Colombo, Jan 09: Sri Lanka has rolled out sweeping changes to its gambling tax regime, sharply raising licence fees and shifting to turnover-based levies in what industry observers describe as one of the most aggressive overhauls in Asia.
Under amendments to the Betting and Gaming Levy Act that took effect on Jan. 1, the casino entry fee for locals has doubled to $100, while the betting and gaming levy has risen to 18% of gross revenue from 15%, according to the Inland Revenue Department.
The changes significantly increase annual licence costs for casino operators and draw betting shops, gaming machines and online platforms into a tighter compliance framework, with limited time to adjust.
“Operators are being asked to absorb multi-fold increases in licence fees with almost no time to prepare,” said Ram Mohan, an Indian business developer with experience in the gaming sector. “Short timelines mean you either pay up, restructure, or exit.”
The shift to turnover-linked levies is expected to weigh most heavily on high-volume, low-margin operators, industry participants said.
“You pay even when margins are thin – profitability is compressed overnight. For B2C brands this is brutal, and for B2B suppliers it forces a rethink of how deals are priced and risk-shared,” a business development manager at Czar Gaming said.
Authorities have paired the higher levies with stricter enforcement and tougher penalties for non-compliance, signalling a harder line against unlicensed and grey-market activity.
“This isn’t just about more tax – it’s about formalising control. Banks and payment partners will become far more conservative around non-compliant traffic,” Mohan said.
The overhaul amends legislation first enacted in 1988, which relied on fixed fees and softer tax bases. The 2025 amendment, certified by parliament last year, introduced turnover-based levies and doubled the casino entrance fee, with officials saying the measures are intended to tighten compliance and boost state revenue.
Industry experts said the new regime is likely to prompt Asia-focused operators to reassess their exposure to Sri Lanka, increase the value of compliant local partnerships and accelerate demand for platforms that can adapt quickly to multi-jurisdictional rules.
“At CZAR Gaming, our priority is helping partners stay ahead of these shifts,” Mohan said. “That means configurable tax engines across markets, rapid rule updates without code changes, and transparent reporting for regulators and auditors.”
