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Sri Lanka’s Cabinet of Ministers approved a budget proposal raising the nation’s betting and gaming levy to 18 percent from the current 15 percent. In addition, the casino entrance fee for Sri Lankans will be doubled from $50 to US$100. The measures are set to tighten government income from the gaming industry as the country solidifies gains from its growing integrated resort business.
The timing of this approval follows just six weeks since Sri Lanka opened its first internationally-standard integrated resort with a casino, City of Dreams Sri Lanka, operated by international operator Melco Resorts and Entertainment Ltd. The Colombo-based property represents a major achievement for the country’s gaming and tourism growth.
Details of the Levy and Fee Increases
The suggested amendment focuses on the gross collection levy, a percentage tax levied on the overall turnover derived by bookmakers and gaming operators. Currently, the levy stands at 15 percent and is charged every month when gross collections reach LKR 1 million (approximately US$3,314.70). The government’s suggestion increases the rate to 18 percent, potentially generating more income for the state.
In like fashion, doubling the casino admission fee would seek to balance neighborhood availability with control from regulation, perhaps diminishing low-frequency visits while increasing fiscal contribution. The new US$100 fee is still within a broader context of attempting to regulate and maximize the social and economic benefits of the gaming industry.
Legislative Process and Regulatory Framework
The rise in gaming and betting levy will be part of an amendment in the Betting and Gaming Levy Act waiting for approval by parliament. The cabinet spokesman and the Minister of Health and Mass Media, Nalinda Jayatissa, confirmed the signing intent after a recent cabinet meeting.
This comes after previous parliamentary legislation in August, when the Sri Lankan Parliament voted in favor of the Gambling Regulatory Authority Bill. The bill creates a specific Gambling Regulatory Authority, providing a more formalized supervisory mechanism, and enables it to revoke earlier actions deemed old-fashioned or ineffective.
Balancing Market Growth and Regulation
Sri Lanka stands at a crossroads in its efforts to develop its gaming tourism while at the same time exercising responsible and efficient governance. The City of Dreams Sri Lanka is the nation’s first integrated resort of a large scale, defining new standards and luring regional visitors.
By increasing levies and fees, the government is reacting to fiscal requirements and social concerns. The reforms will see that the booming gaming sector pays its share towards public coffers while upholding control precautions.
Implications for Operators and Patrons
Operators such as Melco will have to be realistic with the higher levy, looking at its impact on margins and pricing regimes. Local customers, however, will have to face higher costs to get in, possibly having an impact on visitation rates and retail consumption in casinos.
Whether and to what extent they impact overall industry behavior will be a matter of market response, level of enforcement, and continued efforts at balancing economic incentive against social responsibility.
Source: GGR Asia
