Will high taxes get Sri Lanka gambling in trouble?
5 March 2019, the Sri Lanka government announced a number of changes to be applied to tax systems of ‘sin industries’, mainly to tobacco, alcohol, and gambling. Those are expected to bring more money to the country.
For almost a decade, the gambling industry has been a favourable source of income that brought millions in revenue every year. Currently, casino owners have to pay an annual license fee of $1.1 million. According to the recent updates, this rate will double, to $2.2 million. Additionally, operators will also be charged with 15% of their gross gaming revenue and will collect an entry fee of $50 per player, per visit.
As for entry fee, the finance minister of Sri Lanka cited an example of Singapore that imposes $100 to access a casino for 24 hours. However, such a comparison is unreasonable in terms that such a fee will seriously discourage many gamblers, especially Sri Lanka residents, to gamble at local casinos.
Analysts believe that the gambling industry in Sri Lanka will face a negative impact once new tax rates and fees are assessed on 1 April 2019. In particular, the new standards might also discourage several international gambling companies, such as Crown Resorts, Las Vegas Sands, MGM Resorts, which have earlier expressed a wish to enter Sri Lanka’s gambling market.
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