Establishing the GRA: Unified Regulation and International Benchmarks

Harsha de Silva, a member of the Committee on Public Finance, confirmed that legislation for the GRA's establishment is in place, with the authority expected to be operational by mid-2026. The GRA will function as a "one-stop shop" for managing all gaming activities, encompassing licensing procedures, setting operational conditions, and enforcing penalties for violations. To build a comprehensive regulatory framework, the government will actively seek "international professional expertise" in gaming regulation, with plans to model its approach after successful jurisdictions like Singapore. This initiative seeks to effectively address the financial and social risks posed by online gambling and ensure compliance with the Financial Action Task Force (FATF)'s anti-money laundering (AML) and counter-terrorist financing (CTF) safeguards.

The Challenge of Illegal Online Gambling and Existing Market Structure

Online gambling remains illegal in Sri Lanka; however, due to a lack of enforcement, an estimated 60-70% of local patrons utilize unregulated offshore gaming platforms, creating a significant "grey area." The establishment of the GRA is intended to end this legal vacuum. Regarding land-based gambling, Sri Lanka currently has seven legal physical casinos operating, including six smaller venues and one major integrated resort—the "City of Dreams Sri Lanka" in Colombo Port City. This resort, a $1.2 billion joint venture between Melco Resorts & Entertainment and John Keells Holdings, is the largest private investment in Sri Lankan history. Its Phase II, including the casino, opened in August 2024, and is considered a key driver for tourism and economic recovery.

Fiscal Policy Adjustments: Tax Hikes for Revenue Generation

In response to the fiscal strain caused by the 2022 economic collapse, the Sri Lankan government adjusted its gaming tax policies in September 2024. The gaming tax was increased from 15% to 18%, and the entry fee for local residents was doubled from $50 to $100. This tax adjustment aims to increase government revenue to support the ongoing economic recovery. While the World Bank noted that Sri Lanka's economic recovery remains "uneven and incomplete" with projected slower growth in 2025, the government hopes that regulating the gaming industry and increasing taxation will balance revenue growth with social responsibility, protecting consumers from the dangers of unregulated gambling.

Economic Recovery, Tourism Drive, and Social Responsibility

Major integrated resorts like the "City of Dreams Sri Lanka" are expected to attract tourists from India, China, Southeast Asia, and the Middle East, ushering in a new era for Sri Lankan tourism and boosting economic recovery and job creation. Lawrence Ho, Chairman of Melco Resorts, previously stated that Colombo is to India what Macau is to China, highlighting its strategic value as the nearest tourism destination to India. Crucially, the GRA's regulatory framework will focus heavily on consumer protection and responsible gaming, aiming to mitigate gambling addiction and related social issues. This approach seeks to balance economic benefits with social responsibility, ensuring regulatory measures comply with international standards for preventing money laundering and terrorist financing.