November 27, Colombo (LNW): Sri Lanka is preparing for one of its most far-reaching regulatory reforms in decades as the Gambling Regulatory Authority Act, No. 17 of 2025, comes into force on December 1. The move marks a decisive state-led intervention in an industry long criticised for lax oversight, murky financial reporting, and persistent tax leakages that successive administrations failed to plug.
For years, casinos, betting centres, and online gambling operators functioned within a fragmented legal framework that enabled inconsistent monitoring and wide revenue losses. The new Gambling Regulatory Authority (GRA) consolidates the entire sector under a single, independent regulator tasked with enforcing uniform standards and closing the loopholes that allowed billions in state revenue to go uncollected.
The shift follows a special gazette issued by President Anura Kumara Dissanayake, which repealed three outdated laws that had governed the sector for decades. Under the new framework, the GRA will oversee casinos, sports betting outlets, offshore and ship-based gambling, online gaming platforms, and future Port City gaming operations. Officials say the centralisation is designed to modernise the industry and align regulation with global compliance norms.
A senior Finance Ministry official described the change as “structural reform overdue by more than two decades,” emphasising that the previous system’s fragmentation enabled “long-term, sustained revenue erosion.” The official added that the government can no longer afford to let informal practices and opaque accounting drain public finances. “The GRA will be an enforcement-driven authority, not a symbolic one,” he said.
The legislation passed Parliament without opposition rare in today’s polarised political climate—signalling consensus that the sector had operated too long without effective oversight. The authority will impose strict anti–money laundering safeguards, regulate promotions to curb irresponsible gambling, and impose mandatory social-responsibility obligations on both physical and online operators.
“For the first time, every rupee circulating in this sector will leave a regulatory footprint,” a member of the Public Finance Committee said, framing the reform as a turning point for fiscal transparency.
The timing of the overhaul coincides with Sri Lanka’s efforts to reposition itself as a luxury tourism and investment hub. The recent opening of Melco’s USD 1.2 billion City of Dreams Sri Lanka has intensified interest in Colombo’s potential to attract high-rollers from South Asia. Industry specialists argue that Sri Lanka’s ambition to emerge as “India’s Macau” hinges on the credibility of its regulatory apparatus something long viewed as inadequate.
But enforcement will be the true test. Colombo’s major casino operators Bally’s, Bellagio, Casino Marina, Ritz Club, Stardust, and the newly opened City of Dreams have for years benefited from loosely applied permits and discretionary taxes that facilitated under-reporting. Meanwhile, online gambling now estimated to represent more than half of all local betting has operated with virtually no oversight.
An Inland Revenue Department official warned that this regulatory void has cost the country tens of billions of rupees annually, noting that the core issue is “administrative failure, not revenue capacity.”
Treasury officials believe that if the GRA maintains independence and withstands political pressure, the sector could evolve into a “stable and significant fiscal contributor within two years.” With December 1 approaching, expectations are sharp. “Compliance is no longer optional,” a senior Treasury source said. “The regulator will not just supervise it will enforce. The real test begins the moment the doors open.”
