Sri Lanka Gambling Regulation

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 numerous years but it was not regulated until 2010. While many saw this year as the beginning of a new, regulated and legal period for gambling in Sri Lanka, things changed back the way they were just a few years after the attempts to legalize gambling on the island country.

Nowadays, gambling in Sri Lanka, for the most part, is 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. Due to the amendments to the law introduced in 2015, however, no new brick-and-mortar casinos have actually launched in Sri Lanka.

While online gambling has taken over the world, being extremely popular due to its accessibility, Sri Lanka is one of those countries with limited internet penetration. This leads to a significantly lower number of people who have access to the internet, let alone to online gambling. That said, there is no actual regulation of online gambling in Sri Lanka, meaning those who have access to the internet 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 been around in Sri Lanka for a long time but it was unregulated for the majority of its existence. The main reason for the negligence on the proper regulation of gambling was the extensive period of almost 27 years, during which the country was in a civil war from 1983 until 2009. Naturally, this brought huge economic burdens to the country and gambling was not among the top priorities of Sri Lanka’s government.

While gambling was not regulated during the years of the civil war, that is not to say that there were no gambling operators offering different gambling activities to Sri Lankans. Most of these businesses were operating in a gray area but the major ones did pay taxes on their income, giving the government enough of a reason to ignore 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 started working on various legislative amendments, including ones that will affect the gambling industry in the country. In 2010, the administration of President Rajapaksa passed the Casino Business Act. The purpose of passing this piece of legislation was to establish a legal guideline for licensing and regulating brick-and-mortar casinos and betting shops in Sri Lanka.

Before the Casino Business Act was enacted, gambling was pretty much a gray area, with this being one of the reasons for foreign investors to avoid the Sri Lankan market. Following the implementation of the new law, President Rajapaksa made a deal with three huge casino operators that were supposed to launch hotel complexes that would have included casinos that would have offered a variety of gambling games.

The project for launching the new hotel-casino complexes was estimated to cost US$1.6 billion, with the construction of some of the casinos having launched after the agreements with President Rajapaksa were made. While the plans for the launch of the major casino complexes seemed like a step towards transforming Sri Lanka’s capital, Colombo, into an attractive tourist destination, President Rajapaksa’s successor showed no support for the development of 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, unexpectedly, Rajapaksa lost the presidential election to Sirisena and could not rule the country for e third consecutive term. Sirisena was a former minister of health and received huge support from the Buddhist clergy. The new president did not hesitate to cancel the three casino projects that were launched during Rajapaksa’s term. The government agreed to let the international companies continue with the development of the hotel parts of the resorts but the investors decided to give up 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 an entry tax of $100 for casinos. These changes were implemented through several amendments to the Betting and Gaming Levy Act. Despite informing that there will be no more licenses issued to casino operators, the government will allow casinos that have been licensed after the 2010 amendments to the law to continue operating in Sri Lanka.

Gambling Regulation in Sri Lanka

Currently, gambling remains mainly unregulated in Sri Lanka. That said, in 2010, the former president of the country did try to change the legal framework and introduce several major hotel resorts that will also include land-based casinos. While President Rajapaksa’s administration passed a law that enabled several international operators to launch in Sri Lanka, Rajapaksa’s successor had other plans for the gambling regulations in the country.

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 that has gained huge interest. The reason why many have switched to wagering money online is the accessibility of this type of gambling entertainment. With the global pandemic shutting down land-based gambling facilities and regulations requiring everyone to stay at home, online gambling has gained even bigger popularity.

Gambling still remains a rather unregulated market in Sri Lanka and this fully applies to online gambling as well. Since internet integration is not well developed in the country, the limited access to the internet makes online gambling less popular in the country. That said, many of those who 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 actions when they gamble online. Since there is no way for operators to apply for a license to operate on the Sri Lankan market, local players will need to opt for placing bets on foreign websites. While this type of gambling is unregulated, there are no cases of Sri Lankans being prosecuted for wagering online. What is more, 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 will not be able to protect any individuals who have been victims of fraudulent activities while gambling on offshore websites. This is why Sri Lankans are advised to be very careful when choosing the websites to play on.

Closing Thoughts

Conclusion Currently, gambling in Sri Lanka is mainly unregulated, with no laws establishing the legal framework for regulating this industry. There are a few land-based casinos and betting shops that can be found in the country but they have been operating predominantly thanks to legal loopholes in the current laws.

Following the end of the civil war period in Sri Lanka, there was an attempt for gambling to become 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 ruling introduced several amendments to the law, canceling the three casino licenses and the projects that have been supported by the administration of the former president. With a new president in charge, taxes on gambling have been raised and the government announced that it will not issue any new licenses to casino operators.

Online gambling in Sri Lanka is just as unregulated as its land-based form. Due to the limited internet access, online gambling is not that widespread among Sri Lankans. Despite that, most of those who can enjoy access to the internet, enjoy online gambling without having to worry about any consequences of participating in virtual gambling. With no regulations and no preventative measures taken to protect players, Sri Lankas can freely gamble online but cannot ask for any legal help in case of being victims of fraudulent activities related to online gambling.

While Sri Lanka can benefit from properly regulating its gambling sector, at the moment, there are no signs of the government introducing new laws.