-By A Special Correspondent
(Lanka-e-News -30.May.2025, 11.15 PM) When most people think of Sri Lanka, they picture sandy beaches, stilt fishermen, and Ceylon tea. But if you follow the neon lights after midnight in Colombo, you’ll find a different kind of attraction lighting up the capital—casinos, and not just the legitimate kind. Behind the smoke machines, chandeliers, and baccarat tables lies a parallel world of illegal gambling dens, offshore money trails, political cover-ups, and more Hawala transactions than a Bollywood gangster film.
And while the roulette wheels spin and the dice fly, billions in untaxed revenue vanish into thin air, right under the nose of the Inland Revenue Department—perhaps with the help of a little nudge from well-lubricated palms.
Let’s start with one of the most notorious players in the game—a former provincial governor, ex-High Commissioner, and reputed lover of casinos (and risk, clearly). Known more for his chips than his diplomacy, this gentleman allegedly ran a string of illegal casinos across Colombo, some discreetly hidden behind five-star façades, others flaunting their existence like a VIP table on New Year’s Eve.
His clientele? A healthy mix of local elites, offshore tycoons, and—wait for it—planeloads of Indian high-rollers who come to Sri Lanka not for sightseeing or seafood, but to gamble millions in cash... without ever bringing the cash.
How does one play high-stakes poker without a suitcase full of rupees or a platinum credit card? Enter the Hawala system—the unofficial, untraceable, and untaxable method of financial transfer so beloved by shady businessmen and money launderers alike.
Here’s how it works: an Indian gambler turns up at a Colombo casino, places bets worth lakhs (or crores), and doesn’t pay a cent at the door. Instead, he simply tells the cashier: “Call my guy in Mumbai.”
A local Hawala agent in Sri Lanka receives a WhatsApp or signal-coded call from his counterpart in India. Funds are exchanged off the books, money is delivered offline, and the Sri Lankan casino owner gets paid without ever touching a legitimate banking system. Convenient, effective—and completely illegal.
This isn’t just happening at backstreet joints with flickering neon signs. The biggest casino in the country—owned by one of Sri Lanka’s richest men—is reportedly neck-deep in this racket, operating more like a cartel front than a gaming establishment.
Here’s the kicker: almost none of this money gets taxed.
Government regulators, the Central Bank, and the Inland Revenue Department seem to be either fast asleep or fastened to their seats by golden handshakes. The casino industry in Sri Lanka is estimated to handle billions of rupees annually, but only a tiny fraction of this wealth ever sees the inside of a tax declaration.
Why? Because 95% of the payments come through Hawala or other grey-market systems, bypassing formal financial channels. No receipts. No client records. No audited statements. Just chips, champagne, and invisible income.
Meanwhile, honest small businesses get grilled by the taxman over missing receipts for a packet of copy paper.
But money laundering isn't the only skeleton in the casino closet. Reports have emerged—some whispered, some screamed—about underage girls being trafficked and forced to ‘entertain’ VIP guests at these gambling dens.
Multiple witnesses allege that vulnerable young women, some barely out of school, are recruited under false pretences and coerced into working in “hospitality” roles that go well beyond mixing drinks.
What’s more, these establishments often run 24/7, with no proper surveillance, no record-keeping, and no enforcement of even basic labour laws. The casino bosses have paid off the right people for years—and it’s clear that some officials have developed a serious allergy to accountability.
The irony is almost poetic: while countries like Macau, Singapore, and even Las Vegas have strict regulations to track gambler profiles, enforce age limits, and ensure taxation, Sri Lanka still treats the casino industry like a black market bazaar with better lighting.
In Macau, gamblers must scan a QR code to register their identity.
In Singapore, citizens are limited on how often they can visit.
In the UK, even the purchase of lottery tickets is regulated down to the pence.
But in Colombo, you can drop $100,000 on a baccarat hand without so much as showing your passport, and no one bats an eyelid—as long as your Hawala agent gives the green light from Hyderabad.
Enter the National People’s Power (NPP) government, which has made some early noises about cleaning up the industry. In a country where gambling regulation has long been a punchline rather than policy, this might actually be a turning point.
Insiders suggest the NPP plans to:
Mandate digital registration for all gamblers entering licensed casinos.
Ban the use of unofficial payment systems (read: Hawala).
Introduce a central monitoring authority with the power to audit every casino’s books.
Enforce real-time taxation on winnings.
Impose licensing limits, age restrictions, and mandatory reporting for all large transactions.
The boldest of these proposals includes forcing players to scan a unique QR code at entry, linking them to a government database that tracks gambling habits, winnings, losses, and payment methods.
In other words: turning Sri Lanka’s casinos into something resembling a regulated industry, rather than an open-air money-laundering bonanza.
Of course, even the best laws mean nothing if no one enforces them.
Sri Lanka’s casino industry has survived—and thrived—for decades on political protection, corruption, and a don’t-ask-don’t-tell relationship with the authorities. Attempts at reform are usually met with intense lobbying, legal delays, and mysteriously timed “donations” to campaign funds.
And let’s not forget: the richest man in the country owns the biggest casino, and also controls banks, leasing companies, logistics chains, and media networks. Regulating him isn’t just difficult—it’s career suicide for most public officials.
Still, there is cautious optimism that the NPP, riding on a wave of anti-corruption populism, might just have the nerve—and the public backing—to take a sledgehammer to the roulette wheel.
Other countries have done it. China cracked down on Macau’s underground banking networks. The Philippines introduced biometric surveillance to catch launderers. Even Kenya, not exactly a paragon of governance, managed to rein in its online betting industry.
Why not Sri Lanka?
The tools exist. Digital KYC (Know Your Customer) is available. Tax tracking systems can be built. QR-based entry is already used in everything from cricket stadiums to COVID tracing apps.
All it takes is political will—and a refusal to be bought out by the same casino owners who’ve been treating Colombo like a Monopoly board for two decades.
In the end, it’s not just about gambling. It’s about what kind of economy Sri Lanka wants to be.
Does it want to be a regulated, progressive economy that can attract legitimate investors, or a seedy narco-adjacent tax haven, more known for its poker tables than its policies?
If the government is serious, it must audit every casino, prosecute tax evaders, ban illegal payment systems, and most of all, protect vulnerable women and children from being sucked into this high-stakes cesspool.
Because if it doesn’t, Sri Lanka won’t just be gambling with chips—it’ll be gambling with its soul.
And in that game, everyone loses.
-By A Special Correspondent
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by (2025-05-30 22:26:24)
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