Sri Lanka’s rapid shift to online gambling is leaving some players in debt and behavioural addiction, while the country’s oversight system is still catching up. The Morning reported that smartphones, aggressive sports-betting marketing and an unfinished legal framework have made betting easier to reach and harder to control.
At Sumithrayo’s Mel Medura programme, honorary director Jomo Uduman said the smartphone had become the gateway to online gambling and that people were “gambling their salaries away.” He said people already in debt often try to win enough to clear what they owe, but repeated losses pull them into a spiral of more losses and hope for a big win that never comes.
Uduman said shame keeps many victims quiet until they are in financial ruin. He added that the centre has seen relatively few people explicitly seek help for online gambling addiction, because many try to sort out the problem by borrowing money again to cover earlier losses.
He also said Sri Lanka has not been studied much in this area and lacks validated data and statistics. In his view, the situation is already brewing into a crisis.
Sumithrayo chairperson Suranjani Wickremeratne said the organisation receives many distressed callers who say they have spent all their money. She said gambling is an addiction and that people who are caught in it need therapy to get out of it.
Lakmal Embuldeniya, president of the Digital Trust Alliance, said digital platforms have stripped away the physical and social barriers that once limited gambling. He said the issue is one of governance and digital trust, warning that without an active state regulator operators can build online platforms and manipulate back-end probability algorithms at the user’s expense.
He contrasted that with Las Vegas, where more than 80% of operations are automated and digital gaming systems and are subject to state auditing and code inspection. Embuldeniya said Sri Lanka lacks both the legislative mechanics and the technical competence to audit such systems properly, and urged Parliament and the Treasury to extend existing physical gambling rules to the online space as an immediate legal stopgap.
The article also said major commercial banks have moved to block direct credit card transactions on known international gambling sites. Illegal operators, it said, still exploit grey-market workarounds including local rupee-to-cryptocurrency exchanges and peer-to-peer virtual card-loading mechanisms.
The same report described a wider enforcement problem. Police were said to be dealing with foreign nationals overstaying visas to run clandestine operations from rented apartments and commercial properties, and ASP F.U. Wootler said there were almost 700 arrests of foreign nationals involved in scams in 2024-25, most of whom were deported and blacklisted.
The Morning also said cross-border online gambling and telecom fraud have become a typical form of transnational organised crime. It cited the Chinese embassy in Sri Lanka as saying the perpetrators, victim groups and operational areas have pronounced international characteristics, and the United Nations Office on Drugs and Crime as warning that scam centres are spreading beyond Southeast Asia and are increasingly intertwined with human trafficking.
On the parliamentary side, the Committee on Public Finance has repeatedly raised concerns about the rapid growth of illegal online gambling and the gaps that allowed such operations to flourish. Chairman Harsha de Silva warned that Sri Lanka was emerging as an international hub for illegal online gambling, said more than 40 payment methods were available on such platforms, and argued that the absence of proper laws had led to the situation.
De Silva also said some operators were registered overseas, making them difficult to regulate locally. He said existing casino laws were inadequate for online gambling and said the Central Bank of Sri Lanka failed to provide satisfactory answers to 18 questions the committee submitted in April.
The legal backdrop is shifting, but slowly. A note on the Gambling Regulatory Authority Bill says the Cabinet approved the measure and it was published in the Government Gazette on 27 May 2025. The bill was designed to create a Gambling Regulatory Authority, set a legal framework for gambling activity in Sri Lanka, and act as a one-stop regulator with powers to coordinate with police, investigate suspicious activity and assess risks tied to money laundering and other unlawful financial activity.
The note says the bill would apply to gambling other than lotteries and social gambling, and that digital gambling would be prohibited unless expressly authorised under a specific licence. It also says the measure would repeal the Betting on Horse-Racing Ordinance, the Gaming Ordinance and the Casino Business (Regulation) Act, while introducing offences for unlicensed gambling, under-18 participation and employing people under 21 in gambling operations.
The older Casino Business (Regulation) Act, No. 17 of 2010 already required a licence to run a casino from 1 January 2012 and made unlicensed casino business an offence punishable by up to five years in prison or a Rs. 5 million fine. But de Silva said those rules do not adequately cover online gambling, and Embuldeniya argued that the online sector still lacks both a workable legal basis and the technical capacity to police it.
According to The Morning, the Gambling Regulatory Authority Act No. 17 of 2025 came into effect on 1 December 2025, but supplementary regulations were still being finalised before it could become operational. A separate iGamingToday report on 20 July said the launch of the new regulator had slipped beyond an internal June target as officials sought further expert input, including from international specialists, before finalising the operating model and rules.
That report said the extra review was meant to strengthen anti-money-laundering controls, responsible gambling measures and licensing standards. It also said authorities had doubled the casino entrance fee for Sri Lankan citizens to US$100 since January and raised the gross collections rate on betting and gambling businesses from 15% to 18%, signalling an effort to tighten control while preserving revenue.
