Getting gaming regulations right: Advocata calls for independence

The Advocata Institute is urging the Government to withdraw and redraft the proposed Gambling Regulatory Authority Bill, citing its most pressing flaw – the excessive and unchecked powers vested in the Finance Minister, which compromise the independence of the regulator and jeopardise the integrity of the industry.

Advocata Research Consultant Sudaraka Ariyaratne said: “The independence of a regulatory body is non-negotiable. Without it, we risk creating a framework that lacks credibility, is vulnerable to political interference, and cannot deliver on its mandate. In its current form, the Bill does not create a regulator; it creates a proxy.”

Under the draft law, the Minister holds a sweeping authority to appoint the regulator’s Director General (DG) and Board members, issue binding directives, and singlehandedly make regulations. Such over centralisation of power departs from international best practices and undermines the very rationale for a statutory regulator, which is to provide impartial, consistent, and transparent oversight.

Advocata proposes that appointments to the Board should be subject to approval by the Constitutional Council, the DG should be selected through a competitive process like in the private sector, and rulemaking power should lie with the Authority itself, mirroring models like Sri Lanka’s Securities and Exchange Commission (SEC Act, No. 19 of 2021).

While independence is the cornerstone issue, the draft Bill suffers from other critical policy shortcomings:

Key policy issues in the current draft

• No representation from the tourism sector: The Bill fails to include ex officio representation from the Sri Lanka Tourism Development Authority (SLTDA), despite the strong link between gaming and tourism. Hospitality is also not considered a qualification to be appointed to the Board.
  
   
• Lottery sector exemptions: The draft Bill exempts the National and Development Lotteries Boards from regulation, even though lotteries are a form of gambling. This leaves the State-run lottery industry unregulated, despite concerns over financial mismanagement and consumer protection.
  
   
• Lack of provisions for online gambling: The Bill ignores the growing online gambling sector, with no requirements for patron registration or control over foreign operated platforms. Advocata recommends explicit provisions to regulate access and monitor harmful effects, particularly those emerging from cross-border digital platforms who have promotional partnerships with local sporting authorities.
  
   
• Weak revenue oversight: The authority lacks any mechanism to trace operator revenues or enforce tax compliance. This leaves room for underreporting and revenue leakage.
  
   
• Inadequate penalties for violations: Offences under the draft Bill are met with fines as low as Rs. 100,000 and imprisonment up to two years, which is grossly inadequate for a billion-rupee industry.

Advocata said the Gambling Regulatory Authority Bill, while timely and necessary, must be reworked to ensure it establishes a truly independent, empowered, and credible institution. Advocata called on the Government to reintroduce the Bill after public consultation and expert review to address the structural and regulatory gaps that persist in the current draft.