Sri Lanka moves to raise casino taxes, double entry fees 

Sri Lanka’s Cabinet has approved a proposal to hike gaming taxes and double casino entry fees for locals. The measure now heads to Parliament for debate and final approval.

Under the bill, the gross gaming revenue tax would rise to 18% from the current 15%, while the entry fee for Sri Lankan nationals at casinos would jump from $50 to $100.

Cabinet spokesman Nalinda Jayatissa said the Attorney General has cleared a draft bill to amend the Betting and Gaming Levy Act to implement these changes, Economy Next reported. The bill will be published in the government gazette before being sent to Parliament for approval.

The Betting and Gaming Levy Act sets the tax rates for bookmakers and gaming businesses in Sri Lanka. This move follows the recent passage of the Gambling Regulatory Authority Bill, which created the Gambling Regulatory Authority to oversee gambling revenue, enforce transparency, and curb illegal betting.

Officials said the new levies are aimed at replenishing state coffers still recovering from the country’s 2022 economic crisis.

According to the Sri Lanka Financial Times, the tax increase is expected to generate significant revenue following years of fiscal strain. In 2022, Sri Lanka endured 50% inflation and sought a $600 million World Bank bailout, followed by a $3 billion loan from the International Monetary Fund in 2023.

The World Bank has described the country’s subsequent austerity measures as “one of the largest fiscal adjustments in its history,” equal to nearly 8% of GDP over three years.

“Sri Lanka has largely stabilised its economy,” observed World Bank Division Director David Sislen. “The challenge now is to get better results from every rupee collected and spent. This means modernising tax administration, focusing on direct taxes and making sure public spending is both efficient and fair.”

The tax hike comes just weeks after the opening of City of Dreams Sri Lanka, a $1.2 billion integrated casino resort in Colombo. Backed by Melco Resorts and John Keells Holdings, the property is South Asia’s first of its kind and aims to attract high-spending tourists from India and beyond.

Executives behind the project say it could transform Sri Lanka’s tourism sector much like Marina Bay Sands and Resorts World Sentosa did for Singapore after their 2010 openings. “The big opportunity for Sri Lanka is outbound tourism from India,” said John Keells CEO Krishan Balendra, noting Indian travelers already account for about 20% of arrivals.

City of Dreams is being billed as South Asia’s first integrated resort, a distinction Melco CEO Lawrence Ho believes positions it to attract visitors from India, Southeast Asia, and the Middle East. Ho projects the property could eventually generate $250 million in annual gross gaming revenue.

“Singapore has Marina Bay Sands. Macau has a lot of integrated resorts,” he said. "But within this region, being as close to India and [its] 1.4 billion people, it just simply doesn’t exist.”

President Anura Kumara Dissanayake has set a target of increasing global tourist arrivals by 50%, with casinos playing a key role in luring high-rolling travelers from India and China.

Tourism currently accounts for around 4% of Sri Lanka’s GDP, and officials hope new gaming revenues will provide both fiscal relief and fresh foreign investment.