Sri Lanka’s Gambling Regulatory Authority (GRA) is poised to commence operations by 30 June 2026. Harsha de Silva, a member of the Committee on Public Finance, confirmed that the legislative groundwork for the authority is already established. The next crucial step involves formulating the specific regulations that will enable the authority to function effectively.
De Silva explained that these regulations will lay out the procedures for licensing, set the conditions under which gambling enterprises can operate, and outline penalties for those who fail to comply. The primary goals are to secure government tax revenues and shield consumers from the dangers posed by unregulated gambling activities.
According to Tiruchelvam Associates, a prominent law firm, the GRA is envisioned as a comprehensive regulatory body overseeing all forms of gambling, with the exception of lotteries and social games. The government is keen on drawing lessons from international best practices and is particularly interested in emulating Singapore’s regulatory framework, as de Silva highlighted.
Currently, Sri Lanka faces a significant challenge with online gambling, which remains illegal but is widely practiced. Lanka News reports that between 60% and 70% of local gamblers participate in unregulated offshore betting platforms. De Silva described online gambling as a “major grey area” that needs urgent regulation due to the accompanying financial and social risks. Despite years of debate on this issue, progress has been slow, he conceded.
He further noted the importance of setting up robust anti-money laundering and counter-terrorism financing measures, which will be subject to review by the global Financial Action Task Force once implemented.
Sri Lanka currently licenses seven land-based casinos, consisting of six smaller gaming venues and one integrated resort, City of Dreams Sri Lanka. This resort, a collaboration between John Keells Holdings and Melco Resorts & Entertainment, saw the completion of its first phase last October in Colombo Port City, with the second phase, including the casino, opening in August.
City of Dreams stands as a beacon of investment and potential for the country, with its two hotel towers, a vast gaming space, and a variety of non-gaming amenities. The $1.2 billion investment marks the largest private capital infusion in Sri Lanka’s history. It is strategically positioned to attract visitors from regions such as India, China, Southeast Asia, and the Middle East, all within a short flight from Colombo.
Melco’s Chairman and CEO Lawrence Ho declared at the casino’s opening that the project symbolizes Sri Lanka’s potential to evolve into a major global travel destination. He likened Colombo’s potential for India to what Macau represents for China, emphasizing the strategic advantage of being the closest international gaming hub to India.
In a bid to strengthen its fiscal position, Sri Lanka has recently increased its gaming tax from 15% to 18% and doubled the entry fee for local residents from $50 to $100. These fiscal measures are part of the broader strategy to replenish government finances, which were severely affected by the economic downturn of 2022. That crisis led to Sri Lanka declaring bankruptcy and defaulting on its debt, which in turn sparked widespread protests and the resignation of then-president Gotabaya Rajapaksa.
A World Bank analysis dated 7 October underscored that Sri Lanka’s economic recovery is progressing, albeit unevenly. The nation faces the challenge of fostering a more equitable economy where private investment plays a crucial role in job creation and efficient allocation of public resources. David Sislen, the World Bank’s division director for Sri Lanka, stressed the importance of these factors for sustainable economic growth.
The World Bank forecasts a deceleration in economic growth, with projections indicating a reduction to 4.6% in 2025 and further to 3.5% in 2026, following a 5% growth rate anticipated in 2024.
While these developments present a hopeful trajectory for Sri Lanka, challenges remain. Some critics argue that increased taxation on gaming could deter potential investors and players, potentially stifling the growth of this nascent industry. Furthermore, there is a call for a balanced approach that considers both economic objectives and the social implications of expanding the gambling sector.
As Sri Lanka navigates this complex landscape, the successful implementation of the GRA will be pivotal. It is anticipated that a well-regulated environment could enhance investor confidence, generate substantial government revenue, and offer a protective framework for consumers. Balancing these elements will be key to ensuring that the burgeoning gaming industry contributes positively to the nation’s economy while safeguarding societal interests.
Topics: Singapore · India · China · Macau · Licensing · Gambling Taxes
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