Sri Lanka's gambling industry welcomes historic changes. Recently, the Sri Lankan Parliament officially passed the second reading of the "Gambling Regulatory Authority Act," which is scheduled to take effect after being signed by the Speaker of the Parliament. This means that the country's gambling industry will enter an era of unified regulation, marking the integration of the previously dispersed regulatory system and supervision model, and will be managed and supervised by an independent institution overseeing various gambling activities, including casinos, online gambling, and other related forms of gambling.
The passage of this bill comes just over a week after the approval by the Parliamentary Committee on Public Finance (CoPF), demonstrating the government's strong determination to standardize and legalize the gambling industry. It also heralds a more transparent and institutionalized management model for Sri Lanka's gambling market.
According to the bill, the proposed Gambling Regulatory Authority (GRA) will have comprehensive authority, including levying gambling-related taxes, ensuring industry transparency and good governance, combating illegal gambling activities, regulating betting processes and the operation of gambling venues, while also considering reducing the potential harm of gambling to society.
In addition, the regulatory authority will actively support economic growth and tourism development, be responsible for issuing casino licenses, and regulate existing and newly opened casinos, setting a transition period for existing casinos to smoothly integrate into the regulatory system. The bill also specifies that the regulatory authority will strictly supervise betting on presidential election candidates and major sports events gambling (such as the Sri Lanka Super League cricket matches) to ensure fairness and legality.
Anil Jayantha Fernando, Deputy Minister of Economic Development, pointed out in the parliament that the newly established regulatory body will closely monitor the money laundering risks in the gambling industry and ensure that casinos operate legally according to regulations. The deputy minister also emphasized that the bill includes school raffles, funeral poker card activities, and temple offering plate auctions in the "gambling" definition, but the government has no intention of taxing these cultural and religious activities to avoid interfering with normal customs and traditions. In response to concerns raised by opposition members, the deputy minister clarified that although specific cultural activities are included in the gambling definition, they will not be subject to taxation or mandatory regulation.
Rauff Hakeem, acting chairman of the Parliamentary Committee on Public Finance, also called for the government to focus on the regulation of major sports event gambling to prevent foreign gambling institutions from operating betting businesses through local individuals. Additionally, the committee approved foreign exchange management regulations related to gambling and set an entry fee of 50 USD for local residents entering casinos to balance regulatory and market development needs.
Although the bill added some clauses in the second reading of the parliament to make the regulation more comprehensive, key issues such as online gambling remain unclear, and some previously raised defects have not been effectively resolved. Therefore, if implemented in its current version, the bill may still face issues of insufficient regulation, legal loopholes, and execution difficulties in practice.
According to the draft, the proposed Gambling Regulatory Authority will serve as an independent institution, with core responsibilities including uniformly issuing and regulating gambling operation licenses and gambling intermediary licenses, establishing industry rules and penalties, implementing anti-money laundering provisions, and ensuring the safety, hygiene, and service standards of gambling venues.
The board of the regulatory authority is planned to consist of the Secretary of the Treasury, the Commissioner of Taxation, the head of the Financial Intelligence Unit, and the Chief of Police or their representative, while the Minister of Finance will appoint three members for a three-year term. Additionally, the bill repeals three outdated laws: the "Betting on Horse Racing Ordinance," the "Gambling Ordinance," and the "Casino Ordinance," to integrate the regulatory system.
However, even if the bill is approved, doubts still exist. Industry experts and the think tank Advocata Institute pointed out that the institution might lack real independence, as the Minister of Finance has the power to appoint the Director-General and board members, issue binding instructions, and establish regulations, which could lead to political interference and undermine regulatory credibility. The bill still has several loopholes in its execution: online gambling lacks clear player registration management and overseas operation platform supervision mechanisms, the Tourism Development Authority is not included in the institutional structure, the National Lottery Commission is not within the regulatory scope, revenue collection depends on casino self-reporting, and penalties for illegal activities are below international standards, which could allow major operators to evade regulations and weaken regulatory effectiveness.
Why was the bill quickly approved? Previously, the CoPF had repeatedly questioned the draft of the Gambling Regulatory Authority, including concerns about the lack of independence of the regulatory authority, excessive power of the Ministry of Finance, and unclear license issuance, annual review, and penalty standards, fearing potential spaces for interest transfer. According to the legislative process, the Ministry of Finance is responsible for drafting and submitting the bill, which is approved by the cabinet and then transferred to the CoPF for review of financial revenue, expenditures, and tax provisions before entering the final parliamentary deliberation.
External analysis suggests that the rapid passage may be influenced by public opinion pressure and international investment attention. If the regulatory authority bill is shelved for a long time, it could lead to "licensing without regulation" doubts, affecting the international image and investment environment. It is worth noting that the version approved by the CoPF is not the original draft but an adjusted version with modification suggestions or execution conditions.
Industry insiders analyze that the government has a strong motivation to promote the development of the gambling industry, increase tax revenue, and attract investment, making it likely that the bill will pass. However, if the controversial points are not resolved and regulatory loopholes are exposed, international investors and tourists may lack confidence in Sri Lanka's gambling market, ultimately affecting economic and industry development.
Data shows that the Sri Lankan gambling market was valued at approximately 294 million USD in 2020, expected to increase to 410 million USD by 2026. The rapidly developing South Asian market brings valuable opportunities to Sri Lanka, but also means facing significant challenges in regulation and execution.
In summary, the official passage of the "Gambling Regulatory Authority Act" in Sri Lanka marks an important historical moment as the country's gambling industry enters an era of unified regulation. However, the bill still faces many controversies and potential risks in execution, especially issues such as online gambling regulation, overseas platform control, and the independence of the regulatory authority. The future development and success of Sri Lanka's gambling market will largely depend on the implementation of this bill and whether the regulatory authority can truly operate independently and transparently, while effectively attracting international investors and ensuring social stability and economic growth.
