The Republic of Sri Lanka plans to officially establish the Gambling Regulatory Authority (GRA) on June 30, 2026, to uniformly manage all gambling activities except for lotteries and social games, aiming to address the regulatory challenges where online gambling is illegal yet prevalent. Currently, Sri Lanka has seven legal entity casinos in operation, including a comprehensive resort "Dream City Sri Lanka," but 60-70% of local gamblers use unregulated offshore platforms. Public Finance Committee member Harsha de Silva stated that the legislation is in place, and detailed regulations need to be formulated to clarify licensing procedures, operating conditions, and penalties for violations. The government will draw on Singapore's experience to seek international expertise, while raising the gambling tax to 18% and doubling the local entry fee to $100, to increase fiscal revenue and protect consumers.
Establishment and Functions of the Regulatory Authority
Sri Lanka plans to officially establish the Gambling Regulatory Authority (GRA) on June 30, 2026, which will serve as a "one-stop service agency" to uniformly manage all gambling activities except for lotteries and social games. Public Finance Committee member Harsha de Silva stated that the legislation for establishing this agency is already in place.
Currently, detailed regulations need to be formulated to clarify licensing procedures, operating conditions, and penalties for violations, ensuring the agency operates normally.
Current Status and Challenges of Online Gambling
Online gambling is illegal in Sri Lanka, but currently, 60-70% of local gamblers use unregulated offshore gambling platforms. de Silva mentioned that online gambling has become a "major gray area," posing financial and social risks.
This legal vacuum has persisted for many years, and the Global Financial Action Task Force will review Sri Lanka's anti-money laundering and anti-terrorism financing safeguards.
Existing Casinos and Integrated Resorts
Sri Lanka currently has seven legal entity casinos in operation, including six small casinos and one integrated resort. The "Dream City Sri Lanka" integrated resort located in Colombo Port City opened its first phase in October 2023, and the second phase including a casino is set to open in August 2024.
The resort is a joint venture between Melco Resorts & Entertainment and John Keells Holdings, with an investment of $1.2 billion, making it the largest private investment project in Sri Lanka's history.
Tax Policy Adjustments and Impact
In September 2024, Sri Lanka will raise the gambling tax from 15% to 18%, and double the local resident entry fee from $50 to $100. The increase in taxes aims to fill the government funding shortfall caused by the economic collapse in 2022.
The World Bank noted that Sri Lanka's economic recovery remains "uneven and incomplete," with economic growth expected to slow from 5% in 2024 to 4.6% in 2025.
Regulatory Framework and International Reference
GRA will establish a comprehensive regulatory framework, clarifying licensing procedures, operating standards, and penalties for violations. The government plans to seek "international expertise" in the field of gambling regulation and model after Singapore's regulatory approach.
The law firm Tiruchelvam Associates stated that GRA will become a one-stop agency managing all gambling activities, except for lotteries and social games.
Tourism Development and Economic Impact
"Dream City Sri Lanka" integrated resort features two hotels, a 16,700 square meter gambling area, and conference facilities, expected to attract tourists from India, China, Southeast Asia, and the Middle East. Melco Resorts & Entertainment Chairman Lawrence Ho stated that Sri Lanka is to India what Macau is to China, with Colombo being the closest tourist destination to India.
The resort is seen as a symbol of a new era in Sri Lanka's tourism industry, expected to boost economic recovery and job growth.
Consumer Protection and Risk Management
The regulatory authority focuses on consumer protection and risk management, aiming to safeguard government tax revenue while protecting consumers from the risks of unregulated gambling. de Silva emphasized the need to balance fiscal revenue with social responsibility.
Regulatory measures will include safeguards against money laundering and terrorism financing, in line with international standards.
Economic Background and Recovery Challenges
Sri Lanka experienced an economic collapse in 2022, with the government declaring bankruptcy and defaulting on its debt for the first time, leading to widespread protests and the resignation of the former president. World Bank Sri Lanka Director David Sislen stated that private sector investment and job creation are needed to promote recovery.
Economic growth is expected to slow down, potentially dropping to 3.5% by 2026, with recovery processes facing challenges.
Implementation Timeline and Expected Effects
GRA plans to officially commence operations by June 30, 2026, currently in the stage of formulating regulations. After the establishment of the regulatory agency, it is expected to reduce illegal gambling activities, increase government revenue, and provide better consumer protection.
The long-term effects depend on the enforcement strength of the regulations and the level of international cooperation.
Social Impact and Responsibility Balancing
The regulatory framework considers social impacts and responsibility balancing requirements, aiming to reduce gambling addiction and related social issues. The government hopes to reduce the financial and social risks brought by illegal gambling through regulatory measures.
Balancing economic benefits with social responsibility is a major challenge faced by the regulatory agency.
