Sri Lanka’s government has unveiled its 2025 budget, introducing measures aimed at revitalising the nation’s economy, with a particular focus on the gambling sector. The budget proposes significant changes to casino operations, including a doubling of entrance fees and an increase in turnover taxes.

Under the new budget, the entrance fee for the country’s casinos is doubled from US$50 to US$100. Additionally, the turnover tax imposed on gaming establishments is set to increase from 15 percent to 18 percent. These measures are designed to augment government revenue and address the financial challenges Sri Lanka has faced in recent years.

The nation’s casino industry, though relatively modest, includes the greenfield establishment such as the City of Dreams Sri Lanka in Colombo, which is poised to be the first integrated resort in the island nation. This resort began opening its non-gaming facilities last year, with plans to launch its casino operations in the third quarter of 2025. 

President Dissanayake stresses necessity 

President Anura Kumara Dissanayake, presenting his first annual budget, emphasised the necessity of these fiscal adjustments to sustain the country’s economic recovery. Sri Lanka experienced a severe financial crisis in 2022, leading to a default on US$46 billion (€42 billion) in foreign debt. 

With assistance from a US$2.9 billion (€2.7 billion) International Monetary Fund (IMF) bailout secured in March 2023, the nation has made strides towards stabilisation. Inflation rates have decreased, and the central bank has reduced interest rates to pre-crisis levels. A comprehensive debt restructuring was also completed in December 2024.

The IMF has stipulated that Sri Lanka must double its tax revenue, which stood at 7.3 percent of gross domestic product (GDP) in 2022, to meet a target of 15 percent of GDP. The increased levies on the gambling sector are part of the government’s strategy to achieve this goal. 

In addition to changes in the gambling industry, the budget outlines plans to lift a ban on vehicle imports, which had been in place since 2020. This move is expected to restore a significant source of tax income, as vehicles were previously taxed at approximately 300 percent.

Credit rating hinges on successful implementation

While these fiscal policies aim to bolster state revenue and facilitate economic growth, they also reflect the government’s commitment to adhering to IMF guidelines. The successful implementation of these measures is anticipated to enhance Sri Lanka’s credit rating and attract increased foreign investment, contributing to the nation’s ongoing recovery efforts.

As the country progresses with these initiatives, the impact on both the gambling industry and the broader economy will be closely monitored.

Source