By: Staff Writer
October 16, Colombo (LNW): Sri Lanka is losing billions in potential tax revenue as nearly 70% of the country’s gambling activity now takes place online, outside the reach of existing regulations, the Parliament Secretariat revealed yesterday. Findings presented to the Committee on Public Finance (CoPF) show that only 30–40% of casino-related operations occur in licensed physical establishments, while the vast majority of digital betting platforms remain untaxed and unregulated.
At the meeting chaired by opposition MP Dr. Harsha de Silva, the CoPF stressed the urgency of addressing this fast-growing online gambling trend, which has attracted thousands of young Sri Lankans in recent years. According to industry and cybersecurity experts, over 300,000 Sri Lankans, many between 18 and 35 years, are estimated to engage in online betting through foreign-based apps and websites each month. The total volume of wagers placed online is believed to exceed Rs. 50–60 billion annually, most of which flows out of the country through unofficial payment channels.
The committee highlighted that the State earns no tax revenue from these operations, despite the sector’s explosive growth. In contrast, Sri Lanka’s six licensed casinos, which account for less than half of total gambling activity, are subject to annual license fees and taxes under the Betting and Gaming Levy Act. “This is a massive regulatory blind spot,” Dr. de Silva warned, emphasizing that the unregulated digital gambling ecosystem not only undermines fiscal revenue but also exposes the financial system to money laundering and illicit fund transfers.
To address the issue, the CoPF has called for the immediate establishment of the Gambling Regulatory Authority (GRA), a long-delayed initiative aimed at bringing both physical and online gambling under a unified legal framework. Officials from the Finance Ministry and Inland Revenue Department informed the committee that they have agreed to operationalize the Authority by 30 June 2026, with nominations underway for a seven-member board and the appointment of a Chief Executive Officer to lead the process.
Dr. de Silva reiterated that the move is vital for Sri Lanka to meet Financial Action Task Force (FATF) compliance standards on anti–money laundering and counter-terrorism financing. “Without an independent regulatory mechanism, we risk not only losing tax income but also failing to prevent gambling-linked financial crimes,” he cautioned.
The proposed GRA is expected to introduce licensing and tax procedures for online casinos, as well as mandatory age and identity verification systems to curb underage participation. Experts say effective regulation could generate over Rs. 10–15 billion annually in additional tax revenue, while providing greater consumer protection and financial transparency.
With online betting platforms rapidly expanding among tech-savvy youth and digital payment usage soaring, the CoPF’s warning signals a critical turning point: Sri Lanka must either move swiftly to regulate the digital gambling space or continue losing vast sums—and social control—to the unmonitored online betting world.
