Casino gambling is unlawful in much of Sri Lanka. The only exceptions are casinos in Colombo which are open to foreign passport holders and in some cases members. The penalty for gambling is normally up to 6 months in prison, but it is up to double that for gambling in public casinos. That part of the law is rarely enforced, but our brick and mortar casinos are still not a great option for locals. As the end of this article covers, these are not well regulated. Online casinos are likely a better option for locals.
In this article I introduce Colombo casinos and provide links to their websites. I also cover the history of Sri Lanka casino law. If those topics interest you scroll down as first I cover online casino.
Unknown to some, in Sri Lanka we do in fact have several domestic online casinos. The same as our land based casinos, they target foreigners. These are less legal than their brick and mortar counterparts. They are also not regulated! Likewise, there is no way of knowing whether or not the games are fair.
It is a much better to use foreign online casinos. While these sites are in English as opposed to Tamil and Sinhala and support USD, EUR, and GBP instead of Sri Lankan Rupees (LKR), there is adequate upside.
Casinos based in the Philippines, UK and the UK territories Gibraltar and Isle of Man are regulated by strong gambling commissions. These commissions audit to make sure the online casinos they license are both financially solvent and offering fair games. The ones most recommended from these jurisdictions are listed below.
Even though the above casinos do not support Sri Lankan Rupees (LKR), you can still use them hassle free. There are a number of e-wallets that can be used for deposits and payouts. While others include Skrill (Moneybookers) and EntroPay, my personal favourite is NETELLER.
NETELLER acts just like an online bank account. In minutes you can open an account via their website www.neteller.com. When doing so select USD, EUR, or GBP as your account currency. You can then find instructions to make a bank wire transfer to fund your NETELLER account. Once it is funded you can use that money to deposit at any online casino listed on this page.
At online casinos, as you make bets, depending if you win or lose, your balance goes up and down. At any time you want to cash out that balance you can do so by requesting a NETELLER payout. The money will be taken from your casino account and added to your NETELLER account. You can then use it at another casino, or cash out from NETELLER too.
Perhaps the best feature is a debit card with a MasterCard symbol on it that NETELLER sends account holders. Even if your NETELLER account is in USD, EUR or GBP, you can still withdraw from your NETELLER balance in Sri Lankan Rupees (LKR) at any ATM. NETELLER will debit your account balance using the appropriate exchange rate. Your NETELLER balance can also be spent using the card anywhere MasterCard is accepted.
There are far less casinos in Colombo than their once was. Other than the requirement they be licensed by 1 January 2012, a bigger issue is new tax rates that went into effect on 1 April 2013. Licensing now involves the casino owner paying a Rs. 10 crore annual levy plus a 5% of gross collection as tax. As many small casinos cannot meet these terms they have been closed down. This was the case with Red Star casino which closed after a 28 June 2013 police raid and Regina Club which was raided 3 days later.
Today there are only five casinos in Colombo that are legitimate. Each is owned by either Dhammika Perera or the Sri Lanka Rank Group. There is strong potential for at least two more casinos, which are foreign-funded, to be built in the near future.
Dhammika Perera is one of the richest men in Sri Lanka. He controls around 10% of all Sri Lanka’s publicly listed firms and also is our country’s Transport Ministry Secretary. A portion of his wealth has come from casinos. In 1993 he started a casino at Isurugiri hotel which is no longer in place. He then founded casinos which in 1995, 1996 and 1998 which are still in operation today. Those are as follows.
There are two Colombo casino managed by Rank Holding (Pvt.) Ltd.. If you glance at the sidebar menu of that page you will see this is only one of the many Rank Group Companies. This is a very large Sri Lankan conglomerate. Their casino interests are mentioned below.
Although the names of the Colombo casinos mentioned on this page might sound familiar to some, understand they are not affiliated with other properties. The Bellagio in Colombo has no relationship with the casino in Las Vegas of the same name. MGM Colombo is not related to the massive MGM Resorts International. Star Dust has no relationship to Las Vegas Sands Corp, nor does Marina Casino have ties to the Singapore casino Marina Bay Sands. Ballys is not part of the Ballys brand now owned by Caesars Entertainment. Sri Lanka casinos are much smaller than the casinos which they borrowed the names of.
There are two major development projects that were approved in late 2013, that will likely see new casinos brought to Sri Lanka in order to target rich tourists. One is the Crown Complex which is rumoured will cost at least Rs. 46 arab to build. It is a partnership between Australian casino mogul James Packer’s Crown Limited and Sri Lankan company Rank Entertainment which started Star Dust Colombo back in 1995. This was the first foreign funded casino approved. Or perhaps not! There is some talk the approval is for other aspects and not a casino. However, as it will be in a designated casino zone the Rank Group can choose to move their Star Dust license here if they wish.
