News
Gambling law: Spinning the wheel to introduce a regulator only in name
View(s):By Namini Wijedasa
Sri Lanka is poised—finally—to introduce a Gambling Regulatory Authority law likely to be passed before international casino giant, Melco, ceremonially opens its glittering doors in Colombo next month.
And if the objective is to install a non-independent regulator who is a proxy for the Minister of Finance, the government’s proposed Gambling Regulatory Authority Act fits the bill. The law is so weak, says one expert who studied it, that it should be withdrawn and a new one introduced in its stead.
“We argue that gambling is in human nature, so it will happen whether or not you ban it,” said Sudaraka Ariyaratne, a Research Consultant at Advocata Institute, a Colombo-based think-tank. “The best the government can do is to introduce a regulator, which is what Singapore and other countries have done, to ensure whatever the ill effects that might emanate from casinos—be it money laundering or addiction—are moderated.”
“If you look at the theory of regulation, it is very clear that the regulator has to be an independent body which gives credibility,” he continued. “That is not the case with this Gambling Authority Bill.”
Singapore as a role model
Singapore has some of the strongest and most comprehensive gaming laws and regulations in the world. They create a tightly-controlled ecosystem, with a single, powerful regulator (the Gambling Regulatory Authority of Singapore) overseeing all forms of gambling. The framework places heavy emphasis on probity, integrity, and robust social safeguards to minimise harm, particularly to the young and vulnerable.
As recently as 2022, Singapore introduced the Gambling Control Act (GCA) and the Gambling Regulatory Authority of Singapore Act to supplement the Casino Control Act (CCA) of 2006 and the Remote Gambling Act of 2014.
Past Sri Lankan governments have repeatedly cited Singapore’s—which started allowing casinos only in 2005—success with integrated resorts as a reason to introduce the concept to Sri Lanka. But before it went ahead, Singaporean Prime Minister Lee Hsien Loong read out a 14-page statement in Parliament justifying the policy change and outlining comprehensive measures to minimise the social impact of casino gambling. Singapore even set up a national framework to address problem gambling.
A list of excluded persons is maintained by a ‘National Council on Problem Gambling’ under the CCA. A family member can apply to have a relative excluded. The provision for self-exclusion allows a person to voluntarily apply to be excluded. Finally, the authorities can bar individuals, for example, due to financial vulnerability or for law-and-order reasons.
Sri Lanka—which for the longest time permitted casinos and betting centres to operate under the Gaming Ordinance of 1890—has none of these. It was only in 2010 that it passed the Casino Business (Regulation) Act. Even then, it did not issue regulations to give effect to it till 12 years later. Sri Lanka’s approach to gambling has been, at best, shoddy and, at worst, lackadaisical.
Singapore vs Sri Lanka
We compared the proposed Sri Lankan Gaming Authority Bill against all relevant legislation and regulations in Singapore using Google’s flagship AI model Gemini 2.5 Pro.
We found that, while the Sri Lankan Gambling Regulatory Authority Bill is “a positive and necessary step towards creating a modern, centralised regulatory system, it remains a skeletal framework when compared to the comprehensive, multi-layered, and mature regime in Singapore.”
“Its primary shortcomings lie in its weak provisions for regulatory independence, its vague suitability criteria for operators, its profound lack of robust and specific harm-minimisation tools like a comprehensive exclusion system, and its technologically outdated enforcement powers against online gambling,” the analyses states.
“The Bill appears philosophically weighted towards economic promotion and revenue collection, whereas Singapore’s laws, while facilitating a viable industry, are built on bedrock of stringent control and social protection,” it holds.
Sri Lanka falls so short of the ideal that its proposed law does not even come close.
Investor confidence
“I think the government is trying to push this bill through in a rush because Melco is coming next month,” Mr. Ariyaratne remarked. “We think Melco would’ve wanted a regulator in place. When it comes to these big names in the gaming industry, the integrity of the market is a big consideration, given the image of the industry, as a whole. They need to sustain a good reputation so that they can attract good customers to whom integrity is important.”
This means, Melco—a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia—would prefer a regulator to be in place. “Even if it’s not a proper regulator, as long as it gives the perception of integrity, that’s what they are looking for, to engender market confidence.”
“The danger with this bill is that it won’t even give a perception of integrity, if the Minister of Finance can basically do whatever he or she wants,” he pointed out. And in Sri Lanka, the Finance Minister—more often than not—is the President, who wields tremendous power.
Problematic clauses
The lack of independence and the sway the Minister holds over the Regulatory Authority is, indeed, an overarching concern. But it isn’t the only one.
The Minister will hold a sweeping authority to appoint the regulator’s Director General (DG) and board members, issue binding directives, and singlehandedly make regulations.
Section 71 states: “The Minister may give to the Authority in writing, general directions as to the exercise of the powers, performance of the duties and the discharge of functions of the Authority. It shall (italics, ours) be the duty of the Authority to comply with such directions.”
The bill also binds the Authority to furnishing the Minister “in such form as he may require” all its returns, accounts and other information with respect to the property and activities.
Advocata points out, too that, the Authority will have no representation from tourism, exempts the lotteries sector, lacks provisions for online gambling, has weak revenue oversight and inadequate penalties for violations. The think-tank proposes that Authority’s governing board should be subject to approval Constitution Council approval and that the Director-General should be selected through a competitive process like in the private sector.
Additionally, rulemaking power should lie with the Authority, mirroring models like Sri Lanka’s Securities and Exchange Commission Act.
Revenue collection and penalties
“At present, the Inland Revenue Department (IRD) is responsible for revenue collection and they go by what is self-reported by casino operators,” Mr. Ariyaratne said. “They have no way of tracing these incomes.”
The Gambling Authority Bill repeals all other laws related to gaming in Sri Lanka [Betting on Horse-Racing Ordinance, Gaming Ordinance and the Casino Business (Regulation) Act] but for the Betting and Gaming Levy Act. And it has no specific clause related to revenue collection.
This means, says Mr. Ariyaratne, the self-reporting continues: “But we must have a regulator with the teeth and resources which the IRD has time and again proven it does not have. And since this is a very technical area, you need people who can bring something more to the table than what your regular IRD type can.”
The penalty clauses are another concern. As our AI comparison also showed, the penalties prescribed in the Sri Lankan bill “are unlikely to serve as a sufficient deterrent for large, profitable gambling operations.”
“For instance, the penalty for operating without a licence is a fine ‘not exceeding ten million rupees and/or imprisonment’,” it elaborates. “Singapore’s approach is far more robust. Firstly, the fines are significantly higher (e.g., up to Singapore $500,000 for a first offence of unlawful operation under the GCA). Secondly, and more importantly, for serious breaches by casino operators, the penalty can be a percentage (up to 10%) of the operator’s annual gross gaming revenue. This proportionate penalty structure ensures that the punishment scales with the size and profitability of the operation, making it a powerful deterrent that a fixed fine cannot match.”
The Sri Lankan bill’s fixed and relatively low penalties risk being seen by large operators as merely a cost of doing business, it states.
Mr. Ariyaratne says the damage must be fixed in advance of the law being taken up for passing. “If we got through the bill in its current format, it is going to be very difficult to change things down the line,” he warned, strongly. “We will have a regulator in name that is a proxy for the Minister of Finance.”
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!