Sri Lanka has doubled the entry fee charged to local gamblers, with a new law effective from 1 January raising the casino entry levy from US$50 to US$100 for residents. The measure applies to all casinos and gaming halls operating in the country and forms part of a broader package of fiscal changes targeting the gambling sector.
The increase follows earlier tax adjustments approved by parliament in December, which amended the Betting and Gaming Levy Act of 1988. Together, the changes signal a more assertive approach to monetising a gaming industry the government increasingly views as a stable source of revenue.
Higher levies and expanded tax scope
Under guidance issued by the Inland Revenue Department of Sri Lanka, gaming venues are required to collect a Casino Entry Levy of US$100, or its equivalent in Sri Lankan rupees or another convertible currency, from Sri Lankan citizens entering gaming premises.
Separately, lawmakers raised the gaming tax rate from 15% to 18% for operators generating monthly gross revenues exceeding Rs 1 million (approximately US$3,200). The higher rate applies across the sector, including bookmakers, and took effect following legislation introduced in May 2025.
Industry growth underpins fiscal confidence
The tax hikes come against the backdrop of a gaming market that continues to expand. Industry projections estimate that Sri Lanka’s gaming sector could generate around US$410 million in revenue in 2026, up from roughly US$240 million in 2020. Analysts expect compound annual growth of about 5.4% through 2031.
Local media have framed the policy shift as part of a broader effort to widen the tax base, with gambling identified as a sector capable of delivering stronger fiscal contributions. That confidence is closely tied to the opening of City of Dreams Sri Lanka in Colombo last year.
The integrated resort is a joint venture between John Keells Holdings and Melco Resorts & Entertainment. Positioned to attract visitors from India, China, Southeast Asia and the Middle East, the property aligns with government ambitions to boost tourism arrivals. Reuters has reported that Sri Lanka is targeting three million tourists this year, up 27% compared with 2025.
Melco chairman and chief executive Lawrence Ho has described the resort as a marker of Sri Lanka’s potential as a global tourism destination, drawing comparisons with Macau’s role for mainland China.
Regulatory framework continues to take shape
To support the sector’s expansion, Sri Lanka is also preparing to launch its first dedicated Gambling Regulatory Authority, which is expected to be operational by 30 June. The body will be tasked with overseeing licensing, compliance, and enforcement across a market that has historically operated with limited formal supervision.
What it means for the market
For operators, the higher entry levy and increased gaming tax translate directly into higher costs for domestic-facing business. While premium integrated resorts may be insulated by foreign visitor demand, local-focused casinos could see pressure on volumes as entry becomes more expensive for residents.
For the government, the measures reinforce gambling’s role in post-crisis fiscal recovery. The levies are designed to generate predictable revenue at a time when public finances remain fragile following the 2022 debt default and subsequent International Monetary Fund bailout.
More broadly, the combination of higher taxes, a formal regulator, and major integrated resort investment suggests Sri Lanka is moving toward a more structured, revenue-driven gaming model. If growth projections hold, the sector is likely to face closer scrutiny and further policy adjustments as authorities balance investor appeal with fiscal and social considerations.