Sri Lanka is preparing for a major shift in its gaming sector as the Gambling Regulatory Authority (GRA) officially begins operations on December 1. The new regulator will oversee a wide spectrum of gambling services, including land-based, ship-based, and online gaming, although online lotteries and social games will remain outside its jurisdiction.
A New Era of Oversight and Compliance
The GRA will be responsible for licensing, tax collection, and establishing standardized safeguards against problem gambling. Furthermore, it will work to ensure casino operators comply with strict rules surrounding anti-money laundering practices.
“The regulator will also ensure that casinos operate according to rules and concerns about money laundering,” stated Deputy Minister of Economic Development Anil Jayantha Fernando.
Additionally, several outdated gaming-related laws — including the Betting on Horse-Racing Ordinance, the Gaming Ordinance, and the Casino Business Act of 2010 — will be repealed. This marks a significant modernization of Sri Lanka’s gambling legislation.
Colombo’s Casino Sector Grows — but Carefully
Colombo, the nation’s commercial hub, already hosts a handful of land-based casinos. The sector expanded in October 2024 with the opening of the City of Dreams Sri Lanka, a $1.2 billion integrated resort featuring a 16,725-square-meter gaming floor.
Developed by John Keells Holdings and Melco Resorts & Entertainment, the project sparked comparisons to global casino hubs. In fact, Melco Chairman and CEO Lawrence Ho suggested Sri Lanka could one day become India’s equivalent to Macau.
However, government officials remain cautious. Rather than rapid expansion, regulatory stability will guide the market’s evolution.
“The focus is on regulation,” Ho said. “That regulation will define which gambling activities are permitted, the restrictions that apply and matters such as the revocation or cancellation of licences.”
Growth Outlook: Revenue Poised to Rise
The introduction of a unified regulator comes alongside new tax measures. As of October 1, the Betting and Gambling Levy increased from 15% to 18%. Meanwhile, casino entry fees for Sri Lankan citizens doubled, rising from $50 to $100.
Despite higher operating and access costs, industry expectations remain optimistic. Analysts project the gambling sector will reach $410 million in revenue by 2026, up from $240 million in 2020. With a forecast compound annual growth rate of 5.4% through 2031, Sri Lanka is positioning itself for sustainable and regulated market expansion.
