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LK

Is Gambling Legal in Sri Lanka?

Partially Regulated
Land-based casinos and betting are regulated and licensed; online gambling remains largely unregulated and untaxed.
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    Key Information Highlights Legislation Timeline Requirements Sources

    Key Information

    Last Update 2025
    Regulatory Authority Ministry of Finance
    License Cost Varies

    Regulation by Activity Type

    Casinos Regulated
    Online Casinos Regulated
    Betting Regulated
    Online Betting Unregulated
    Lotteries Regulated
    Poker Regulated

    Highlights

    • The Betting and Gaming Levy Act No. 40 of 1988 is the primary law governing gambling in Sri Lanka.
    • Casino operators must obtain a government-issued license, with unlicensed gambling strictly prohibited.
    • The Casino Business Licensing Regulation No. 1 of 2022 introduced a five-year license costing LKR 500 million.
    • The Ministry of Finance is the main regulatory authority overseeing gambling compliance and licensing.
    • Recent proposals aim to raise the corporate income tax on gambling profits from 40% to 45%.
    • Stricter casino licensing now requires minimum investment thresholds and enhanced compliance checks.
    • The minimum legal gambling age is 18, and licensed venues must verify customer age before entry.
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      Legislation

      Primary Legislation

      The primary legislation governing gambling in Sri Lanka is the Betting and Gaming Levy Act No. 40 of 1988. This Act establishes the legal framework for the regulation of betting and gaming activities, setting out strict guidelines for casino operators and betting establishments. The Act has been amended several times to reflect evolving government policies and societal concerns. Its provisions include the requirement for government-issued licenses for casinos and betting operators, and it explicitly prohibits unlicensed gambling activities. The Act also outlines the imposition of levies and regulatory oversight mechanisms for the gambling sector.

      Regulatory Authority

      Currently, the regulation and oversight of gambling activities in Sri Lanka fall under the purview of the Ministry of Finance, which is responsible for enforcing compliance with the Betting and Gaming Levy Act and issuing relevant directives. However, recent government decisions have initiated the process to establish an independent Gambling Regulatory Authority. Cabinet approval has been granted for the drafting of new legislation to create this authority, which will have a broad mandate to oversee gambling institutions, regulate tax collection, and minimize social harm. Until the new authority is formally established and the draft bill is enacted, the Ministry of Finance remains the primary regulatory body.
      • Oversight and enforcement of gambling legislation
      • Issuance of directives for compliance with the legal framework
      • Drafting and development of new regulatory structures for the sector

      License Types

      Types of Gambling Licenses in Sri Lanka

      • Land-Based Casino Licenses: Sri Lanka currently issues licenses exclusively for land-based casino operations. There are no licenses available for online casino operations at this time.
      • Integrated Resort Casino Licenses: Special licensing provisions exist for casinos operating within large-scale integrated resort developments, subject to higher investment and fee requirements.

      Application Process and Procedures

      • Application Submission: Prospective operators must submit a formal application to the designated regulatory authority, as stipulated by the Casino Business Licensing Regulation No. 1 of 2022.
      • Existing Operators: Existing casino operators were required to apply for a license within 60 days of the introduction of the 2022 regulations.
      • Designated Areas: Casino operations are permitted only in areas specifically designated by the relevant Minister.
      • Documentation: Applicants must provide comprehensive business and financial documentation, proof of minimum investment, and details of ownership and management.
      • Approval Process: Applications are subject to regulatory review, including assessment of financial capability, integrity of owners, and compliance with investment requirements.

      License Duration, Renewal, and Eligibility

      • License Validity: Standard casino licenses are valid for five years. In some cases, especially for large integrated developments, licenses may be issued for up to 20 years.
      • Renewal Procedures: Applications for renewal must be submitted at least six months prior to license expiry. Renewal is contingent on continued compliance with regulatory requirements and payment of renewal fees.
      • Eligibility: Only entities meeting the minimum investment thresholds and compliance standards set by the authorities are eligible for licensing.

      Licensing Costs, Fees, and Financial Requirements

      • Standard Casino License Fee: The fee for a new license or a five-year renewal is Sri Lankan Rupees 500 million (approximately $1.5 million for five years).
      • Increased Fees for Major Casinos: Recent amendments require existing casinos to pay approximately $31 million for a 20-year operating license renewal, structured as $1.5 million for the first five years and $4.7 million over the remaining 15 years.
      • Integrated Development Minimum Investment: New casino licenses in integrated developments require a minimum investment of $30 million or $100 million, depending on the scale of the project.
      • Large-Scale Integrated Resorts: Projects with investments exceeding $500 million must pay a casino license fee of $15.5 million.

