As result of a new law that took effect 1 January, it will cost gamblers who are residents of Sri Lanka US$100 to enter and play at casinos or other gaming halls in the country. That’s double the previous rate of $50.
In addition, last year Parliament increased the gaming tax from 15% to 18% for all operators including bookmakers who reap monthly gross revenues of more than Rs 1 million ($3,226).
Per the Inland Revenue Department, all such operations “shall collect a CEL [Casino Entry Levy] of $100 or its equivalent in any other convertible foreign currency or in Sri Lankan currency from a Sri Lankan citizen who enters into such a place of business”.
The rate hikes, introduced in May 2025 and passed in December, amend the Betting and Gaming Levy Act of 1988.
Gaming industry on the upswing
The tax increases may be interpreted as a vote of confidence in the gaming industry, which is projected to generate $410 million in 2026, up from $240 million in 2020. According to the Daily Mirror, gaming “has been identified as a key area for enhanced fiscal contribution” as the government seeks to broaden the tax base. Industry analysts expect a compound annual growth rate of 5.4% through 2031.
No property exemplifies that potential like City of Dreams Sri Lanka, which opened last year in the port city of Colombo. The integrated resort, a joint project of John Keells Holding and Melco Resorts International, targets patrons from India, China, Southeast Asia and the Middle East, all within four hours’ travel by air. Reuters reports that Sri Lanka hopes to draw 3 million tourists this year, up 27% from 2025.
Melco Chairman and CEO Lawrence Ho has called City of Dreams “a symbol of possibility and a celebration of Sri Lanka’s potential as a world-class destination”. He predicts Sri Lanka “can be to India what Macau is to China”.
To oversee the developing industry, Sri Lanka’s first Gambling Regulatory Authority will be up and running by 30 June.
Sri Lanka post-crisis recovery is ongoing
The new levies will help refill government coffers depleted during the 2022 economic crisis. That year, for the first time in its history, the government of Sri Lanka declared bankruptcy and defaulted on its foreign debt. Inflation soared to more than 50%. Shortages of fuel and food caused widespread poverty and nationwide protests.
In 2023, the International Monetary Fund stepped in with a multibillion-dollar bailout. Since then, the economy, though still fragile, has stabilised. Last year, the government projected growth of 3.1% for the new year. But in the aftermath of Cyclone Ditwah in November, the IMF trimmed that estimate to 2.9%.
Marjorie Preston
Marjorie began her gaming career in 2007 and has focused on Asian gaming markets since 2020. Outside of work, she writes about travel and film and plays the drums.
With the start of the new year, Sri Lanka has increased its casino entry levy and raised the gaming tax.