Sri Lanka is moving forward with plans to create its new Gambling Regulatory Authority (GRA), a step that aims to enhance oversight of the country’s rapidly growing gaming industry. The national government has set a target to have the GRA fully operational by June 30, 2026, after recent discussions in Parliament. This milestone follows the passage of the Gambling Regulatory Authority Bill in August, which officially laid the groundwork for the creation of the regulatory body.
The Need for a Dedicated Gambling Regulator
The establishment of the GRA is part of Sri Lanka’s broader strategy to regulate both land-based and online gambling operations. As of now, the country faces challenges in collecting tax revenues from the online gambling sector, which has become the dominant form of gaming in Sri Lanka. During a meeting with the Committee on Public Finance (COPF) earlier this month, officials revealed that around 60% to 70% of casino activity now takes place online, with only 30% to 40% of players visiting physical casinos. This trend has highlighted the urgent need for a system that can efficiently collect taxes from the booming online market.
The GRA’s mandate will include overseeing the collection of gambling-related revenue, ensuring transparency in operations, curbing illegal gambling, and standardizing gaming establishments across the country. In addition to regulating online gambling, the GRA will also be tasked with enforcing standards for land-based casinos. The body will have a critical role in ensuring the country adheres to international financial and anti-money laundering standards, particularly as Sri Lanka prepares for a review by the Financial Action Task Force (FATF) in 2026 regarding its anti-money laundering and counter-terrorism financing practices.
The formation of the GRA is expected to be a complex process. While the legislation for its creation has already been passed, detailed regulations are still being developed. These regulations will outline important aspects such as licensing procedures, operational conditions, penalties, and compliance measures aimed at protecting both the government’s tax revenue and consumers from unregulated gambling.
Dr. Harsha de Silva, Chairman of the COPF, emphasized that international consultancy support would be sought to help design the regulatory framework, likely drawing inspiration from successful models such as Singapore’s. The framework will ensure that the GRA can effectively regulate the sector and bring online gambling into the fold of legal operations. At present, online gambling in Sri Lanka is largely unregulated, a situation that has been a significant concern for both lawmakers and industry stakeholders.
One of the key aspects of the GRA’s operation will be addressing the high level of unregistered online gambling. This form of gambling has become widespread, with a significant portion of Sri Lanka’s gaming activity taking place outside of the existing regulatory framework. The country’s focus will likely shift toward ensuring that online gaming platforms operate under the new legal structure, with clear guidelines for tax collection and operational compliance.
Sri Lanka’s Strategic Tourism and Gaming Vision
As part of its broader economic strategy, Sri Lanka aims to capture up to 10% of its GDP from tourism, with a particular emphasis on attracting international tourists interested in gambling. This vision has been underscored by the launch of the City of Dreams Sri Lanka, the country’s first international-standard integrated resort with a casino, which opened in Colombo in August. Managed by Melco Resorts and Entertainment Ltd, this development aims to attract high-end tourists, particularly from neighboring India, a key source market for Sri Lanka’s tourism sector.
Lawrence Ho, Chairman of Melco Resorts, has suggested that Sri Lanka could become “India’s Macau,” capitalizing on its proximity to the Indian market. The country is targeting half a million Indian tourists this year, marking a 20% increase in visitors from its largest tourist market. This growing tourism sector, combined with the legal framework for gambling, will play a crucial role in Sri Lanka’s economic recovery and future growth.
In addition to establishing the GRA, Sri Lanka’s government has made strides in adjusting its gambling-related taxation policies. As reported by GGRAsia, in October 2025, the Cabinet of Ministers approved a budget proposal to increase the betting levy by three percentage points, raising the tax rate on betting and gaming to 18%. Furthermore, the casino entry fee for Sri Lankan citizens has been doubled to US$100. These measures reflect the government’s commitment to increasing its revenues from the gaming sector while also enhancing oversight.
