The Sri Lanka gambling sector is undergoing a comprehensive transformation under the leadership of President Anura Kumara Dissanayake, who is implementing reforms to modernize the regulatory framework, introducing stricter government oversight and enhanced revenue generation. Accordingly, the administration has officially published a draft legislation that, if passed, would set up an independent Gambling Regulatory Authority representing the greatest regulatory transformation in recent history.
Complete Legislation to Fill the Industry Gaps
The new law focuses on establishing a single, centralized Gambling Regulatory Authority that will have complete control over all aspects of gambling within the Sri Lankan jurisdiction. Presenting a unified approach because currently, the enforcement powers are split among several different bodies, and this independent body should have broad enforcement as well as licensing powers.
The reform package comprises the total repeal of three outdated ordinances:
- Wagering on horse races
- Gambling in general
- and the operation of a casino
These colonial-era regulations have proven insufficient for modern gambling markets, particularly in matters related to digital platforms and international operators. Under the new framework, acknowledgment is made of technological advancements and their integration into the global market, which existing laws cannot effectively address.
In this setup, the body will maintain a full watch from old land-based casinos and racetracks to new online betting sites and offshore gaming operations. This wide range demonstrates an understanding that current game markets have surpassed old limits and require flexible rule methods.
Better Rules and Money Gathering Ways
The law emphasizes the importance of robust compliance systems, which encompass money laundering controls, enforcement of technical standards, and comprehensive player protection rules. These needs aim to close the regulatory gaps that have allowed unregulated operators to avoid scrutiny while providing inadequate consumer protection.
Revenue collection is at the heart of the reform agenda, and under this new framework, any loopholes that allow gambling operators to avoid paying taxes will be closed along with ensuring that all fees are properly collected. The Government undertakes to generate significantly higher revenues by improving the monitoring of compliance and bringing more aspects under regulatory scrutiny—including previously unregulated market segments.
The Authority shall have enhanced enforcement powers in respect of illegal gambling businesses and black market activities. This will also ensure that the legal foundation is strengthened, thereby providing prosecutors with improved tools against unlicensed gambling and, at the same time, protecting consumers from unregulated operators that do not have proper safeguards in place for them.
The regulatory framework has expanded beyond current gambling markets and encompassed emerging economic zones, such as Colombo Port City, thereby demonstrating a farsighted approach to economic development. This further elaborates that the modern regulation of gambling must necessarily include special economic zones and international business districts which could attract foreign investment as well as cross-border operations.
The digital and cross-border gambling provisions are based on the understanding that today’s gambling markets transcend national borders via online operations and international alliances. It thus furnishes the necessary regulatory mechanisms to address such complex jurisdictional issues while ensuring effective supervision.
Political Willingness Advances Implementation of Reforms
This has gained approval from the Cabinet on 21st April 2025 after clearance by the Attorney General; it signals strong political will for the reform initiative. The bill is now set to be formally tabled in Parliament, which has optimistic prospects for its passage.
The leading National People’s Power party maintains a commanding parliamentary majority with 159 out of 225 seats. It corresponds to solid political backing for the President’s reform agenda. In such a secure position, there is little uncertainty about the passing of legislation, and hence appropriate implementation plans can be made.
The changes align with President Dissanayake’s broader governance objectives, which he has emphasized in his efforts to combat corruption and reduce organized crime. Placing the regulation of gambling in the hands of independent authorities, along with requirements that their operations be fully compliant, supports these objectives, potentially reducing the criminal exploitation of gambling platforms.
Regional Setting and Global Concern
The modernization of regulation in Sri Lanka reflects broader trends within the region, as Asian jurisdictions adopt or adapt laws related to gambling to ensure that such laws align with the current realities of the market. Other similar initiatives, particularly in India and more specifically Karnataka state reforms, along with Japan’s evolving regulatory framework also demonstrate how, at a regional level, there is recognition of the importance—economic and social—of gambling regulation.
International industry players have shown interest in Sri Lanka’s reform process. For instance, Sportradar has identified the long-term potential of this market following the modernization of regulations. This international attention implies that successful implementation would lead to foreign investments and expertise, further developing the market.
Economic and Social Objectives as Drivers of Reform Strategy
The broad change plan meets many state aims like more tax money, better buyer safety, and reduced criminal behavior. These linked goals need smart rules that can balance business needs with public interests.
The player protection gaps that have historically existed in our legislation are being covered by the proposed legislation to include responsible gambling consumer protection measures. This essentially means that the current provisions have adopted improved international standards and are more inclined toward sustainable industry development, not just revenue generation.
The anti-money laundering protocols and financial compliance requirements reflect how the gambling sector can be exploited criminally while supporting the broader objectives of financial sector integrity. These establish a credible regulatory reputation of Sri Lanka in international partnerships.
Implementation Timeline and Future Prospects
Parliamentary consideration will take place through detailed scrutiny and possible amendments before the final voting. This is strongly supported politically to be passed on time. However, administrative preparation and stakeholder engagement are equally important in its implementation.
Thus, upon the enactment of the Gambling Regulatory Authority Act, these provisions will provide a solid legal basis for the comprehensive transformation of the industry through operator licensing, as well as monitoring, compliance, and enforcement activities. In this respect, both resources and expertise are required for effective regulatory operations.
The success of the reform will be determined by how well it balances the interests of multiple stakeholders with the government’s objectives of increased revenue, enhanced consumer protection, and reduced illegal activity. This could position Sri Lanka as a leading regulator in the gambling industry within the region, provided it supports the sustained growth of the industry alongside social responsibility objectives.
