Melco’s €600 million casino-resort investment in Cyprus is failing to deliver expected revenues, with the City of Dreams Mediterranean recording lower-than-expected turnover and the company’s New York stock performance weakening, according to a risk analysis report submitted to Parliament.
The findings, which raise concerns about Melco’s long-term commercial strategy in Cyprus, are contained in a risk analysis and management report accompanying the Gaming and Casino Supervision Authority’s budget, which will be discussed at the Parliamentary Finance Committee on Monday.
The report warns that the failure to meet projections creates strategic risks for covering the casino’s operational obligations, with indirect but significant impacts on the Gaming Authority’s revenues and mission.
It adds that the possibility of Melco withdrawing or revising its commitment carries economic, social and institutional risks for the casino-resort operating model and the authority’s regulatory role.
Melco has held the exclusive licence to operate a casino resort and satellite casinos since 2017 for a 15-year period. The company invested over €600 million to build the Limassol resort, but faced obstacles from the Covid pandemic and Middle East conflicts.
The drop in Melco’s turnover and potential loss of monopoly status constitute serious strategic threats, according to the risk analysis.
Competition from casino resorts in Greece’s Hellinikon and the United Arab Emirates is expected to worsen local market performance, with these resorts anticipated to offer attractive options to international and regional high-spending audiences.
Whilst the Gaming Authority faces no direct competition in land-based casinos in Cyprus, it must prepare for possible pressures to liberalise the market or changes to the current monopoly model, the report states.
The threat of indirect new entries is high due to illegal online providers operating via the internet and advertising on platforms outside Cyprus.
Gaming facilities in the occupied areas pose a direct physical competitor on both pricing and tourist attractiveness, with the increased presence of illegal online providers and casinos in occupied territories limiting the effectiveness of regulatory supervision, according to the report.
The authority is strengthening its institutional operation as a data-driven and proactive regulator, implementing an integrated risk management model adapted to national and global realities.
The 2026-2029 period is shaping up as one of intense fluidity, during which the authority must balance increased demands, new technological capabilities and intensifying risks.
The Gaming Authority’s 2026 budget is balanced at €3.6 million in revenues and expenditures.