Sri Lanka is set to launch its highly anticipated Gambling Regulatory Authority (GRA) by June 2026. The establishment of this regulatory body is a crucial step in modernizing the country’s gambling sector, which has long struggled with a lack of comprehensive regulation. Dr. Harsha de Silva, Chairman of the Committee on Public Finance (COPF), confirmed that while the legislation to establish the authority is already in place, the next phase will involve drafting the necessary regulations to make it fully operational. “What we now need are the detailed regulations that will make it operational,” Dr. de Silva explained, highlighting the importance of this next step to ensure compliance with international standards.
The GRA will oversee both land-based casinos and online gambling platforms, unifying the regulatory and licensing framework for the industry. Dr. de Silva emphasized the need for robust regulations that address key issues such as licensing procedures, penalties for non-compliance, and consumer protection, all while safeguarding the government’s tax revenue. “We need to safeguard the Government’s tax revenue while also protecting consumers from the risks of unregulated gambling,” he said.
Addressing the Online Gambling Sector
A major challenge the GRA will face is regulating the rapidly growing online gambling sector, which is currently operating in a legal grey area. Despite being illegal in Sri Lanka, online gambling platforms, particularly those based overseas, account for an estimated 60% to 70% of the country’s gambling activity. Dr. de Silva described online gambling as a “major grey area,” stressing that Sri Lanka has been discussing the need for regulation in this sector for years, but progress has been slow. This lack of regulation not only presents financial risks but also poses social challenges. “This legal vacuum poses both financial and social risks,” he said.
The new authority will address these issues by creating a unified licensing system for both physical and online casinos, ensuring that all gambling activities in Sri Lanka are brought under the same regulatory framework. This move is seen as a way to improve governance and protect both the economy and consumers from unregulated gambling risks.
International Expertise to Guide Framework
To ensure that the regulatory framework is both comprehensive and effective, Sri Lanka plans to seek international expertise. Dr. de Silva mentioned that the Treasury would consult with global experts, using models like Singapore’s gambling regulations as a reference. “Sri Lanka does not have the required experts for these tasks, so international expertise will be sought,” he added, underscoring the importance of drawing from successful international practices to build a robust system.
The regulatory framework will address not just the legal aspects of gambling, but also the compliance requirements of the global Financial Action Task Force (FATF), particularly in relation to anti-money laundering and counter-terrorism financing efforts. Dr. de Silva pointed out that once the regulations are finalized, Sri Lanka’s efforts will be reviewed by the FATF, ensuring that the country meets international standards.
Strengthening the Local Gambling Industry
Sri Lanka’s local gambling industry has also seen increased foreign investment, with City of Dreams Sri Lanka, a $1.2 billion integrated resort, opening its first phase in Colombo Port City in late 2024. The project, a collaboration between John Keells Holdings and Melco Resorts & Entertainment, aims to attract visitors from India, China, and other Southeast Asian markets. Lawrence Ho, Chairman of Melco Resorts, stated that the integrated resort could make Sri Lanka a premier gambling destination in the region, similar to Macau’s role in China. “Sri Lanka can be to India what Macau is to China,” Ho said, noting the resort’s potential to draw in tourists from neighboring countries.
This project aligns with the country’s broader efforts to boost tourism and economic growth. However, alongside the rise in foreign investment, Sri Lanka’s government has also been tightening its grip on the gambling industry. The recent increase in gaming taxes from 15% to 18%, along with higher entry fees for local players, reflects the government’s push to raise more revenue, especially following the economic collapse of 2022. The government is looking to replenish its finances after the country’s debt default, which led to protests and significant economic hardship.
Regulatory Framework in Place, Next Steps for the GRA
While the legal foundation for the GRA has been laid, there are still steps to be taken before the authority becomes fully operational. According to a senior official from the Department of Fiscal Policy, the Casino Business (Regulation) Act, passed in 2010, lacked the necessary implementing regulations until 2022. The finalization of these regulations paved the way for the formal creation of the GRA. “The regulatory foundation is now complete, and the next step is to formally constitute the authority,” the official explained.
The GRA’s Board will be made up of seven members, including key officials such as the Commissioner General of Inland Revenue and the Inspector General of Police. The Minister of Finance will also appoint three additional members. Once the Board is in place, the authority’s operational start date will be formally announced, and it will begin overseeing the industry.
In addition, the GRA will have the authority to engage both local and international consultants, ensuring that it is equipped to handle the complex regulatory tasks ahead. The involvement of international experts will be crucial in addressing the challenges posed by both land-based and online gambling sectors.
Source:
Gambling Regulatory Authority to be set up by next June, themorning.lk, October 19, 2025.
