors thought, and certainly Crown wasn't selling the idea that this was going to go ahead," the analyst said.

A Crown spokesman declined to comment. In an August company presentation, Crown said the planned casino resort was projected to open in 2018 with a total project cost of $US400 million.
Even if Crown walked away from the project, it still has plenty of development work on its agenda.
The $9 billion company is nearing the final stages of a bid, against rival Echo Entertainment Group, to build a new casino and entertainment complex on prime riverfront land in the Brisbane central business district.

A $500 million project to construct a new car park and hotel at its Perth casino will be completed in 2016. It plans to build a $1.5 billion high-rise casino in Sydney's Barangaroo waterfront development precinct, and recently said it would build a new five-star hotel at its Melbourne casino.
The stock has lost 28 per cent in the past 12 months on account of its joint venture Melco Crown battling declining gambling activity in Macau. The share price had gained 1.2 per cent to $12.29 in trading at 3.17pm AEDST on Friday.

Sydney Morning Herald