Sri Lanka’s latest gambling reforms promise modernisation and economic gains, but concerns have been raised that the new Gambling Regulatory Authority Bill of 2025 falls short on crucial fronts. While aiming to replace outdated laws and unify oversight, the bill leaves operational controls vague and enforcement mechanisms weak, raising fears it may open the door to unchecked online gambling and risky junket operations.
The Gambling Regulatory Authority Bill of 2025 was presented for its first reading in Parliament on 17 June. This bill proposes the establishment of a dedicated Gambling Regulatory Authority (GRA) tasked with overseeing and regulating the country’s gaming industry.
It seeks to repeal three existing, outdated laws – the Betting on Horse-Racing Ordinance (Chapter 44), the Gaming Ordinance (Chapter 46), and the Casino Business (Regulation) Act No.17 of 2010 – and replace them with a unified, modern regulatory framework.
If enacted, the law will apply to all gambling activities in Sri Lanka, excluding lotteries conducted by the Development Lotteries Board and the National Lotteries Board, as well as social gambling.
The bill outlines several objectives: to regulate and control gambling operations; ensure effective revenue collection; promote transparency, good governance, and public confidence; foster tourism and economic development; and implement responsible gambling practices. It also prioritises preventing crime, social harm, and money laundering within the gambling sector, while protecting children and vulnerable persons from gambling-related risks.
The proposed GRA would be established as a corporate body with wide-ranging powers, including issuing, renewing, and cancelling gambling licences; inspecting and rating gambling premises; regulating online and land-based gambling; and enforcing anti-money laundering and counter-terrorism financing measures.
The authority would be empowered to conduct investigations, collaborate with law enforcement agencies, and supervise the operational standards of licensed operators.
At this stage, the bill has only undergone its first reading in Parliament and is yet to be debated or enacted into law. Its subsequent progress through the legislative process will determine when and in what form these proposed regulatory reforms will come into effect.
A missing link?
Despite these advances, voices from within policymaking circles have expressed concerns about the bill’s limited scope regarding operational regulations. Committee on Public Finance (COPF) Chairman Dr. Harsha de Silva highlighted a critical gap: the bill establishes the regulator but lacks comprehensive provisions to govern how gambling operations themselves should be conducted, monitored, and controlled.
“This stands in contrast to models like Singapore’s, where detailed legislation governs both the regulator and casino operations separately,” Dr. de Silva observed. He further warned that the Government’s apparent intention to legalise junket operations without robust oversight could exacerbate risks related to financial crime and regulatory evasion.
Meanwhile, online gambling remains largely untaxed and unregulated under the current proposals, creating potential loopholes.
Calls to withdraw and redraft
Advocata Institute has called on the Government to withdraw and redraft the proposed Gambling Regulatory Authority Bill due to serious concerns over the excessive powers granted to the Minister of Finance.
It argues that this centralisation threatens the independence and credibility of the regulator, risking political interference and undermining industry integrity. Advocata recommends that board appointments be approved by the Constitutional Council, the director general be selected through a competitive process, and that rulemaking powers rest with the authority itself, following models like the Securities and Exchange Commission.
It points out that the bill also has other critical shortcomings, including the absence of tourism sector representation, exemptions for State-run lotteries, lack of provisions for regulating online gambling, weak mechanisms to oversee operator revenues and tax compliance, and inadequate penalties for violations.
Advocata has urged a comprehensive public consultation and expert review to create a truly independent, empowered, and effective gambling regulator in Sri Lanka.
Singapore: A regional benchmark
While Sri Lanka’s gambling laws are alleged to have notable gaps, Singapore’s Casino Control Act (CCA) and its subsidiary regulations provide a comprehensive framework that covers licensing, internal controls, surveillance, anti-money laundering, and counter-terrorism financing compliance, as well as strict licensing for junket operators.
Under the CCA, only entities meeting stringent ‘fit and proper’ criteria are granted casino licences. Casinos are required to maintain detailed internal procedures – covering accounting, chip security, surveillance, and patron data management – approved by Singapore’s Gambling Regulatory Authority and subject to regular audits.
