Sri Lanka’s online gambling industry remains in legal limbo, with experts warning that failure to regulate could lead to lost revenue and unintended restrictions on other digital platforms. This comes despite a recent development in which the country’s Cabinet of Ministers approved the continuation of drafting a bill to establish the Gambling Regulatory Authority. The decision follows a request from the Legal Draftsman, seeking concurrence from the current Cabinet to proceed with the legislative process.  

Speaking at an iGaming event in Sri Lanka, Riaan van Rooyen, CEO of Aria International, underscored the need for clear-cut policies. “Either you ban it completely, or you regulate it,” he said, dismissing partial regulation as an ineffective approach. Van Rooyen cautioned that past attempts to outlaw online gaming in other countries have led to unintended consequences, including broader internet restrictions that impact social media and payment systems.  

Joe Pisano, CEO of Jade Entertainment and Gaming Technologies and a veteran in the industry, echoed this concern. “If you try to fight the tide, you’re only going to drown,” Pisano warned. “The best approach is to bring online gaming into the system and regulate it effectively.”  

Van Rooyen further warned that failure to establish a regulatory framework could result in lost tax revenue and a surge in illicit activities. “If you do not have it fully integrated, you’re not going to be around for long,” he cautioned.  

Gaming industry at a crossroads  

Sri Lanka’s gaming landscape is evolving rapidly, with online gambling gaining traction despite the absence of formal regulations. The country currently permits state-run lotteries and land-based casinos, but online gaming remains in a legal grey area.  

With mobile penetration at 90 percent and internet usage at 50 percent, experts argue that Sri Lanka is already primed for digital gaming adoption. “There’s a huge explosion here, like in Africa, of digital adoption,” Van Rooyen observed. “You cannot ignore the shift to online gaming—it’s happening whether you regulate it or not.”  

Despite Sri Lanka’s rich gaming culture, including unique table games like Lucky Lotus and Lady Lotus, many traditional casino operators are hesitant to embrace digital transformation. Van Rooyen likened this reluctance to the failures of once-dominant companies that resisted change.  

“It sounds like Kodak. They missed their boat totally,” he said. “Nokia too. Exactly the same.”  

Land-based casinos must adapt or risk obsolescence  

While some land-based casino operators fear that online gaming will cannibalise their business, Van Rooyen argued that integrating both platforms is the key to survival. He painted a future where digital and physical gambling seamlessly merge.  

“Imagine you’re gambling on your mobile phone at home, and when you walk into the casino, it says, ‘Welcome! Your machine is in the left-hand corner, the progressive jackpot is at $15,000, and would you like your usual whiskey and soda?’” he explained. “That’s the future, but many land-based operators are resisting it.”  

The future of gaming in Sri Lanka  

Both Van Rooyen and Pisano stressed that Sri Lanka must act now to regulate online gaming, warning that failure to do so could lead to an unregulated black market and lost economic opportunities.  

“The industry is moving forward, with or without regulation,” Pisano said. “The only question is whether Sri Lanka wants to benefit from it or be left behind.”