Sri Lanka Moves to Establish Landmark Gambling Regulator Amid Calls for Reform

Sri Lanka is poised to enact a major shift in its approach to gambling oversight after the Cabinet of Ministers approved a draft bill to create the country’s first comprehensive regulatory framework for the industry. Lawmakers are betting that the new authority will clamp down on the rampant black market, introduce stronger consumer protections, and ensure the sector makes its fair contribution to national revenue.

On Monday, the Sri Lankan cabinet gave the green light to the Gambling Sports Regularisation Act, marking a crucial step toward modernizing and consolidating control over gambling activities across the nation. The bill is now set to be tabled in Parliament, and anticipation is building over what could become one of the country's most significant regulatory initiatives. The new framework will target both traditional land-based gambling and the growing online and offshore sectors, which have largely operated beyond the reach of existing laws.

A report from local outlet Daily FT detailed an official announcement from cabinet spokesman and health minister Dr. Nalinda Jayatissa, who described the bill as a pivotal development for Sri Lanka’s gambling industry. "This is a rare moment in the management of gambling in Sri Lanka," Jayatissa said, emphasizing that the new regulatory authority will possess sweeping powers, covering land-based venues, online platforms, offshore gambling activities on ships, and operations within the Colombo Port City.

The proposed regulator is envisioned as the sole national authority tasked with overseeing the full spectrum of gambling activities. Its mandate will stretch to offshore casinos and internet-based gambling services, positioning Sri Lanka to better control and monitor an industry that has long been fragmented and inconsistently policed. Officials believe that with robust regulation in place, Sri Lanka could elevate its status as a respected jurisdiction within the global gaming economy. Government figures hope the move will help level the playing field for domestic operators, align regulatory standards with international norms, and attract new investment in tourist-focused gaming ventures.

The push to regulate gambling also responds to mounting pressure from the Committee on Public Finance (CoPF), which has repeatedly criticized the government's failure to rein in unregulated operators. CoPF has pointed to the sector’s lax oversight as a major factor contributing to tax revenue losses. While brick-and-mortar casinos in Sri Lanka are taxed, online gambling sites and offshore operators often function in a legal grey zone, dodging both regulation and taxation.

The new legislation seeks to eliminate these loopholes. It lays out plans to license and tax all gambling entities that target Sri Lankan residents, enforce mandatory compliance reporting and audit obligations, and introduce measures to combat illegal gambling and potential money laundering. It will also extend regulatory oversight to gambling conducted aboard vessels docked within Sri Lankan waters. In addition, the bill includes consumer protection measures designed to ensure fair treatment and safer gambling environments for participants.

This legislative effort fits into President Ranil Wickremesinghe’s broader economic reform program, which aims to boost national revenues and modernize key sectors of the economy. As the bill advances to Parliament for debate, it is expected to face intense scrutiny from lawmakers and stakeholders alike. Should it pass, Sri Lanka would join a growing number of South Asian nations that are embracing the financial and regulatory benefits of bringing the gambling sector firmly under state control.

By fLEXI tEAM