Casinos in Sri Lanka Hit with Big Taxes
Sri Lanka is officially implementing new ‘sin taxes’ aimed at redistributing money to different parts of the country. Taxes are now going up on tobacco, alcohol, and gambling. Casinos in Sri Lanka are being hit particularly hard. Does this mean the gambling industry here is in trouble?
The gambling industry in this country has been liberalized over the past decade. The new laws set by the government is going to sting for both gamblers and gaming operators. Let’s look at why this came about, and what may happen in the future.
Legalization of Casinos in Sri Lanka
A civil war plagued Sri Lanka from 1983 to 2009. Gambling during this period was the last thing on lawmakers minds, and the industry was virtually non-existent. A few unregulated gambling establishments existed inside the country, yet these relied on legal loopholes and bribes in order to operate.
In 2010, the Sri Lankan government passed a bill to fully regulate the country’s gambling industry. Proponents of gambling hoped that reviving the gaming market here could help to boost foreign tourism. The government had control of all gambling activities in the country, including the casinos spread around major cities.
Casinos in Sri Lanka were previously paying the government an annual licensing fee of $1.1 million annually. The gambling industry here was performing well, with both locals and foreign gamblers bringing millions in revenue every year. Lawmakers in Sri Lanka are now shaking things up, and the gaming market will suffer as a result.
‘Sin Taxes’ Hitting the Gambling Industry Hard
Sri Lanka’s presidential election is likely to take place later this year. President Maithripala Sirisena famously sacked Prime Minister Ranil Wickremesinghe last year. This decision heavily impacted the economy.
Sri Lanka now owes a record-high $5.9 billion US in foreign loans. President Sirisena desperately needs a way to bring in more money to be re-elected. The ‘sin taxes’ may be a way to bring that revenue in.
Casino operators in the country are not happy. Casinos in Sri Lanka will now pay $2.2 million in licensing fees every year. Even worse, these casinos will pay a 15% tax fee on all gambling turnover.
These laws are affecting gamblers in the country, too. There will be a flat $50 fee to enter casinos. It’s likely that the increase in taxes on these casinos will force the establishments to boost their prices for customers. There’s no doubt that this is going to hurt the industry here.
Is Sri Lanka’s Casino Industry in Danger of Failing?
Sri Lanka’s casino industry is an extremely lucrative market. A number of major gaming companies including Crown Resorts (based out of Australia) and Las Vegas Sands have expressed interest in entering this country. With higher taxes and fees for players, that could change.
The casino entry fees for gamblers in Sri Lanka may be the biggest blow to the gambling industry here. It’s likely to discourage players from visiting land-based casinos in the country, and could push locals to make more bets through online gambling sites based in Europe. If gamblers stop visiting casinos in the country, the industry could be in trouble.
It’s also possible that Sri Lanka revamps its laws towards the gambling industry after the presidential election taking place this year. As we mentioned earlier, these laws are most likely to be politically based as a way to gain public support. As revenue falls, the government here may rethink their strategy on gaming taxes.
Do you think casinos in Sri Lanka are in trouble of failing? Let us know what you think in the comment section below!
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