• Sri Lanka’s new Gambling Regulatory Authority Bill is facing intense criticism for creating a regulator that lacks independence and is vulnerable to political interference.
• The bill is being expedited ahead of the 2nd August opening of Melco Resorts & Entertainment’s City of Dreams Sri Lanka, a major integrated resort in Colombo.
• Critics, led by the Advocata Institute, argue the bill grants excessive power to the Minister of Finance, effectively making the authority a “proxy” rather than a credible independent body.
• Major legislative gaps have been identified, including a complete lack of oversight for online gambling, weak financial penalties, and the exclusion of state-run lotteries from its remit.
• Experts warn that without significant changes, the flawed framework could damage market integrity and deter long-term investment as regional competition intensifies.

A Regulator Without Independence

As Sri Lanka prepares for the high-profile launch of Melco’s City of Dreams integrated resort on 2nd August, the government’s attempt to rush through a new regulatory framework is drawing sharp condemnation from policy experts. The proposed Gambling Regulatory Authority Bill, intended to provide oversight for the nascent market, is being criticised as a fundamentally flawed piece of legislation that fails to establish a credible, independent regulator.

The most severe criticism, led by Colombo-based think tank the Advocata Institute, centres on the excessive powers vested in the Minister of Finance. Under the draft bill, the Minister would have the sole authority to appoint the board and Director General, issue binding directives, and unilaterally create regulations.

“The independence of a regulatory body is non-negotiable,” said Sudaraka Ariyaratne, a Research Consultant at Advocata. “In its current form, the Bill does not create a regulator. It creates a proxy.” This concentration of political power, critics argue, undermines the very purpose of an independent authority and creates a framework vulnerable to corruption and political interference, a major red flag for international operators who prioritise regulatory stability.

Falling Short of International Standards

When compared to established regulatory models like Singapore’s, the shortcomings of the Sri Lankan bill become stark. Where Singapore has a robust, multi-layered legal framework built on stringent controls and social safeguards, analyses describe the Sri Lankan bill as a “skeletal framework” primarily weighted towards revenue collection rather than integrity and social protection.

Key areas where the bill fails to meet international best practices include:

• No Oversight for Online Gambling: The draft completely ignores the online gambling sector, containing no provisions for registration, monitoring of cross-border operations, or digital harm-mitigation tools. This is a significant omission in the modern iGaming landscape.
• Weak Enforcement and Penalties: The bill proposes penalties, such as a fine “not exceeding ten million rupees” (approx. €28,000) for operating without a licence, that are seen as too low to deter major violations. This contrasts sharply with jurisdictions like Singapore, where penalties can run into the millions and include percentages of GGR.
• Poor Revenue Tracking: The framework lacks specific mechanisms for robust revenue tracking, continuing a reliance on operator self-reporting, which the Inland Revenue Department has proven ill-equipped to verify.

A Missed Opportunity Amid Regional Competition

The bill also has notable structural omissions, such as excluding the state-run lottery boards from its oversight and failing to mandate representation from the Sri Lanka Tourism Development Authority on its board.

Experts at Advocata warn that while Sri Lanka is hastily assembling a flawed framework, regional competitors such as the UAE and Thailand are moving purposefully to establish their own gaming markets. By failing to create a credible and independent regulatory environment from the outset, Sri Lanka risks losing valuable foreign investment and tourism revenue to these emerging rivals.

The consensus among policy experts is that while the creation of a regulatory authority is a necessary step, the current bill should be withdrawn and reworked following public consultation. As it stands, the legislation threatens to undermine the long-term integrity of the market it seeks to govern.