      Key Requirements for Obtaining and Maintaining a License

      • Minimum Investment: Applicants must demonstrate the ability to meet the minimum investment thresholds as specified by the regulations.
      • Operational Area: Casinos must operate only within designated zones authorized by the government.
      • Compliance: Licensees must adhere to all operational, financial, and reporting requirements set by the regulatory authority throughout the license period.
      • Renewal Conditions: Continued compliance with regulations, timely payment of renewal fees, and demonstration of ongoing financial stability are required for license renewal.

      Summary Table: Main Licensing Parameters

      Type License Duration Fee Minimum Investment Renewal
      Standard Casino 5 years LKR 500 million (~$1.5 million) $30–100 million (project dependent) 6 months before expiry
      Existing Major Casinos 20 years $31 million (structured) As per regulation Structured over 20 years
      Integrated Resort (>$500M) Varies $15.5 million $500 million+ As per agreement

      Gambling Tax

      Tax Rates for Gambling Operators in Sri Lanka

      Type of Gambling Operation Tax Rate / Levy Basis of Taxation
      Casinos (Licensed) - Annual license fee: LKR 500 million (approx. USD 1.5 million) per 5-year period - Additional annual levies and taxes as prescribed in the Betting and Gaming Levy Act and recent budgets - Fixed annual licensing fee - Additional levies may be based on turnover or gross gaming revenue, subject to periodic government updates
      Betting Establishments - Subject to annual licensing fees and betting levies - Specific rates periodically updated by the Ministry of Finance - Typically based on turnover or fixed annual amounts
      Online Gambling Operators - No formal tax structure currently; interim measures under discussion - Online gambling operations are considered illegal under current law, but authorities are moving to tax these activities pending new regulations - Interim tax proposals; not yet formalized

      Basis for Taxation

      • For land-based casinos and betting operators, the primary basis for taxation is a combination of fixed annual licensing fees and levies that may be calculated on turnover or gross gaming revenue, depending on government directives and periodic budget reforms.
      • Recent budgets have introduced or increased specific levies, such as doubling the casino entrance fee for locals, but the main operator tax remains the annual license and associated levies.
      • Online gambling is not formally regulated or taxed, but interim taxation measures are being considered as authorities acknowledge the existence of such operations.

      Tax Reporting and Payment Requirements

      • Licensed gambling operators are required to pay the prescribed annual licensing fee upfront for the license period (typically five years for casinos).
      • Additional levies and taxes must be reported and paid to the Inland Revenue Department according to schedules set by the Ministry of Finance, often on an annual or quarterly basis.
      • Operators must maintain accurate records of all gaming and betting transactions for audit and compliance purposes.
      • Failure to comply with tax payment or reporting requirements can result in penalties, suspension, or revocation of licenses.

      Tax Incentives, Exemptions, and Special Provisions

      • There are currently no widely publicized tax incentives or exemptions specifically for gambling operators in Sri Lanka.
      • All licensed operators are subject to the same tax rates and payment obligations as stipulated by the Betting and Gaming Levy Act and subsequent regulations.
      • Special provisions or changes to tax rates are typically announced in the annual national budget and may be subject to rapid revision depending on fiscal policy needs.

      Additional Notes

      • The Sri Lankan government is actively reforming gambling taxation and regulation, with new legislation and a dedicated Gambling Regulatory Authority under development. Operators should closely monitor official announcements for potential changes to tax obligations.
      • Online gambling taxation is in a transitional phase, with interim measures under discussion and a formal framework expected in the near future.

      Prohibited Individuals

      Age Restrictions and Identification Requirements

      The minimum legal age to participate in gambling activities in Sri Lanka is 18 years. Licensed gambling establishments are required to verify the age of all customers before allowing entry or participation in any gambling activity. This age verification typically involves checking valid identification documents to ensure compliance and prevent underage gambling.

      Prohibited Activities and Game Restrictions

      • Unlicensed gambling is strictly prohibited. Only government-licensed casinos and betting establishments may legally offer gambling services.
      • Online gambling operations based in Sri Lanka are considered illegal. Physical casino licenses do not cover online operations, and any such activities are prohibited.
      • Certain forms of gambling, such as cockfighting and other activities defined as "unlawful gaming," are explicitly banned and subject to criminal penalties.

      Advertising and Marketing Limitations

      • Advertising and marketing of gambling services are subject to restrictions aimed at minimizing social harm and protecting vulnerable groups, particularly minors.
      • Promotional materials must not target individuals under the legal gambling age or depict gambling as a means to financial success or personal achievement.
      • Marketing communications are required to include clear information about age restrictions and responsible gambling messages.

