Sri Lanka Makes Casinos Pay More

Sri Lanka’s government is moving forward with significant changes in its gambling laws. As part of the 2025 budget, the Cabinet has approved a proposal to increase the betting and gaming levy and double the casino entry fee for Sri Lankan citizens. These amendments are intended to strengthen state revenue, tighten regulation, and align the gambling sector with the government’s post-crisis economic objectives.

Currently, bookmakers and gaming operations are taxed under a “gross collection levy” at 15%. The proposal would raise that rate to 18%, applying to the total turnover or receipts of betting and gaming businesses. In parallel, the fixed fee for Sri Lankan locals to enter casinos would increase from US$50 to US$100.

Parliament must pass these changes after being published in the Government Gazette. The draft bill amending the Betting and Gaming Levy Act has already drawn clearance from the Attorney General.

Officials say the move comes in response to Sri Lanka’s severe fiscal pressures. Following an economic collapse in 2022 marked by runaway inflation, debt distress, and external bailouts, the government is under pressure to raise revenue and stabilize its public finances. Gambling and casinos are seen as high-potential areas for revenue due to growing tourism and recent large-scale casino developments.

The opening of City of Dreams Sri Lanka in Colombo in August 2025 is a landmark in this strategy. Operated by Melco Resorts in partnership with Sri Lankan firms, this integrated resort is part of the government’s drive to attract higher-spending tourist traffic, especially from neighbouring India and other parts of Asia. Higher gaming levies and entry fees are seen as part of the broader scheme to ensure the country benefits more from this emerging sector.

Some stakeholders are supportive. They argue that increasing levies on betting and gaming businesses, and raising entrance fees for locals, are logical steps where the private sector is large and growing. The Gambling Regulatory Authority (GRA), established recently under new legislation, is expected to oversee regulation, licensing, revenue collection, and responsible gambling practices. Greater oversight, they say, will help ensure the gaming industry contributes fairly and transparently to the country’s recovery.

However, there are critics too. Doubling the entry fee for locals may reduce local casino patronage, discourage frequent visits, or shift more business toward foreign tourists—something Sri Lankan operators and tourism promoters must balance carefully. Some warn that steep fees could also push gambling to unregulated spaces or online alternatives if people find the costs prohibitive.

Moreover, while revenue from gaming can help, the sector also has social risks: problem gambling, money laundering, and regulatory enforcement are real concerns. How the GRA handles compliance, transparency, and consumer protection will determine whether these changes are broadly beneficial or mostly burdensome to locals.

Implementation depends on Parliament approving the amendments. Once approved, they will alter the legal framework governed by the Betting and Gaming Levy Act. Operators will need to adapt to the higher tax environment and potentially adjust their marketing, pricing, or customer targeting strategies accordingly. Locals, meanwhile, will face a more expensive entry fee to casinos.

Sri Lanka’s decision to hike gaming levies and raise entry fees for local casino goers reflects its urgent need to boost revenue amid economic stress, alongside an effort to build more robust regulatory oversight. How this will impact the balance between domestic patronage, foreign gambling tourists, and social responsibility remains to be seen. These reforms indicate that betting and casinos are no longer peripheral to Sri Lanka’s fiscal strategy, but are now front and centre.