The gambling industry in Sri Lanka has always been under a cloud of suspicion with little or no effective and transparent regulatory process to hold them accountable. Many Sri Lankans view the gambling industry with distrust and contempt; however consecutive governments and economic experts have been of the view that the industry, if properly regulated, can help Sri Lanka attract a high spending category of tourist. Today, with a new Government in office with a mandate for accountability and transparency, the public expect such ‘gray-sectors’ to be held accountable, and a light shown on their operations.
Sri Lanka’s latest gambling reforms bring a promise of modernisation and economic gains, but concerns have been raised that the new Gambling Regulatory Authority Bill of 2025 falls short on crucial fronts. The bill, while aiming to replace outdated laws and unify oversight, leaves operational controls vague and enforcement mechanisms weak, raising fears it may open the door to unchecked online gambling and risky junket operations.
The concerns are real and serious. A recent report by the United Nations Office on Drugs and Crime (UNODC) referred to weakly regulated casino and junket operations in neighbouring Southeast Asia as “the casino industry, and related money laundering, and has been led in part by casino and junket operators who have effectively become bankers for organized crime. At the same time, many casinos and connected businesses like junkets have physically relocated into autonomous areas and Special Economic Zones or SEZs across the region that, in some instances, have become safe havens and breeding grounds for criminal networks”. The UNODC also flagged concerns about another type of gambling, one which is rapidly growing in Sri Lanka and is alarmingly closely linked to national sports bodies and sporting events. “Online casinos and cyberfraud have also recently mushroomed across Southeast Asia, particularly in the Mekong since the onset of the Covid-19 pandemic. Alarmingly, organised crime groups running many of these operations have done so with growing sophistication, through the use of data mining and processing, blockchain technology and, increasingly, generative artificial intelligence”.
In Colombo’s policymaking circles, some have expressed concerns about the Bill’s limited scope regarding operational regulations. Committee on Public Finance (COPF) Chairperson 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 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, raising concern amongst law enforcement and security agencies on how to monitor them and enforce laws in the backdrop of the situation in Southeast Asia. Many in the bureaucracy responsible for oversight and regulation of the industry shy away from responding to any questions regarding it and the State’s control of it.
Some economists and local think tanks have urged the Government to review the new Bill and to improve it, filling critical gaps which can be exploited by criminal elements, and miscreants. Colombo-based 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. They also highlight 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.
If the National People’s Power (NPP) Government is serious about long-term anti-corruption, rule of law and improving economic inequality, a revisit of the proposed Gambling Regulatory Bill would fit in with its mandate, and the country would be better for it, with better legislation for the future.