The draft legislation left out key components that have the opposition in an uproar
Sri Lanka’s proposed overhaul of its gambling sector is facing pushback from lawmakers and financial officials who say the current draft leaves critical loopholes unaddressed. The Gambling Regulatory Authority Act, still under consultation, is intended to set up an independent agency to oversee the country’s growing casino industry. However, key voices are raising concerns about the bill’s failure to include rules for junket operators—agents who bring high-stakes gamblers to casinos, often from abroad.
In a recent session of the Parliamentary Committee on Public Finance, officials from the Central Bank warned that junkets remain outside the current tax and licensing framework. Currently, a limited licensing system exists under the Ministry of Finance, with no effective enforcement provisions in place. Lawmakers fear that this gap could allow junket-related transactions to avoid scrutiny, enabling tax evasion and illicit money transfers.
Globally, junket operators have garnered attention for their involvement in unregulated credit and potential connections to financial crimes. Despite this, Sri Lanka has yet to establish any formal licensing or compliance requirements for these intermediaries. The Financial Intelligence Unit also raised concerns about informal systems like Hawala being used to fund gambling tours from India, as well as unregulated activity on foreign cruise ships operating in Sri Lankan waters.
The timing of the debate is crucial. Colombo is preparing for the launch of City of Dreams Sri Lanka, a large-scale integrated resort backed by Melco Resorts and John Keells Holdings. The venue is expected to bring in VIP gamblers and boost tourism but may also increase the role of junkets unless proper regulation is put in place.
While government officials suggest that regulations could be introduced later, some members of Parliament argue that waiting to address junkets after the bill passes could weaken its overall impact. The lack of upfront oversight mechanisms, especially for credit and revenue transparency, remains a sticking point.