The other project is a partnership between the largest registered company in Sri Lanka, John Keells Holdings, and an undisclosed foreign partner. This is rumoured to be in the range of a Rs. 92 arab investment into an integrated resort that will include gambling activities. Whether a license has been approved for this or not, is up for debate.
In fact, all of the above is quite interesting to debate considering Sri Lanka has no gambling commission nor any formal licensing process! Casinos here could be on shaky grounds if the opposition party ever were to gain control of parliament. I will cover that in full in the next section which concludes this article with information on Sri Lanka casino law and the history thereof. Just noting here that it is odd for such sizeable investments to be made without much legal framework in place.
The law which makes casino gambling a crime in Sri Lanka is the Gambling Ordinance (1890). While it has been in effect for nearly one and a quarter centuries it has been modified many times. This law sets the punishment as follows:
”Whoever commits unlawful gaming shall be punished with a fine not exceed one hundred rupees, or with rigorous imprisonment for a term which may extend to six months, or both”
Casinos first opened in Sri Lanka without changes to our law. These casinos referred to the fact the Gambling Ordinance claimed the Act does not apply to rest houses under local authority or proprietary clubs so long as “no promiscuous gaming takes place therein”. While promiscuous gaming was not defined, the argument was that this means public gambling, and so the casinos called themselves clubs and required membership.
This loophole that might have allowed for clubs offering casino games has since been plugged multiple ways. The text has been edited to make it clear that it is only other aspects of the act that do not apply to these locations. A separate section increases the penalty to up to one year in prison. This has not stopped many casinos from offering locals membership, as enforcement is low. The letter of our law does however make it a crime that is punishable for up to 1 year in prison when locals without foreign passports use these casinos.
What I just explained might sound awkward in today’s time. Understand that from 23 July 1983 to 18 May 2009 (25 years, 9 months, 3 weeks and 4 days) we were in an intense civil war that caused our country great hardship. Casinos were allowed because they paid much needed tax revenue. In fact, this is still the reason they are allowed.
The formal policy of taxing gambling operators came as result of the Betting and Gaming Levy Act of 1988. Many sources improperly state this was the start of legal gambling in Sri Lanka. However, this Act applied to all gaming centres regardless of whether or not they were legal. In 1990 the government formed a committee to study the legal aspects of our casino industry. They put together a full proposal that had it passed would have legitimised and regulate our casinos.
Although the proposal from 1990 never passed, the evolution of casinos in Sri Lanka moved forward as if it had. In 1993 several casinos opened. In 2004, VAT was added to casino transactions, which the industry called a “sin tax”. In 2006 then Prime Minster Ratnasiri Wickremanayake made his own attempt to legitimise the now well established casino industry. He drafted a bill that would see designated gambling zones established and a regulatory and licensing committee set up and put in place. Once again this stalled and casinos continued to operate in a legal grey area, though they were allowed because of tax authority blessings.
As you will read below eventually an act to license casinos did pass. As for the tax rate, effective 1 April 2013 this became a Rs. 10 crore annual levy and 5% of gross collection. The previous “sin tax” (VAT) no longer applies.
The law which passed to bring casino licensing to Sri Lanka is the The Casino Business Regulation Act (No.17 of 2010) which passed on 7 December 2010. If you click that link you might be surprised to discover how few words this act contains. The main thing it did was set a rule that no person can engage in the business of casino after January 1, 2012 without a valid license. It set the penalty for violation at up 5 years in prison.
As covered in this Act, license are to be issued by the Finance Minister (which our President serves as), the casino must be within a specific designated gambling zone, and this must be published in the Gazette. It is worth pointing out that despite this having long been in effect, there has never been Gazette notices regarding issuing of any casino license. There has been plenty of comments from the tax authorities and ruling government about who is and who is not licensed but that is all.
This act also says the Minster may make regulations regarding how the license application process works, procedures for granting licenses, procedures for cancelling a license, etc. It then says every regulation made shall be published in the gazette and taken before Parliament for approval.
The odd thing is this: as the opposition party is quick to point out, none of the above has ever happened! There is no regulation, code of conduct, dispute process, gambling commission or casino control board in Sri Lanka; this is in stark contrast to the majority of countries with legal gambling.
Despite the lack of regulation and rules, major investments are now being made to develop our casino industry at a rapid pace. It will be interesting to see if rich tourists are willing to come to Sri Lanka over Macau, Singapore, Malaysia and the Philippines when these massive resorts get built. All these other countries have rules and regulations which protect and give players legal recourse. While some might assume the regulations will be in place by then, I must ask, why assume this? Right now we have large casinos operating in Sri Lanka without such rules and this has been the case for decades.
It will be interesting to see how things soon play out, but in the opinion of the Sri Lanka side of Asiabet, our brick and mortar casinos industry has a long way to go to compete. As for locals, the legality of using casinos is unknown, and with the games not being regulated, this is why in this article’s introduction I stated, online casinos are likely a better option for locals.