Investors seek clarity as Sri Lanka readies gaming framework

Rushda Niyas

Dr. Harsha de Silva

Manmohan Kohli

• Legal and industry specialists stress investment decisions in the gaming sector are driven less by incentives and more by regulatory certainty
• Operators say they want regulation because it allows them to expand their operations without uncertainty

By Shabiya Ali Ahlam

Global gaming operators are unlikely to commit capital to Sri Lanka’s emerging integrated resort sector without clear, enforceable rules, industry experts warned, as the country moves to operationalise its long-delayed regulatory framework.

Legal and industry specialists said that while Sri Lanka’s market potential remains attractive, investment decisions in the gaming sector are driven less by incentives and more by regulatory certainty.

“For investments such as into the gaming industry, which are huge, you need consistency. You need stability, and you need to know what you are getting into,” JAAR Law Managing Director Rushda Niyas said.  She was speaking at the 7th Annual SPiCE South Asia conference held in Colombo this week.

Sri Lanka is currently working to implement its Gaming Regulatory Authority framework, with expectations that the regime will be operationalised later this year. However, concerns persist over delays, limited stakeholder engagement and the absence of detailed rules governing licensing, taxation and compliance.

Gaming Laboratories International (GLI) Business Development Manager Manmohan Kohli said Sri Lanka is gaining regional attention as it moves to formalise the sector, but warned that key questions remain unresolved.

“The good thing is that Sri Lanka is, in some way, leading. India was there, and I think it was moving in the opposite direction. But Sri Lanka is now moving ahead,” he said.

“At the same time, is public consultation actually happening? Is the government speaking to the operators? Is it required? And how are they going to regulate? Is there going to be overregulation, or is it going to be hands-off? We don’t know,” Kohli added, noting that the current Act remains a framework that requires detailed rules.

Industry participants, sharing views at an interactive session, said global operators typically prioritise transparent regulatory structures over short-term fiscal concessions when entering new markets, particularly in sectors requiring large upfront capital commitments and long payback periods.

“Operators want regulation because it allows them to expand their operations without uncertainty. They don’t want to be in a situation where they are later questioned or penalised for unclear rules,” an industry expert said.

Clarity around licensing criteria and operational requirements was identified as a key determinant for investors.

“If I want to apply for a licence, there should be clear criteria published, on a government website or elsewhere, so I know what is required, and I can conduct my business the right way,” another senior industry representative added.

Sri Lanka is seeking to position gaming and integrated resorts as part of its broader tourism and investment strategy, with several large-scale projects already in the pipeline. The sector is expected to generate foreign exchange, employment and fiscal revenues, provided a credible regulatory environment is established.

Member of Parliament and Committee on Public Finance (COPF) Chairman Dr. Harsha de Silva stressed that regulation is essential to attract reputable investors and safeguard the industry’s integrity. “You need a regulatory structure. Without a regulator, we don’t want fly-by-night operators coming in and damaging the system. We want credible investors, people with reputation, to come in and invest,” he said.

Industry observers noted that in the absence of a clear framework, markets tend to be dominated by informal or grey operators, limiting the state’s ability to capture revenue and enforce compliance.

With regional peers such as Mauritius and the Philippines having already implemented structured regulatory regimes, Sri Lanka’s ability to compete for global gaming investment will depend on how quickly and effectively it can move from legislative intent to operational clarity.

Pix by Pradeep Pathirana