📈 Sri Lanka’s Tax Net Missing Millions from Offshore Online Gambling

• Market Reality: 60–70% of Sri Lanka's gambling activity has moved online, with annual wagering estimates reaching tens of billions of Rupees. • Revenue Leakage: While 6 licensed land-based casinos pay strict taxes, the far larger online gambling segment contributes almost zero due to offshore operations, crypto wallets, and opaque payment processors. • Levy Structure: • Fixed annual levy for internet bookmakers: Rs. 5 Mn. • Fixed annual levy for physical casinos: Rs. 500 Mn. • Monthly gross-collection levy: 18% (from Jan 2026 for collections exceeding LKR 1 Mn). • Casino entrance levy: doubled to US$ 100 per entrant. • Regulatory Push: • Parliament passed the Gambling Regulatory Authority Act No. 17 of 2025 to establish a unified regulator by 30 June 2026. • New digital-services VAT rules (effective July 2026) target non-resident providers exceeding LKR 15 Mn/quarter. • Challenges & Risks: Unregulated digital platforms fuel money-laundering risks, FATF compliance issues, and youth participation due to weak local-presence enforcement against pure offshore operators.