Sri Lanka’s Gambling Regulatory Authority (GRA) is expected to become fully operational by 30 June 2026. According to Harsha de Silva of the Committee on Public Finance, the legislation establishing the authority has already been enacted. “What remains is the development of detailed regulations to make it functional,” he explained.
Speaking to The Morning, de Silva said the upcoming framework will outline licensing procedures, operational requirements, and penalties for violations. “It’s essential to protect government tax revenue while ensuring consumers are shielded from the dangers of unregulated gambling,” he added.
Law firm Tiruchelvam Associates described the GRA as a “one-stop shop” overseeing all forms of gambling, excluding lotteries and social games. De Silva also mentioned that the government plans to seek “international expertise” in drafting gaming regulations, taking inspiration from Singapore’s regulatory model.
Online gambling a ‘major grey area’
Although online gambling remains illegal in Sri Lanka, it currently dominates the market. According to Lanka News, an estimated 60% to 70% of local bettors use unregulated offshore platforms.
“Online gambling has become a significant grey area,” said Harsha de Silva. “We’ve discussed the need for regulation for years, yet progress has been minimal. This legal gap creates both financial and social risks.”
De Silva added that once new safeguards are implemented, the global Financial Action Task Force will assess Sri Lanka’s anti-money laundering and counter-terrorism financing measures.
At present, seven land-based casinos are legally licensed in Sri Lanka—six smaller gaming venues and one integrated resort (IR). The IR, City of Dreams Sri Lanka, launched Phase 1 last October in Colombo Port City, followed by Phase 2, which includes the casino, in August.
New era of tourism in Sri Lanka
City of Dreams Sri Lanka is a joint venture between John Keells Holdings and Melco Resorts & Entertainment. The $1.2 billion integrated resort features two hotels, a 16,700-square-metre casino floor, meeting and convention facilities, and a range of non-gaming attractions. It also stands as the largest private investment ever made in Sri Lanka.
The property is expected to attract visitors from India, China, Southeast Asia, and the Middle East—all located within a four-hour flight.
“This is more than just a property—it represents opportunity and showcases Sri Lanka’s potential as a world-class destination,” said Melco Chairman and CEO Lawrence Ho during the casino’s ribbon-cutting ceremony. “Sri Lanka can be to India what Macau is to China,” he added. “Colombo’s proximity to India gives this integrated resort enormous potential.”
Higher gaming tax, locals levy
In September, Sri Lanka approved a gaming tax hike from 15% to 18% and doubled the local entry fee from $50 to $100.
According to the Sri Lanka Financial Times, the government expects these new taxes to boost revenue and help replenish state funds depleted during the 2022 economic crisis. That year, Sri Lanka declared bankruptcy and defaulted on its debt for the first time in history, sparking nationwide shortages of essentials like fuel and food, massive public protests, and the eventual resignation of former president Gotabaya Rajapaksa.
In an analysis published on 7 October, the World Bank described Sri Lanka’s recovery as “uneven and incomplete.”
“To build a stronger, fairer economy that benefits all citizens, Sri Lanka needs private-sector investment, job creation, and careful management of public spending,” said David Sislen, World Bank division director for Sri Lanka.
The World Bank projects that Sri Lanka’s economic growth will ease to 4.6% in 2025 and 3.5% in 2026, compared to 5% in 2024.
