August 09, Colombo (LNW):Sri Lanka is experiencing significant losses in tax revenue due to the surge in the online casino market, with many young people accessing internationally regulated betting sites, according to the Ministry of Finance. The country currently does not issue licenses for any online gambling operators to function domestically, leading Sri Lankans to participate only in offshore online casinos that operate without jurisdictional restrictions.
Sports betting, now commonly offered by online casinos, falls under the broader category of gambling. At least ten internationally licensed gambling platforms, including those based on the Sri Lankan rupee, attract both local and international users.
While Sri Lanka’s legal framework permits land-based casinos, the Ministry of Finance is considering the legalization of online casinos and the establishment of a dedicated regulator, as advised by the Committee on Public Finance (CoPF) led by SJB MP Dr. Harsha de Silva. Dr. de Silva emphasized in a recent CoPF meeting that the current laws are inadequate, allowing offshore operators to function freely and resulting in lost tax revenue.
During a recent parliamentary session, officials from the Ministry of Finance and the Central Bank supported the idea of creating a specialized regulator to address the challenges in the gambling sector. In an effort to better manage the casino industry, Sri Lanka has amended its casino licensing regulations, introducing minimum investment thresholds and updated fee structures.
These changes, effective January 1, 2024, reflect a shift in the country’s approach to integrated development projects, following the submission of ten casino applications.The revised regulations aim to mitigate the social and economic impacts of gambling, such as addiction and financial overextension. Under the new rules, applicants for casino licenses within integrated developments must meet government-set minimum investment requirements.
Projects with an investment of at least $250 million are required to pay a casino license fee and a renewal fee of $31 million. For investments exceeding $500 million, the casino license fee is $15.5 million, with the same renewal fee of $31 million.
In 2023, Sri Lanka’s Cabinet of Ministers approved the creation of a Gambling Regulatory Authority to oversee the gambling industry and ensure proper tax collection. However, CoPF recently expressed concerns over delays in establishing this regulator. The director-general of fiscal policy has been summoned to provide details on both physical and online casinos, including the tax revenues generated.It was revealed that although the law prohibits online casinos, they continue to operate openly, depriving the country of significant revenue. Players using foreign online gambling sites in Sri Lanka face no legal consequences, and the government does not restrict access to these platforms. Additionally, no online gambling websites offer services in Sri Lanka’s official languages, Sinhala and Tamil
