Sri Lanka has enforced new gaming taxes for 2026, doubling the casino entry fee for locals to $100 and raising the operator levy to 18% to boost fiscal revenue.
Sri Lanka’s Inland Revenue Department (IRD) has confirmed that new, stricter fiscal measures for the betting and gaming sector are now in force. As of 1 January 2026, the cost for Sri Lankan citizens to enter a casino has doubled.
The Casino Entrance Levy (CEL) has been raised from $50 to $100 per person. The IRD notice clarifies that operators are legally obliged to collect this fee directly from local patrons upon entry, payable in either US dollars or the equivalent in Sri Lankan rupees.
This sharp increase effectively raises the barrier to entry for domestic players, a common regulatory tool used to limit local participation while keeping the market attractive to foreign tourists, who are typically exempt from such levies.
Alongside the consumer-facing fees, the government has increased the tax burden on gaming businesses. The Gross Collection Levy, a tax on the turnover of betting and gaming operators, has been lifted from 15% to 18%.
This higher rate applies to any business whose monthly gross collections exceed LKR 1 million (approx. $3,228). The IRD stated that "Every Betting & Gaming Business" operating within the regulated framework must adhere to the new rate immediately.
The legislative basis for these changes is the Betting and Gaming Levy (Amendment) Act, No. 25 of 2025, which was certified by Speaker Dr Jagath Wickramaratne on 17 December 2025 following parliamentary approval earlier that month.
These tax hikes are not happening in a vacuum; they are part of Sri Lanka's post-crisis economic recovery strategy. Following the economic collapse of 2022 and subsequent IMF bailouts, the government is under immense pressure to widen its tax base.
The decision to tax Gross Collections (turnover) rather than Gross Gaming Revenue (GGR) (profit) at 18% is a significant burden for operators. In many jurisdictions, a turnover tax is considered punitive because it taxes money that is eventually paid back to players as winnings. However, for the Sri Lankan government, it guarantees a steady stream of revenue regardless of operator profitability.
Furthermore, these fiscal moves are a precursor to broader structural reform. The government is currently establishing a dedicated Gambling Regulatory Authority (GRA), expected to be fully operational by June 2026. This body will likely enforce these new levies rigorously, moving the sector away from its historically loose oversight model towards a formalised, revenue-generating pillar of the tourism economy.
