Under a new law that came into force on 1 January, Sri Lankan residents must now pay US$100 to enter casinos or other gaming venues in the country, doubling the previous entry fee of $50.
Separately, Parliament last year approved an increase in the gaming tax, raising it from 15% to 18%. The higher rate applies to all operators, including bookmakers, that generate monthly gross revenue exceeding Rs 1 million ($3,226).
According to the Inland Revenue Department, affected businesses are required to collect a Casino Entry Levy (CEL) of $100 — or the equivalent amount in another convertible foreign currency or in Sri Lankan rupees — from any Sri Lankan citizen entering their premises.
These increases were introduced in May 2025 and formally approved in December, amending the Betting and Gaming Levy Act of 1988.
Gaming industry on the upswing
The tax hikes are widely seen as a sign of confidence in Sri Lanka’s gaming sector, which is forecast to generate $410 million in revenue by 2026, up from $240 million in 2020. According to the Daily Mirror, gaming has been identified as a priority sector for increased fiscal contribution as the government works to expand its tax base. Analysts project the industry will grow at a compound annual rate of 5.4% through 2031.
City of Dreams Sri Lanka best illustrates this growth potential. The integrated resort opened last year in Colombo Port City and is a joint venture between John Keells Holdings and Melco Resorts International. It aims to attract visitors from India, China, Southeast Asia and the Middle East, all reachable within a four-hour flight. Reuters reports that Sri Lanka is targeting 3 million tourist arrivals this year, a 27% increase compared with 2025.
Melco chairman and CEO Lawrence Ho has described City of Dreams as “a symbol of possibility and a celebration of Sri Lanka’s potential as a world-class destination.” He added that Sri Lanka “could become to India what Macau is to China.”
To regulate the expanding sector, Sri Lanka’s first Gambling Regulatory Authority is expected to be operational by 30 June.
Sri Lanka post-crisis recovery is ongoing
The new levies are expected to help replenish state finances that were severely strained during the 2022 economic crisis. That year, Sri Lanka’s government declared bankruptcy for the first time and defaulted on its foreign debt obligations. Inflation surged beyond 50%, while shortages of fuel and food pushed large sections of the population into poverty and sparked nationwide protests.
In 2023, the International Monetary Fund provided a multibillion-dollar bailout to support the country’s recovery. Since then, economic conditions have stabilised, although vulnerabilities remain. Last year, the government forecast economic growth of 3.1% for the year ahead, but following the impact of Cyclone Ditwah in November, the IMF revised that projection down slightly to 2.9%.
