Sri Lanka will launch a new iGaming authority in 2026 to license operators, regulate gambling, and collect taxes.
Around 60–70% of gambling activity in Sri Lanka now takes place online, posing major challenges for tax collection and regulatory oversight, according to findings presented to the Committee on Public Finance (CoPF) this week.
CoPF Chairman Dr. Harsha de Silva warned that only 30–40% of players still visit physical casinos. He urged the government to fast-track a unified framework to regulate both online and offline gambling. The goal is to capture significant revenue lost to unregulated platforms.
New regulator by 2026
Dr. de Silva urged the swift establishment of the Gambling Regulatory Authority (GRA). The new body will license operators, regulate gambling, and collect taxes. Officials from the Finance Ministry and Inland Revenue Department said it will be fully operational by 30 June 2026.
The seven-member board of the GRA will include the Finance Secretary, the Commissioner General of Inland Revenue, the Head of the Financial Intelligence Unit, and the Inspector General of Police. The Finance Minister will appoint three additional members, and the board will select a Chief Executive Officer to lead the organization.
Dr. de Silva emphasized that effective regulation is critical for compliance with Financial Action Task Force (FATF) standards on anti–money laundering (AML) and counter-terrorism financing (CTF). Currently, none of Sri Lanka’s six licensed casinos are authorized to operate online. However, a growing number of unlicensed digital platforms continue to operate outside the tax net, a loophole the GRA aims to close.
The new regulatory structure follows the Gambling Regulatory Authority Act, No. 17 of 2025. The Act consolidates all gambling laws into a single framework. It repeals outdated laws such as the Betting on Horse-Racing Ordinance, Gaming Ordinance, and Casino Business (Regulation) Act. The goal is to create one unified system for physical and online gambling.
Fiscal and structural reforms
Under the new law, the GRA will determine permissible gambling activities, issue and revoke licenses, and coordinate with the Financial Intelligence Unit and law enforcement agencies to prevent money laundering. In tandem with the regulatory overhaul, the government has introduced several fiscal measures:
- The casino entry fee for Sri Lankan residents has been doubled
- The gross gambling revenue tax has been increased from 15% to 18%
The GRA will be responsible for enforcing these measures and ensuring that online operators contribute their fair share of taxes, a step expected to recover significant revenue losses from unregulated digital gambling platforms.
Existing casino operators such as Bally’s, Bellagio, Casino Marina, and Stardust, which have been operating under provisional registration since 2013, will now come under direct oversight by the GRA.
This does not mean issuing new licenses. The goal is to ensure that existing gambling operations are properly monitored and compliant.
Deputy Minister of Economic Development, Dr. Anil Jayantha Fernando, stressed that the reforms focus on regulation rather than expansion. The GRA will also assess the social and cultural impacts of gambling, aiming to balance economic benefits with public welfare.
What does this mean for Sri Lanka's gambling industry?
The formation of the GRA marks a major milestone for Sri Lanka’s gambling sector. By bringing online operations into the formal system and consolidating oversight under one authority, the government seeks to increase revenue, enhance transparency, and align with international regulatory standards.
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