Sri Lanka legalises online betting, targets grey market
Sri Lanka’s new Gambling Regulatory Authority (GRA) is to bring online betting onboard under a structured, high-tax legal framework in a state of rapid transition from an unregulated “grey market”.
Online betting is now legally recognised under the Gambling Regulatory Authority Act, No. 16 of 2025, a senior Finance Ministry official told the Sunday Times Business.
He added that the new authority aims for full operational status by June 30, 2026, acting as a “one-stop shop” for all gambling activities except state lotteries. While the GRA is still in the process of formalising all the licences, established online betting sites like STBet continue to lead the way in the local digital space.
Despite the new laws being put in place, it is confirmed by the authorities that an estimated 60 to 70 per cent of the total number of Sri Lankan punters, the majority of the youth population, continue to use illegal offshore sites such as bet365, Betway, and 1xBet.
According to Inland Revenue Department, the Gross Collection Levy for betting businesses increased from 15 to 18 per cent for monthly collections exceeding Rs. 1 million.
The government also seeks to capture a substantial percentage of the gaming industry’s market value, which was projected to be more than Rs. 123 billion by 2026. Sri Lanka is competing to become “India’s Macau,” using the luxury integrated resorts such as the $1.2 billion City of Dreams in Colombo to boost its associated betting and tourism revenue.
Operating without a valid Digital Gambling License attracts a penalty of up to Rs. 10 million or two years of imprisonment. Promoting unlicenced gambling or targeting individuals under 18 years old is strictly prohibited under the 2025 Act.
New laws mandate that all licenced software include self-exclusion tools and spending limits to combat gambling addiction. The landscape of cricket betting in Sri Lanka has also seen a massive shift with the implementation of the new Act.
“With the new law in place, online cricket betting is now legal if the platform has a specific digital gambling license from the newly formed Gambling Regulatory Authority,” a senior official of the Inland Revenue Department said.
The new levy is: Annual Fixed Levies (Bookmakers): Internet/Agent-based: Rs. 5 million per year and Live Telecast use: Rs. 1 million per year.
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