By: Staff Writer
January 06, Colombo (LNW): Sri Lanka’s gambling and casino industry is entering the new year under a significantly tougher tax regime, as sweeping amendments to the betting and gaming tax laws took effect on 1 January 2026. The Inland Revenue Department (IRD) confirmed that changes under the Betting and Gaming Levy (Amendment) Act, No. 25 of 2025 – revising the older Betting and Gaming Levy Act, No. 40 of 1988 – aim to boost state revenue by levying higher costs on both local players and industry operators.
Under the updated law, the Casino Entrance Levy (CEL) – a fee that must be collected from Sri Lankan citizens entering licensed gaming venues – has been doubled from US $50 to US $100 per entrant. The notice specifically states that all licensed casino operators must collect this levy in either foreign currency, its equivalent in Sri Lankan rupees, or another convertible currency from local citizens visiting the gaming floors. Operators must implement this new fee structure from the start of 2026 without exception.
In another major change, the Gross Collection Levy, which is charged on a casino’s total monthly receipts, has been raised from 15 % to 18 %. This increased rate applies to all bookmakers and gaming businesses whose gross monthly collections exceed Rs. 1 million, representing a marked rise in the tax burden on operators in what is already one of Sri Lanka’s most scrutinised sectors.
According to industry data and market listings, Sri Lanka is home to about 13 licensed land-based casinos, with the bulk concentrated in and around Colombo and a few in cities such as Wattala and Wennappuwa. Among the better-known establishments are Bally’s Casino Colombo, Bellagio Colombo, Casino Marina, Majestic Pride Lanka, Ballys Breeze, Sporting Times outlets, and MGM Casino. These venues offer a range of table games, poker, slot machines and often combine entertainment with bars and dining to attract both tourists and local high-rollers.
In addition to these traditional brick-and-mortar casinos, Sri Lanka’s gaming landscape is in the midst of transformation. Last year saw the launch of City of Dreams Sri Lanka, the country’s first integrated casino resort developed through a joint venture between John Keells Holdings and Hong Kong’s Melco Resorts & Entertainment. This multimillion-dollar complex in Colombo Port City is designed to attract high-end international tourism with luxury hotels, shopping, entertainment and extensive gaming facilities.
Despite this growth, regulation remains a topic of debate. The government announced plans to establish a Gambling Regulatory Authority (GRA) by mid-2026 to oversee all gambling land-based, ship-based, and online except traditional lotteries and social games. This authority is intended to standardise licensing, enforce compliance, curb money-laundering risks and streamline
While land casinos operate under clear licences, the online gambling space remains largely unregulated, with offshore platforms widely accessed by Sri Lankan players in a legal grey area. The new regulatory framework seeks to clarify these operations and pull more revenue from digital betting activity.
Government officials say the tax hikes are part of broader efforts to widen the tax base and help stabilise public finances following years of economic challenges. However, the industry faces criticism from some quarters over the social impact of gambling and its heavy tax burden, particularly on local players.
As the sector adapts to the new levy regime, both operators and patrons are closely watching how these changes will affect casino footfall, tourism appeal and long-term investment in Sri Lanka’s burgeoning gaming and leisure market.
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