By: Staff Writer
April 01, Colombo (LNW): Sri Lanka is expediting the establishment of a Casino Regulatory Authority aimed at addressing key issues like online gambling, tax evasion, and money laundering. A senior official from the Finance Ministry highlighted that the regulation would provide clearer operational guidelines and improve transparency in revenue collection.
The proposed regulatory body is set to oversee the licensing process, monitor financial transactions, and enforce consumer protection measures aligned with international standards. The authority’s key objective is to promote responsible gambling practices and curb illegal activities such as money laundering and underage gambling. The regulation will introduce stricter monitoring and compliance measures to ensure the industry operates within legal frameworks.
The growth of Sri Lanka’s gambling sector has been rapid, with the market projected to reach US $410.04 million by 2026, up from $293.93 million in 2020. This represents a compound annual growth rate of 5.24%. By 2024, the market was expected to reach around $376 million, with projections for a growth of $396 million by 2025. This expansion is driven by political stability, enhanced infrastructure, rising disposable incomes, and an increasing interest in online gaming.
Despite this growth, the absence of a dedicated regulatory body has made it difficult to properly regulate online casinos and ensure proper taxation. Recently, the Committee for Public Finance (COPF), headed by MP Dr. Harasha De Silva, raised concerns over the Inland Revenue Department’s (IRD) inability to regulate online gambling platforms, with initial claims denying their existence in Sri Lanka. However, investigations later confirmed the operation of these platforms, particularly those dealing with cryptocurrencies.
Another significant concern has been the rise of offshore gambling networks. As regulations tighten in other regions, many offshore gambling operators have shifted their operations to Sri Lanka. These operators, who often run call centers and use agents, have been targeting Indian gamblers. Popular international platforms such as 888casino, 22Bet, and Spin Casino have gained traction, particularly among Sri Lanka’s youth. Joint ventures between foreign and local companies are also expected to further boost market growth.
In response to these challenges, Sri Lanka has implemented significant tax reforms in its 2025 budget, aiming to close regulatory gaps. Key provisions include an 18% tax on casino gross revenues and an increase in entry fees from $50 to $100 per person. These measures are expected to generate additional tax revenue from the gaming sector.
Further regulations to strengthen oversight include stringent compliance policies introduced in 2023 to monitor financial transactions and reduce money laundering risks. Gambling operators also face higher taxes, leading to increased operating costs. While online gambling remains legally ambiguous, the government is considering formal regulations for this segment.
Looking ahead, as Sri Lanka’s economy stabilizes, the gambling industry is poised to become a significant contributor to national revenues. In the coming years, the sector can expect:
Increased casino licensing due to a more regulated environment that could attract foreign operators.
Potential legalization and regulation of online gambling.
Enhanced consumer protections through new laws promoting responsible gambling.
With the establishment of an independent regulatory body, Sri Lanka aims to address criminal gambling activity while maximizing the economic benefits of the gambling industry. The evolving policies will foster a safer, more regulated gambling environment, balancing economic growth with social responsibility.
