Sri Lanka took a significant step towards establishing a formal gaming regulatory authority by increasing the fees for obtaining and renewing casino licenses. With the goal of ensuring fair tax contributions from casino owners and combating criminal activity, the Ministry of Finance has implemented a revised fee structure effective from January 1, 2024.
The newly introduced fee structure for obtaining and renewing casino licenses in Sri Lanka is tiered based on the level of investment. Fresh investors committing a minimum of $250 million will be subject to a combined cost of $31 million for acquiring the license and its subsequent renewal.
On the other hand, investors with a higher threshold of at least $500 million will pay a lower initial license fee of $15 million, while the renewal fee remains the same at $31 million.
In addition to addressing new investors, the revised fee structure also affects existing casino operators who obtained their licenses before January 1, 2023. These operators will be subject to a different fee arrangement. For the first five years, they will pay $1.5 million, followed by an additional $46 million for the next 15 years, making the total license fee $62 million. The renewal fee for these existing operators remains consistent at $31 million.
The decision to increase casino license fees is part of a broader initiative by the Sri Lankan government to establish a gaming regulatory authority. This move comes in response to the absence of regulatory oversight, leading to an estimated $7.4 million in casino taxes in arrears. The establishment of a regulatory authority aims to address this issue, collect taxes effectively, and ensure fair practices within the industry.
Apart from tax collection, the gaming regulatory authority also aims to mitigate negative societal impacts associated with the casino industry. While casinos can contribute to economic growth and tourism, they can also lead to social problems if not properly regulated. The establishment of a regulatory authority will enable the government to implement measures to counter criminal activities and protect vulnerable individuals from the potential harms of excessive gambling.
As of now, six casinos are operating in Colombo, the capital city of Sri Lanka: Bally’s, Bellagio, Casino Marina, Stardust, Continental Club and The Ritz Club.
However, there are currently no new licenses issued to 10 operators who have applied for them. The establishment of a gaming regulatory authority will streamline the process of issuing licenses and ensure that new operators meet the necessary criteria and comply with regulations.
