Sri Lanka Gambling Regulation

B. Atanasov
Boris Atanasov is an iGaming writer with over four years’ experience, creating engaging content on slots, video poker, roulette, and blackjack.
 (editor) | Updated:

Gambling Regulation Sri Lanka, officially known as the Democratic Socialist Republic of Sri Lanka, is an island country located in South Asia. Gambling has existed in different forms in the country for many years, but it was not regulated until 2010. Although many viewed this year as the beginning of a new, regulated era for gambling in Sri Lanka, the situation reverted to its previous state only a few years after the efforts to legalize gambling on the island.

Nowadays, gambling in Sri Lanka is, for the most part, an unregulated market. With the introduction of a new bill in 2010, operators were allowed to apply for a license to operate land-based casinos. However, due to amendments to the law introduced in 2015, no new brick-and-mortar casinos have actually launched in Sri Lanka.

While online gambling has become extremely popular worldwide because of its accessibility, Sri Lanka is one of the countries with limited internet penetration. As a result, significantly fewer people have access to the internet, let alone online gambling. That said, online gambling is not regulated in Sri Lanka, so those who do have internet access often resort to casino sites to wager real money on various games.

History of Gambling in Sri Lanka

1Civil war from 1983 until 2009

Gambling has long existed in Sri Lanka, but for most of that time it was unregulated. The main reason for the lack of proper regulation was the nearly 27-year period during which the country was in a civil war from 1983 until 2009. Naturally, the conflict placed a huge economic burden on the country, and gambling was not among the government’s priorities.

Although gambling was not regulated during the civil war, operators still offered various gambling activities to Sri Lankans. Most of these businesses operated in a gray area, but the larger ones paid taxes on their income, giving the government enough reason to overlook their unregulated operations.

2Casino Regulation After the End of the Civil War

Following the end of the civil war in Sri Lanka in May 2009, the government began drafting various legislative amendments, including those that would affect the country’s gambling industry. In 2010, the administration of President Rajapaksa passed the Casino Business Act. The act aimed to establish legal guidelines for licensing and regulating brick-and-mortar casinos and betting shops in Sri Lanka.

Before the Casino Business Act was enacted, gambling operated largely in a gray area, which discouraged foreign investors from entering the Sri Lankan market. After the new law took effect, President Rajapaksa reached agreements with three major casino operators to develop hotel complexes that would include casinos offering a variety of games.

The project for launching the new hotel-casino complexes was estimated to cost US$1.6 billion, and construction of some casinos began soon after the agreements were signed. Although the plans appeared to be a step toward transforming Sri Lanka’s capital, Colombo, into an attractive tourist destination, President Rajapaksa’s successor offered no support for developing the gambling sector.

Suspension of Casino Licenses

Gambling While some foreign investors showed interest in developing the gambling industry in Sri Lanka, the launch of the three casinos was frowned upon by quite a few politicians, including some members of Rajapaksa’s own office. The gambling expansion was also severely criticized by the influential Buddhist clergy of Sri Lanka.

In 2015, Rajapaksa unexpectedly lost the presidential election to Sirisena and could not serve a third consecutive term. Sirisena, a former Minister of Health, received strong support from the Buddhist clergy. The new president did not hesitate to cancel the three casino projects that had been launched during Rajapaksa’s term. The government agreed to let the international companies continue developing the hotel parts of the resorts, but the investors decided to abandon their projects entirely.

In addition to canceling the licenses of the three casino operators, Sirisena also introduced higher tax rates for betting shops as well as a $100 entry tax for casinos. These changes were implemented through several amendments to the Betting and Gaming Levy Act. Despite announcing that no additional licenses would be issued to casino operators, the government allowed casinos that had been licensed under the 2010 amendments to the law to continue operating in Sri Lanka.

Gambling Regulation in Sri Lanka

Currently, gambling in Sri Lanka is largely unregulated. In 2010, however, the country’s former president attempted to change the legal framework by introducing several major hotel resorts that would also house land-based casinos. Although President Rajapaksa’s administration passed a law allowing several international operators to launch in Sri Lanka, his successor pursued a different approach to gambling regulation.

Gambling Fully Regulated in Sri Lanka
Casino Licenses Canceled by Law Amendments

Online Gambling in Sri Lanka

Gambling In recent years, online gambling has become an international phenomenon and has attracted significant interest. Many players have switched to wagering money online because of its accessibility. With the global pandemic shutting down land-based gambling facilities and regulations requiring everyone to stay at home, online gambling has gained even greater popularity.

Gambling remains largely unregulated in Sri Lanka, and this fully applies to online gambling as well. Because internet infrastructure is underdeveloped, limited access to the internet makes online gambling less popular. That said, many of those who do have access to the internet resort to wagering real money on foreign casino and betting sites.

Due to the lack of regulation and local authorities to oversee online gambling, Sri Lankans do not have to worry about legal action when they gamble online. Since there is no way for operators to apply for a license to operate in the Sri Lankan market, local players must place bets on foreign websites. While this type of gambling is unregulated, there are no cases of Sri Lankans being prosecuted for wagering online. Moreover, the government does not take any particular measures to block such websites, giving casino fans the opportunity to join various online casinos.

One thing that should be stressed is that since online gambling is not regulated in Sri Lanka, players may often be put at risk while placing bets online. The government cannot protect individuals who become victims of fraudulent activities while gambling on offshore websites. This is why Sri Lankans are advised to be very careful when choosing the websites they play on.

Closing Thoughts

Conclusion Currently, gambling in Sri Lanka is mainly unregulated, with no laws establishing a legal framework for the industry. There are a few land-based casinos and betting shops in the country, but they operate predominantly thanks to legal loopholes in the current laws.

Following the end of the civil war in Sri Lanka, there was an attempt to make gambling a fully regulated industry. A bill passed in 2010 aimed to develop the land-based casino sector in Sri Lanka, with three casinos receiving the green light to open in the country.

Unfortunately, a change in the country’s presidential rule introduced several amendments to the law, canceling the three casino licenses and the projects that had been supported by the former president’s administration. With a new president in charge, taxes on gambling were raised, and the government announced that it would not issue any new licenses to casino operators.

Online gambling in Sri Lanka is just as unregulated as its land-based form. Because of limited internet access, online gambling is not widespread among Sri Lankans. Nevertheless, most of those who can access the internet enjoy online gambling without worrying about any legal consequences. With no regulations and no preventive measures taken to protect players, Sri Lankans can freely gamble online but cannot ask for any legal help if they become victims of fraudulent activities related to online gambling.

While Sri Lanka could benefit from properly regulating its gambling sector, at the moment there are no signs that the government will introduce new laws.