Sri Lanka plans junket oversight in new regulatory overhaul
Sri Lanka’s Parliamentary Committee on Public Finance has raised fresh concerns about junket operations in the country’s casino sector as lawmakers gear up to debate a new bill aimed at tightening gambling regulation.
The proposed Gambling Regulatory Authority Act, introduced last month, aims to establish an independent body to oversee the nation’s growing gaming industry. However, amid recent committee hearings, officials from the Central Bank of Sri Lanka highlighted key gaps in the draft legislation, particularly its failure to explicitly address junket operators.
Speaking before the Committee, a Central Bank official acknowledged that Sri Lanka lacks a formal system to monitor or regulate junket activities. “At present, junket operators fall outside our existing tax and licensing structures. The only mechanism in place is within the Fiscal Policy Department of the Ministry of Finance, and even that is limited to licensing. There is no enforcement provision under the Casino Business (Regulation) Act of 2010,” the official said.
For the unaware, junkets are third-party agents who bring high-rolling gamblers, often from abroad, to licensed casinos. They typically arrange travel, accommodation, and even extend credit to VIP clients. In return, these operators earn commissions based on the betting volume generated by their clients.
Junkets linked to tax evasion
While junkets are common in global gaming destinations such as Macau and the Philippines, they have often been linked to money laundering, unregulated credit systems, and tax evasion.
While traditional casino revenues are already captured under Sri Lanka’s existing tax framework, officials have noted that transactions linked to junket operations—often involving foreign currencies or token-based credits—are likely to be bypassing regulatory scrutiny. “Whether junkets will be brought under the proposed Gambling Regulatory Authority’s revenue mechanisms remains to be seen,” the Central Bank representative added.
According to The Sunday Times, the current draft of the Gambling Regulatory Authority Act does not explicitly mention junkets, raising concerns among lawmakers and regulators that the bill may leave significant loopholes unaddressed. While officials have indicated that regulations could be introduced once the Authority becomes operational, some argue that clear legal language should be built into the Act itself.
Sri Lanka pushes for credibility
The push for more robust oversight comes as Sri Lanka seeks to establish itself as a credible and regulated gaming hub, while mitigating the reputational risks associated with illegal cross-border financial activity. In recent years, media reports have pointed to foreign agents, particularly from India, organising high-stakes tours to Colombo’s casinos using untraceable payment channels such as Hawala.
The Gambling Regulatory Authority Act is expected to be tabled in Parliament later this year. Until then, government officials say consultations will continue to bridge remaining gaps, especially those involving junket operations, which are appropriately addressed.