      Responsible Gambling Requirements and Player Protection Measures

      • Licensed operators must implement responsible gambling policies, including providing information on the risks of gambling and resources for individuals seeking help with problem gambling.
      • Casinos and betting venues are required to display responsible gambling signage and offer self-exclusion programs for players who wish to restrict their own access to gambling activities.
      • Staff are expected to be trained to identify signs of problem gambling and to intervene appropriately when necessary.

      Geographic and Location Restrictions

      • Licensed casinos are permitted to operate only in designated areas, primarily within major cities such as Colombo. The establishment of gambling venues is subject to location-based restrictions to limit their accessibility and mitigate social risks.
      • Entrance fees for local residents are imposed as an additional barrier, with recent measures doubling the fee for locals to discourage frequent participation by residents.
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        Timeline

        Year/Date Event
        1889 Gaming Ordinance No. 17 of 1889 enacted, establishing the first legal framework for gambling and making "unlawful gaming" an offense in Sri Lanka.
        1983 Betting and Gaming Levy Act No. 40 of 1983 introduced, imposing levies on betting and gaming activities and further regulating the industry.
        1988 Betting and Gaming Levy Act No. 40 of 1988 enacted, updating and strengthening the regulatory framework and taxation for gambling operations.
        2010 Casino Business (Regulation) Act No. 17 of 2010 passed, providing a legal basis for casino regulation, although no implementing regulations were issued at the time.
        August 2022 Casino Business Licensing Regulation No. 1 of 2022 published, introducing a comprehensive licensing regime for casinos and giving effect to the 2010 Act for the first time.
        February 2024 Stricter regulations on casino licensing implemented, including the introduction of minimum investment thresholds for operators.

        Requirements

        Software Certification and Technical Standards

        • Gambling operators in Sri Lanka are expected to comply with technical standards for gaming software and hardware to ensure fairness, security, and integrity of games. These standards typically require independent testing and certification of gaming systems, random number generators (RNGs), and payout calculations by recognized testing laboratories.
        • All gaming equipment and software must be capable of audit and monitoring by the regulatory authority, ensuring transparency and traceability of all gaming transactions.
        • Operators must implement robust cybersecurity measures to protect gaming systems from unauthorized access, tampering, or manipulation.

        Data Protection, Privacy Measures, and Server Location Requirements

        • Operators are required to implement strict data protection protocols to safeguard personal and financial information of players, including encryption of sensitive data both in transit and at rest.
        • Systems must include access controls, regular security audits, and monitoring to prevent data breaches and unauthorized disclosures.
        • Operators may be required to host their gaming servers within Sri Lanka or in jurisdictions approved by the regulatory authority to ensure regulatory oversight and data sovereignty.

        Anti-Money Laundering (AML) and Know Your Customer (KYC) Procedures

        • Operators must establish and maintain comprehensive AML programs, including automated transaction monitoring systems to detect and report suspicious activities.
        • Mandatory KYC procedures require verification of player identity, age, and source of funds before allowing participation in gambling activities. This typically includes collection and verification of government-issued identification and proof of address.
        • Operators are obligated to maintain records of all player transactions and KYC documentation for a specified minimum retention period, as determined by the regulatory authority.

        Financial Reporting, Auditing Standards, and Record-Keeping Requirements

        • Operators must maintain accurate and up-to-date financial records, including detailed logs of all wagers, payouts, and player account activities.
        • Regular independent financial audits are required to verify compliance with regulatory and financial standards.
        • Operators must submit periodic financial reports and gaming transaction data to the regulatory authority in prescribed formats and within specified timeframes.
        • All records, including player and transaction data, must be securely stored and readily accessible for regulatory review and investigation.

        Technical Implementation Requirements for Responsible Gambling Tools

        • Operators are required to integrate technical tools that promote responsible gambling, such as self-exclusion mechanisms, deposit and loss limits, and reality checks.
        • Systems must allow players to set personal limits on deposits, wagers, and playing time, with enforced cooling-off periods when limits are reached.
        • Responsible gambling features must be clearly accessible to players and function reliably across all platforms and devices.
        • Operators must provide real-time access to responsible gambling resources and support, including links to counseling services and helplines.

        Sources

        Primary Regulatory Authorities

        Contact Information

        • Ministry of Finance, Economic Stabilization and National Policies The Secretariat, Colombo 01, Sri Lanka Phone: +94 11 248 4510 Email: info@treasury.gov.lk
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          Important Information Notice

          Gambling regulations are subject to change. The information provided on this page was accurate at the time of publication, but may not reflect the current regulatory landscape. Always consult official sources for the most up-to-date information before making any gambling-related decisions.

          Last updated: 21 April 2025