Key Moments:
- Sri Lanka’s Cabinet has approved a 2025 budget proposal to raise the betting and gaming levy on gross revenue from 15 percent to 18 percent.
- The entry fee for Sri Lankan citizens entering casinos has been doubled from $50 to $100 under the proposed measures.
- The Gambling Regulatory Authority Act, certified in September 2025, consolidates gambling oversight and introduces a unified regulatory body.
Formal Steps Toward Higher Gambling Levies
Sri Lanka’s Cabinet has cleared a bill to raise the gaming and betting levy and double the casino entry fee for locals. Media Minister Nalinda Jayatissa confirmed that the Attorney General has approved the draft, meaning it now moves to the gazette and then Parliament for approval.
This legislation would amend the Betting and Gaming Levy Act, the primary statute governing gambling taxation in the country. Key changes include raising the gross revenue levy on betting and gaming from 15 percent to 18 percent, and increasing the entry fee for Sri Lankan citizens at casinos from $50 to $100.
Potential Sector Impacts and Industry Insights
Tourism specialist Dr. Dharshana Weerakoon said the levy hike and higher casino entry fee could reshape the industry. The government may earn more revenue, while casinos might rely more on foreign visitors. Positively, the higher costs could also support responsible gaming by reducing local participation, though maintaining competitiveness will remain important.
Progression of Legal Processes
While the 2025 budget had already outlined these changes, the latest approvals demonstrate that the legislative process is advancing. With the Cabinet and Attorney General’s clearance, the bill is set to be published and sent to Parliament, paving the way for the new levies and fees to take legal effect once approved.
Inauguration of the Gambling Regulatory Authority
Sri Lanka’s gambling reforms gained momentum with the new Gambling Regulatory Authority (GRA) Act. Enacted in September 2025, it unifies all gambling laws under one authority, creating a clearer and more modern system.
Deputy Economic Development Minister Anil Jayantha Fernando told Parliament, “The regulator will ensure that casinos operate according to rules and concerns about money laundering is also addressed.”
The GRA’s responsibilities span casinos, horse racing, and offshore gaming, including issuing licenses, enforcing compliance, and revoking licenses when needed. Casinos currently operating under provisional registrations – Bally’s, Bellagio, Casino Marina, and Stardust – are now required to align fully with the GRA’s licensing and compliance requirements.
Structure and Responsibilities of the GRA
| GRA Board Member | Role | Term Length (Years) |
|---|---|---|
| Secretary to the Ministry of Finance | Board Member | N/A |
| Commissioner General of Inland Revenue | Board Member | N/A |
| Head of Financial Intelligence Unit | Board Member | N/A |
| Inspector General of Police | Board Member | N/A |
| Three appointed by Finance Minister | Board Members | 3 |
The GRA board will include top government officials and three appointees selected by the Finance Minister for three-year terms.
Fiscal Backdrop and Economic Recovery
Sri Lanka’s move to raise gambling revenue comes after tough years following the 2022 crisis and debt default. Thanks to a $2.9 billion IMF bailout, the economy has already stabilized with lower inflation, normal interest rates, and a completed debt restructuring.
The IMF has urged Sri Lanka to double tax revenue to 15 percent of GDP, from just 7.3 percent in 2022. Increasing taxes on gambling forms a key part of the government’s approach to meeting this target. President Anura Kumara Dissanayake has highlighted the importance of these fiscal measures for national recovery.
Growth of the Gaming Sector and Regulatory Change
The country’s gambling market, estimated at $293.93 million in 2020, is forecasted to reach $410.04 million by 2026. Over the past decade, interest in casinos has grown, coinciding with the development of major resorts such as the City of Dreams Sri Lanka, which launched in August 2025 and underscored the necessity for updated regulatory measures.
With the GRA Act, all gambling activities are brought under a unified legal framework. Dr. Fernando explained, “In simple terms, what this Act seeks to achieve is the regulation of gambling and all related activities under one law and through one independent authority. The regulator will also examine the potential negative impacts of gambling and introduce suitable restrictions.” He also noted that gambling has “significant social and cultural implications” that will be addressed by the authority.
New Fiscal Measures and Compliance Framework
The new budget rules double the casino entry fee for Sri Lankan residents to $100 and raise the gambling levy on gross revenue to 18 percent from 15 percent. The GRA has been tasked with ensuring compliance and enforcing these changes, which are expected to increase government revenue and promote responsible gaming.
These reforms aim to simplify regulations, strengthen social protections, and meet IMF-mandated tax targets, all while seeking to keep Sri Lanka’s gaming environment attractive for domestic and international operators.
Looking Forward: Regulatory Reform and Market Prospects
Legal and regulatory updates, including the establishment of the GRA and passage of the amended Betting and Gaming Levy bill, are considered necessary steps toward modernizing the sector and enhancing its economic contributions. The outcome will hinge on the GRA’s effectiveness in supporting growth, upholding high compliance standards, and balancing regulatory oversight with competitive positioning.
Once Parliament approves the latest amendment bill, the increased levies and entry fees will be enforceable, providing government authorities with new tools to manage revenue and protect social interests.
Colombo will host South Asia’s premier iGaming summit, SiGMA South Asia, from November 30 to December 2, 2025, an event that will gather over 5,000 delegates to explore opportunities in one of the fastest-growing gaming markets.
- Author
Daniel Williams
