On December 1st, Sri Lanka’s Act No. 17 of 2025 came into force, providing for a major restructuring of the local gambling oversight system. The document enshrines the country’s transition to a unified framework for all forms of gaming.
Powers of the New Supervisory Body
According to the government’s initiative, a single entity will be established in the state. It is titled the Gambling Regulatory Authority (GRA).
This structure is set to oversee all key areas of the industry, including:
- online portals;
- bookmakers' services;
- offshore entertainment platforms;
- events on maritime vessels and in Colombo’s Port City.
The law replaces 2 outdated ordinances that address bets on horse racing and gaming, as well as the 2010 Casino Business Act. The project received unanimous support from Parliament earlier in August and was certified in September.
Legislators emphasise that the reform will help address several important issues:
- strengthen anti-money laundering (AML) measures;
- implement uniform industry standards for fair competition;
- reduce social risks associated with various gambling practices;
- support the country’s long-term tourism and economic objectives.
The regulator will ensure that companies operate in accordance with international requirements, including strict AML norms. The GRA will be granted broad powers to oversee activities onshore, online, and on seagoing vessels. Only lotteries and social entertainment will fall outside the new body’s jurisdiction.
The authority’s responsibilities will also include licensing and tax oversight. This approach will streamline budget revenues and strengthen protections against the development of ludomania.
Although the law entered into force on December 1st, the deadline for completing the GRA’s formation is June 30th, 2026.
Investment Environment: Impact on the Industry
The transformation of the legislative framework is taking place against a backdrop of growing interest from global stakeholders and the active growth of the region’s amusement infrastructure. For instance, in August, Melco, a large operator of Asian gambling venues, opened City of Dreams, the country’s 1st integrated international-class resort. The $1.2 billion facility offers 16,725 sq m of gaming floor space.
The project could become for India what Macau is for China. Despite the successful debut of such a grand land-based complex, authorities intend to curb the industry’s expansion and have already ruled out issuing additional licences.
They keep the primary focus on regulation. Only a robust legislative framework will determine which niche activities are beneficial for regional development and what restrictions should be imposed.
Growth and Tighter Oversight: Financial Perspectives
In 2026, Sri Lanka will undergo the FATF audit. This process makes it particularly important to demonstrate progress in security and the strengthened controls across high-risk segments. A functioning and transparent supervisory body will be seen as a strong positive signal, confirming the government’s commitment to creating a stable and predictable environment for long-term investment.
Against this backdrop, the authorities have revised the tax burden: effective October 1st, the gambling levy rate has increased by 3% to 18%. At the same time, the casino entrance fee for Sri Lanka’s residents has doubled to $100.
Analysts estimate that by 2026, local industry turnover will reach $410 million, significantly exceeding the 2020 figure of $240 million. The projected CAGR through 2031 is 5.4%.
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