Continuous 24/7 video surveillance of gaming and financial transaction areas, strict customer due diligence for significant transactions, and mandatory reporting of suspicious activities bolster Singapore’s anti-crime efforts. Junket operations, which facilitate high-roller patronage, are licensed separately with strict compliance requirements, reflecting lessons learnt from regional vulnerabilities.
Singapore’s regulatory framework is enforced robustly, with authorities empowered to conduct surprise inspections, review operational records, and impose sanctions for breaches. This integrated system has earned international recognition for maintaining financial integrity and public confidence.
Economic gamble questioned
Amid these developments, concerns have been raised by academics about the social and ethical implications of expanding gambling operations in Sri Lanka.
University of Peradeniya (UOP) Department of Economics and Statistics Professor Ananda Jayawickreme offered a cautionary perspective, stressing the need to weigh economic incentives against the country’s cultural values and long-term social well-being.
Addressing the legal status of gambling in the country, Prof. Jayawickreme remarked: “According to the normal laws of the country, this kind of casino and any other form of betting and gambling are illegal; the culture of the country is not supportive of it either.” He noted that objections from religious institutions and societal groups had long influenced public attitudes towards gambling.
While Sri Lanka currently has licensed gambling operators, he pointed out that these operated on a very small scale, adding that expanding casino operations, especially within investment promotion zones, would “take time and create some difficulties within the country”.
On the economic potential of gambling, Prof. Jayawickreme offered a nuanced perspective: “Gambling is good for people who are wealthy, who feel like gambling and want to make quick money. But wealthy people are only a small segment of the population.” He further emphasised that much of the money generated from gambling exited the country, suggesting that the practice may not significantly contribute to long-term economic growth.
Addressing tourism, a key rationale behind promoting casinos, Prof. Jayawickreme questioned their necessity. “Sri Lanka has potential as a tourism destination,” he acknowledged, “but gambling is only a small part of it.” Instead, he urged authorities to focus on cultural and socially-oriented promotion of tourism, citing opportunities in recreation, wildlife tourism, and heritage tourism.
He stressed: “We need to think about whether this is something that we should do, culturally and socially. If you want to make money, you can do many illegal and immoral things, not only gambling – even prostitution, for instance. But as a country, we are not doing that.”
Prof. Jayawickreme emphasised sustainable and culturally sensitive development, noting: “Rather than focusing on prostitution and gambling, we should promote tourism based on heritage and natural beauty. These are long-lasting and positive sources of income and international respect.”
Unanswered questions
As debate continues over regulatory reforms and new investments in Sri Lanka’s gambling sector, Board of Investment (BOI) Director General Renuka Weerakoon clarified the institution’s limited role in the process, explaining that the responsibility for drafting laws and regulations rested with the Finance Ministry.
“The BOI doesn’t look into drafting laws that should be done by the Finance Ministry,” she said, adding that to her knowledge, draft regulations for casino operations existed.
When asked about the status of new investments in the sector, Weerakoon noted that only two casino-related investments were currently under the BOI’s purview.
Meanwhile, despite being contacted by The Sunday Morning, no response was provided by Justice Ministry Secretary Ayesha Jinasena by the time this edition went to press.
Multiple attempts to contact Justice Minister Harshana Nanayakkara were also unsuccessful. Justice Ministry Additional Secretary Piyumanthi Pieris said she was busy and unable to comment.
Meanwhile, several attempts to contact officials at the Fiscal Policy Department of the Ministry of Finance and Finance Ministry Secretary Harshana Suriyapperuma also proved futile.
Recently, Sri Lanka has overhauled casino taxation to enhance State revenues. Previously, only income tax was levied; today’s regime imposes a Rs. 500 million licence fee, an equal annual renewal fee, and a 15% turnover tax. The fee structure spans Rs. 500 million for the initial five years and Rs. 1.5 billion for the subsequent 15 years.
Currently, four casino owners operate six licences under this revised regime, marking a more assertive fiscal stance by the Government.