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Sri Lanka’s Committee on Public Finance has intensified discussions on the regulation of casino junket operators, a critical yet unresolved element of the nation’s push to reform its gambling sector. The debates center on whether the proposed Gambling Regulatory Authority (GRA) will have the mandate to monitor and tax junkets—a question that has exposed gaps in the draft legislation to modernize the industry.
Draft Bill Paves Way for Independent Regulator
A draft bill to form the GRA, gazetted during late May 2025, intends to introduce an independent body exercising comprehensive control over Sri Lanka’s gaming sector. The legislation, slated for parliamentary review, aims to replace the outdated Casino Business (Regulation) Act of 2010 and address long-standing concerns about financial transparency and operational accountability. But the bill’s current iteration does not have clear provisions for junket regulation, which enables high-rollers to gamble overseas for international players via credit and travel packages.
Central Bank Highlights Regulatory Uncertainties
During recent committee hearings, a Central Bank representative highlighted the necessity for regulatory clarity on taxing and regulating junkets. While existing laws require casinos to report revenue, junket operators currently fall outside this framework.
The Central Bank official explained that under existing laws, there is “no mechanism to monitor [junket] operations,” and enforcement is confined to licensing procedures overseen by the Finance Ministry’s fiscal policy department. This loophole has been cited as a concern regarding possible money laundering risks and unregulated financial flows associated with junket operations.
Committee Probes Oversight Loopholes
The Committee on Public Finance has queried the GRA’s suggested scope, including its ability to monitor junket-related transactions. Media reports indicate that committee members questioned whether the regulator would have the authority to regulate money transfers, credit systems, or other financial transactions associated with junkets. The lack of clear language in the draft bill has added pressure for the need for amendments to ensure comprehensive oversight.
Analysts suggest that regulating junkets is critical for Sri Lanka’s ambitions to attract foreign investment while maintaining financial integrity. The island nation, which legalized casinos in 2010, has seen gradual growth in gaming tourism, particularly around integrated resorts in Colombo. However, the absence of a strong regulatory framework has prevented it from competing with established markets.
Path Forward for Junket Regulation
While the GRA bill does not mention junkets by name, officials say that the authority could issue supplementary regulations once operational. The Central Bank representative confirmed that the GRA would have the capability to “monitor this operation” through future directives, indicating a phased approach to plugging regulatory loopholes.
Sri Lanka’s gaming sector has expressed a mix of emotions. Casino operators, already subject to corporate tax and licensing fees, requested guidelines to prevent overlapping jurisdictions. Meanwhile, anti-corruption advocates urge legislators to make anti-money laundering (AML) a priority, based on international practice where unregulated junkets have facilitated illicit financial activities.
Balancing Growth and Governance
The ongoing deliberations reflect Sri Lanka’s wider challenge: creating a competitive gaming sector without sacrificing tight regulation. With the GRA bill expected to reach parliament in the coming months, amendments addressing junket operations could determine the sector’s trajectory. Committee members have stressed the importance of taking proactive measures, with financial monitoring training of GRA staff and cooperation with foreign regulators on implementing best practices.
As Sri Lanka navigates this intricate regulatory environment, the stakes extend beyond taxation. Proper junket control can enhance the country’s appeal to foreign investment and high-net-worth travelers, while failure risks financial instability and public distrust. The next few weeks will determine if lawmakers can find a balance that positions Sri Lanka as a responsible player in Asia’s developing gaming industry.
Source: Inside Asian Gaming (IAG)
