Recently, Sri Lanka, a country that has been "low-key" on the edge of the Indian Ocean, is gradually being targeted by a group of "special foreigners".
They come from Israel, India, Russia, Ukraine, and other places, appearing as tourists or investors, but are quietly developing a grey industrial chain locally, especially prominent in offshore gambling.
Foreign influx, visa loopholes frequent
According to recent disclosures by Sri Lankan media, more and more foreigners are obtaining one-year residence visas under the guise of "tourism", bypassing legal procedures and engaging in business activities that do not match their visas. They are not investing in high-end resorts, nor are they applying for residence as required, but are entering small restaurants, guesthouses, and even massage parlors founded by early foreign immigrants, avoiding regulatory oversight.
According to the regulations of the Sri Lanka Tourism Development Authority (SLTDA), foreigners who want to engage in the hotel, catering, and tourism industries locally must first obtain a recommendation from the SLTDA, and then get the corresponding visa issued by the immigration bureau. However, some people quickly obtain long-term visas through "non-public channels", even with the assistance of insiders in the government.
More covertly, these people mainly serve tourists from their own countries, with transactions completed through their own national payment systems, almost excluding local participation in profits. This "input consumption + output profit" model has almost turned Sri Lanka into a "grey production enclave".
Legalization of gambling: Development opportunity or regulatory blind spot?
Meanwhile, the Sri Lankan government seems to have already recognized the "potential" of the gambling industry. By the end of March 2025, Asian gambling giant **Melco Resorts** will receive a 20-year casino license from the Sri Lankan government, planning to invest 5 billion rupees (about 130 million Hong Kong dollars) to create "Melco World in Sri Lanka" in the capital Colombo.
The project, in collaboration with local major enterprise John Keells Group, is expected to open in the third quarter of 2025, adopting a "light asset operation" model, potentially bringing in annual revenue of 50 to 55 million US dollars.
Melco's entry sends a clear signal to the outside world: **Gambling can legally exist in Sri Lanka, as long as you have money, connections, and access.** It's no wonder that it is speculated that well-capitalized grey production groups may have already been laying out or even secured licenses locally.
Grey production targeting Sri Lanka is no coincidence
The main reasons why Sri Lanka has become a favored destination for grey production include:
Lax regulation: Low enforcement costs, weak legal enforcement;
Institutional loopholes: Immigration, tax, and payment systems have obvious gaps;
Strategic location: Adjacent to the Indian and Middle Eastern markets, and next to the "former Southeast Asian gambling hub" Philippines;
Many policy grey areas: While the legalization of gambling is advancing, related supporting regulations are lagging, creating large grey operational spaces.
For grey production groups that have operated in the Philippines and Cambodia, Sri Lanka offers a "familiar environment + less resistance", making it a new "gold rush" site.
China-Sri Lanka cooperation upgrade, the China factor cannot be ignored
In the face of grey production risks, China has also begun to intervene. In January 2025, the President of Sri Lanka will visit China and publicly express the desire to strengthen cooperation with China to jointly combat cross-border crimes such as telecom fraud and online gambling. China, in response, is willing to provide Sri Lanka with law enforcement equipment, judicial assistance, and capacity building.
Shortly after the visit to China, the Sri Lanka Telecommunications Regulatory Commission (TRCSL) announced: All radio frequency emitting devices must register their IMEI, otherwise, they cannot connect to the network. This measure is undoubtedly a preemptive defense against telecom fraud and illegal network operations.
However, Sri Lanka's attraction to China is not only in security cooperation but also in economic stimulation. From port development to resort investment to gambling projects, Sri Lanka is hoping to use Chinese capital to transfuse its national economy. But precisely because of this, the boundary between "legal investment" and "grey operations" has become even more blurred.
Will it become the next Philippines?
In recent years, the Philippines, due to its lax POGO (Philippine Offshore Gaming Operators) policy, has attracted a large number of grey production companies, also bearing the negative reputation of deteriorating public security and rampant money laundering. As the Philippine government strengthens regulation, many grey production groups begin to "move south" or "turn west" in search of new markets.
It is not surprising that Sri Lanka has become an alternative location. Here, the legal threshold is not high, the social environment is relatively relaxed, and the gambling system is still in a "semi-open" stage, making it a good time for experienced operation teams to layout "new positions".
Conclusion
The gambling industry in Sri Lanka is rapidly advancing in the legalization process, and "invisible grey production" is also sneaking in. This seemingly calm but deep-changing situation is both a strategic adventure and a test of the regulatory system.
Whether Sri Lanka can grasp the gambling dividends and maintain its risk defense line, whether it will become the "new Philippines", or establish a "sunny gambling" model, remains to be seen.
