• GRA misses June deadline, followed by Nov. targets
• Draft regulations undergoing finalisation: Regulator  
• 6 licensed casino operators; 5 currently operational
• Betting, gaming revenue reached nearly Rs. 15 b in 2024

The Gambling Regulatory Authority (GRA) has set 31 December as the latest deadline for the publication of Sri Lanka’s much-delayed casino and online gambling regulations, after missing its initial 30 June target and a subsequent November timeline, as learnt by The Sunday Morning.   The delays have raised concerns over the Government’s failure to adequately regulate online gambling amid allegations of substantial tax revenue losses, despite collecting nearly Rs. 15 billion in betting and gaming levies and casino licence fees in 2024. Speaking to The Sunday Morning, GRA Director General Dr. W.M.K.G.A. Wickramasinghe confirmed that the regulations were being finalized following a review process and would be published by the end of December.

He said that an international advisory team had drafted the regulations and submitted them to the authority, which had referred them to a review committee. The reviewed proposals have since been returned to the GRA for finalization. The Gambling Regulatory Authority Act No.17 of 2025 came into operation on 1 December 2025 to establish a unified regulatory framework covering casinos, betting, and online gambling. However, the first phase of regulations, initially scheduled for 30 Jun 2026, remains unpublished, while 30 November had also been identified as the target for making the authority fully operational. According to information presented during parliamentary scrutiny in July, Sri Lanka had six licensed casino operators, of which five were operational, along with 37 licensed sports betting and horse-racing operators.

Inland Revenue Department (IRD) officials also informed the parliamentary Committee on Public Finance (COPF) that no online casino operators had been registered with the department at the time, despite numerous platforms targeting Sri Lankan customers. According to the IRD’s 2024 Annual Performance Report, the Government collected Rs. 9.81 billion through the Betting and Gaming Levy and Rs. 5.1 billion in casino license fees, bringing total collections from the two categories to approximately Rs. 14.91 billion, or 0.57% of the department’s total reported revenue. Meanwhile, the Government has increased taxes on gambling businesses, with the gross collection levy rising from 15% to 18% from 1 January 2026 for operators whose monthly gross collections exceed Rs. 1 million, under the Betting and Gaming Levy (Amendment) Act No.25 of 2025.

The casino entrance levy applicable to Sri Lankan citizens was also doubled from $ 50 to $ 100 per entrant, while casino operators are subject to an annual gaming levy of Rs. 500 million. The earlier licensing framework also prescribed Rs. 500 million for a five-year casino license or renewal. The corporate income tax rate applicable to betting and gaming businesses was increased from 40% to 45%, effective from 1 April 2025. Meanwhile, COPF Chairman Dr. Harsha de Silva has strongly criticized the Government’s failure to introduce the regulations, alleging that the prolonged delay was allowing substantial potential tax revenue to go uncollected.

Speaking to The Sunday Morning, Dr. de Silva accused the Government of failing to address revenue leakages from online gambling while continuing to impose substantial taxes on ordinary citizens and businesses. “Every day, millions and tens of millions, probably hundreds of millions of tax money is not being paid to the State, and the State is just looking the other way,” he charged. He claimed that successive governments had failed to establish an effective regulatory system despite repeated calls for action and parliamentary scrutiny. Dr. de Silva said he had consistently advocated the establishment of an independent gambling regulator, but questioned the effectiveness of the current arrangements in the absence of the supporting regulations. “There is a regulator, but there are no regulations,” he said.

According to the COPF Chairman, the absence of an effective regulatory framework has enabled foreign-linked online gambling businesses to operate in the country without sufficient financial supervision.He alleged that substantial amounts of money were being generated daily through online gambling activities, while the State was failing to collect taxes potentially due from such operations. The MP also raised concerns over the involvement of foreign nationals in online gambling-related businesses operating in Sri Lanka, warning that the absence of proper oversight could expose the country to wider financial and reputational risks. He questioned the effectiveness of Government efforts to block illegal gambling websites, alleging that some operators had continued their activities despite restrictions imposed by the authorities.

Dr. de Silva also criticised the Government’s broader approach to revenue collection, arguing that the authorities should prioritise plugging tax leakages and bringing unregulated businesses into the formal tax system instead of imposing additional burdens on working and middle-income earners.He maintained that the existing tax burden had placed considerable pressure on ordinary citizens, while potentially substantial revenue sources remained inadequately regulated.The COPF Chairman further questioned why successive deadlines for introducing the regulations had been missed despite repeated assurances that the necessary framework was being prepared.