Colombo, Sri Lanka – On September 18, 2025, the Sri Lanka parliament rejected a significant amendment to increase casino levies and double local entry fees, part of the government’s 2025 budget measures aimed at enhancing state revenue. The proposal sought to raise the gross gambling revenue levy from 15% to 18% and increase casino entry fees for Sri Lankan citizens from $50 to $100.
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Despite prior cabinet endorsement and clearance by the Attorney General, the bill failed to secure parliamentary consent, casting uncertainty over the government’s fiscal adjustment plans amid ongoing economic recovery efforts.
Minister Nalinda Jayatissa expressed disappointment over the setback, emphasizing that “this opportunity to strengthen fiscal resources and regulatory oversight in the rapidly expanding gambling sector was not seized.” His statement underscores concerns about meeting revenue forecasts and maintaining regulatory coherence going forward.
The amendment aimed to revise the Betting and Gaming Levy Act, which governs taxation on casino operations and fixes entry fees for patrons. Its rejection halts planned increases in levies and fees, despite the recent enactment of the Gambling Regulatory Authority Act No. 17 of 2025, which created a new regulator for licensing and compliance of gambling activities. This parliamentary decision introduces legal uncertainty, complicating the enforcement of both fiscal and regulatory reforms outlined in the 2025 budget.
Economically, the failure to raise levies could hinder the government’s ability to meet International Monetary Fund (IMF) targets to increase tax revenue to 15% of GDP from the previous 7.3%. This may prolong fiscal imbalances and strain state finances, while challenging casino operators balancing affordability for locals and engagement with foreign tourists. The decision represents a notable obstacle to capturing immediate additional revenue from the growing gambling sector. As Colombo faces this legislative impasse, the government’s fiscal reform momentum is at a crossroads, with alternative strategies needing swift deployment to sustain economic recovery and ensure regulatory effectiveness.
