Editorial

If there is one industry that has developed over the last fifty years, it is the gaming industry. From the old slot machines known as ‘one-armed bandits’ that were available in the odd boutique in the main towns to the introduction of Blackjack and Roulette tables with the opening of the economy in the post-1977 years, the growth of that segment, and the already prevalent ‘Turf Clubs’ (an euphemism for betting on horse races in England and elsewhere), the spread is clearly evident.

Sometime in the 1990s, in an angry reaction to influence-peddling by a Singaporean gaming investor, the then President ordered a total ban on casinos and the public display of their equipment steam-rolled. But there were those who had learnt the art and saw the big bucks behind what was becoming a booming business, which recommenced with the assassination of the President.

The business mushroomed mainly in the metropolis and was in the hands of a few select individuals who made it big. It was a ‘laissez-faire’ business, and regulations were limited to a mere licensing fee. Soon, the nexus between casino-bank-real estate was established in textbook money laundering, resulting in even the EU placing Sri Lanka on a ‘grey list’ for weak AML (Anti-Money Laundering) measures.

As recently as in 2014, when the then Rajapaksa Government tried to bring in Australia’s richest man, gambling tycoon James Packer, and his Crown Resorts chain, there was a howl of protests inside Parliament and outside by those in Government and Opposition today, though on opposite benches at the time. That USD 400 million mixed development project and two similar projects worth over USD 1.2 billion were castigated as a ‘casino-prostitution’ project and shot down.

The entire lot—both in Government and Opposition—have not only been silent 11 years later but also showed their support for the new venture with either their total silence or their presence at its glitzy opening last weekend. It is almost the same investment of USD 1.2 billion, with the new owner being promoted as ‘the gold standard’ in the business.

What made the politicians across the board, and even the once vociferous clergy, zip up? It could be the reality that the country cannot be preaching moral values on empty stomachs. The 2020 pandemic and the national bankruptcy that followed haunt this nation. A practical approach to modern life, even if converting the capital to a ‘sin city’ has to do away with the pretence of being a thrice-blessed holy land.

The local agent of the mega project said that a ‘robust regulatory framework’ was a prerequisite for the gaming industry and welcomed the formal licensing of gaming in Sri Lanka. The laws promulgated in 2023, viz., the Betting and Gaming (Amendment) Act, were claimed to have ‘raised the bar for the industry’, implying clearly that the bar was low till then. But the amendment only defined the terms like ‘bookmaker’ and ‘gaming’ and allowed registered companies to engage in the business.

That positive view is not shared universally. A Gambling Regulatory Bill was introduced to further strengthen the 2023 law but was never passed by Parliament. It was half-baked anyway, and many asked that Sri Lanka introduce a law in line with the Singaporean regulatory mechanism after that city-state did an about-turn of its own on casinos. Its prime minister read out a 14-page statement to the country’s parliament explaining the measures being taken to minimise the social impact on the country following the introduction of casino gambling. There’s none of that in Sri Lanka.

The proposed regulatory authority for Sri Lanka has not happened. According to the draft, it was going to be a mere proxy for the Finance Minister, who would give it directions which had to be followed. It was meant to replace the toothless Betting and Horse Racing Ordinance and the Casino Business (Regulations) Act of 2010, but with the minister having the powers to direct the Authority, it was to be toothless itself. It lacks supervision of not only lotteries but also online gambling and is weak on revenue oversight and penalties.

With such a regulatory authority not being in place, it is a case of ‘the cart (casinos) before the horse (regulatory mechanism)’—as the wheels of fortune will be spinning away with anticipated high-rollers towards a ‘new era of economic and tourism growth’, as the promoters of the new age promise.

Going along with Trump’s tariff circus

Last week’s front page of this newspaper referred to the imposition of 20 per cent tariffs on Sri Lanka’s exports to the United States. In unleashing what was a worldwide exercise, the man behind the desk in the Oval Office in Washington was enjoying having the whole world at his feet—like schoolboys around the master’s desk humouring him to get good marks on their report cards.

The story mentioned that Sri Lanka had agreed to a string of concessions in return for what appeared to be a favourable 20 per cent (when compared to an earlier 44 and then 30 per cent), though a UN calculation shows a trade-weighted average tariff to be 28.8 per cent (see page 7 for story). What these quid pro quos were is not available. In a lengthy statement to Parliament on the state of the economy on Thursday, the President made only a passing reference to the tariff negotiations, saying they were not concluded and that the Government was trying for a still better deal. He gave no information on what concessions were on the table.

Most other nations have been up-front about their negotiations with the US, keeping their people informed. India has been in the front line with transparency. One might say it has something to do with its newfound confidence in being declared the fourth largest world economy. When the US President mixed geopolitics with trade and threatened to slap India with a penalty for buying Russian oil, India made a public statement saying it “will take all necessary measures to safeguard its national interest and economic security”—its proclaimed ‘strategic autonomy’.

Clearly not accustomed to being dealt such a thump on the nose, the US President reacted with a hefty total 50 per cent tariff on India. So much for India’s bhai-bhai relations with the US, which it had aggressively pursued in recent years.

One-time US Secretary of State Henry Kissinger is famously quoted as having said, “It may be dangerous to be America’s enemy, but to be America’s friend is fatal.” Ask Ukraine. For Sri Lanka, till it finds alternative markets, or geopolitics takes a turn, it will have to simply ‘go along’ with the tariff circus.