In Sri Lanka, a staggering 60–70% of gambling activities have transitioned to online platforms, posing significant challenges for the country’s tax and regulatory systems. This shift was highlighted in a report presented to the Committee on Public Finance (CoPF), urging immediate governmental action.
CoPF Chairman Dr. Harsha de Silva stressed the urgency of constructing a regulatory framework that encompasses both online and offline gambling sectors to recuperate lost tax revenues. He noted that only 30–40% of gamblers frequent physical casinos, a stark decrease necessitating this regulatory evolution.
The Sri Lankan government is fast-tracking the establishment of the Gambling Regulatory Authority (GRA), slated to be operational by June 30, 2026. This new body will spearhead the oversight of gambling activities, grant licenses, and ensure tax collection. The GRA will be governed by a seven-member board responsible for appointing a Chief Executive Officer.
Dr. de Silva emphasized the importance of effective regulation to align with the Financial Action Task Force (FATF) standards, particularly concerning anti-money laundering and counter-terrorism financing. Despite the fact that none of the six licensed casinos in Sri Lanka are authorized to operate online, unlicensed digital gambling platforms continue to thrive, remaining untaxed.
The regulatory move follows the enactment of the Gambling Regulatory Authority Act, No. 17 of 2025, which seeks to unify all gambling laws under a singular, comprehensive framework. This act supersedes previous regulations like the Betting on Horse-Racing Ordinance, Gaming Ordinance, and Casino Business (Regulation) Act, aiming to streamline physical and online gambling regulations.
As the central licensing and enforcement entity, the GRA will regulate all gambling activities, collect taxes, and promote responsible gambling practices. Prominent casino operators such as Bally’s, Bellagio, Casino Marina, and Stardust, which have operated under provisional licenses since 2013, will now fall under the direct oversight of the GRA.
The GRA is vested with the authority to delineate permissible gambling activities, issue and revoke licenses, and collaborate with the Financial Intelligence Unit and law enforcement to combat money laundering. The board comprises senior state officials, including the Finance Secretary, Commissioner General of Inland Revenue, Head of the Financial Intelligence Unit, and Inspector General of Police, supplemented by three Finance Minister appointees.
In tandem with regulatory reforms, the government has implemented new fiscal policies. Notably, casino entry fees for Sri Lankan residents have doubled, and the gross gambling revenue tax has escalated from 15% to 18%. The GRA’s mandate includes ensuring adherence to these fiscal measures, thereby reclaiming revenue lost to unregulated online gambling platforms.
Deputy Minister of Economic Development Dr. Anil Jayantha Fernando underscored that the Authority’s focus remains firmly on regulation rather than expansion. “The intention isn’t to issue new licenses,” he clarified. “Our objective is to ensure existing gambling operations are adequately supervised and compliant.”
The GRA is also tasked with evaluating the social and cultural ramifications of gambling, striving for a delicate balance between economic growth and societal well-being. The establishment of the GRA constitutes a pivotal moment for Sri Lanka’s gambling industry, as it seeks to consolidate oversight and incorporate online operations into the formal economic system. The overarching goal is to enhance revenue, ensure transparency, and align with international regulatory benchmarks.
Dr. Fernando summarized the reform efforts, stating, “This Act consolidates all gambling activities under a single law and authority, ensuring fairness, accountability, and transparency across the sector.”
This strategic overhaul is met with different perspectives within the industry. Some stakeholders express concerns over the rapid pace of regulatory changes and the potential impact on business operations. While the intention is clear to protect public interest and enhance state revenue, there are voices cautioning against stifling innovation and market agility.
Economists and industry experts suggest that while regulation is crucial, it should be balanced with market dynamics that allow for competitive growth. There is an understanding that a well-regulated market can foster trust and attract international investments, but this must be achieved without compromising the entrepreneurial spirit that drives the industry forward.
As Sri Lanka navigates this transformation in its gambling landscape, it faces the dual challenge of ensuring robust regulation and fostering an environment conducive to sustainable growth. The unfolding regulatory framework will play a decisive role in shaping the future of gambling in the country, impacting stakeholders across the board and setting the stage for a new era of accountability and prosperity.
Sarah Thompson is a seasoned writer specializing in casino gaming and online gambling. With over a decade of experience in the industry, Sarah brings in-depth knowledge and a keen eye for detail to her work at CasinoNoDeposits.com. Her expertise lies in uncovering the latest no deposit bonuses and providing comprehensive reviews of online casinos. Passionate about helping players maximize their gaming experience, Sarah combines her analytical skills with a flair for engaging storytelling.
4/5Win Vegas Plus Casino
€10 FREE
