Govt. announces 150% tax hike on casino operations

• US $ 200mn to be charged from locals patronising casinos 

The government has decided to increase the annual tax on casino operations by a hefty 150 percent to Rs.500 million, with effect from August 1, 2022, along with the increases in the other taxes imposed on betting and gaming operations.

Issuing a press release yesterday, Finance State Minister Ranjith Siyambalapitiya affirmed that the main purpose of this tax increase is to strengthen the state coffers while discouraging proliferation of so-called ‘sin’ industries among the local population.

Accordingly, the Finance, Economic Stabilisation and National Policies Ministry announced that the annual tax on casino operations has been increased by 150 percent to Rs.500 million, from Rs.200 million, with effect from August 1.

Further, the government has decided to charge US $ 200 from the local patrons who visit casinos by amending the current legislation while introducing a registration fee for casino operators. 

As per Extraordinary Gazette Notification No. 2295/10, dated August 31, 2022, published under Section 4 of Casino Business (Regulation) Act, No. 17 of 2010, the commissioner general of the Inland Revenue Department (IRD) has been appointed as the ‘authorised officer’ in administering the licences for casino gaming business.

The IRD has already issued instructions on issuing casino licences. Accordingly, new applicants and the existing four operators are required to obtain the licences based on the new rules under the Betting and Gaming Levy of 2010, subject to a fee of Rs.500 million for a five-year period. 

The existing operators are required to make the application on or prior to 30th of this month for initial licence while the new entrants (only companies) could apply for licences at any time.

According to Capital Alliance, Sri Lanka’s existing casino space is limited to 90,000 square feet, spread over four different locations—Bally’s Casino, Casino Marina, Bellagio and Star Dust. They are estimated to be attracting 30,000-40,000 patrons a month. 

In addition, John Keells Holdings is expected to lease out space in its flagship Cinnamon Life to a casino operator.
Meanwhile, the government has also decided to increase taxes on other betting and gaming centres. Accordingly, the tax on live betting centres is to be increased from Rs.600,000 to Rs.1.0 million while the 10 percent turnover tax is to be increased to 15 percent per annum.

In addition, Rs.4.0 million tax on betting sub-agents is also to be increased to Rs.5 million per annum.

For betting centres that are not live, the current annual tax will be increased to Rs.75,000, from the current Rs.50,000.

After deducting these taxes, the ministry noted that all betting and gaming operations would be subjected to 40 percent tax on revenue or profits.

Further, a bottle of liquor and one stick of cigarette being sold at these premises are also to be subjected to a minimum of 75 percent and 85 percent tax.