COPF Sri Lanka scrutinizes delay in gaming regulator establishment

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Sri Lanka’s Committee on Public Finance (COPF) has initiated an inquiry into the delayed establishment of a gaming regulator, a critical move for attracting investment and recovering substantial lost revenue. The COPF summoned the Director-General of Fiscal Policy to address this delay and investigate the potential financial impact on the government.

During the COPF meeting, it was disclosed that the gaming regulator had not been established by the agreed-upon deadline of December 31, 2023. Committee members underscored the importance of the regulator in attracting investments and mitigating revenue losses, emphasizing the urgent need for the associated legislation. They highlighted the significant financial setbacks resulting from inadequate regulations.

Representatives from the Finance Ministry stressed the necessity for additional expertise to construct a robust revenue model comparable to Singapore’s successful framework. To address this, the Committee instructed the Director-General to provide detailed information on both physical and online casinos, including tax amounts. Moreover, they requested a proposed plan to recover outstanding taxes from the gaming sector.

The COPF has granted a two-week extension for the Director-General to compile the necessary information while also anticipating the completion of the legislation by March 31, aligning with prior agreements.

In a broader legislative context, the Committee approved the Secured Transaction Bill, a pivotal step toward implementing the Secured Transactions Act of 2023 in Sri Lanka. This Act establishes clear rules for securing transactions involving movable property, prioritizing and protecting creditors’ rights. A key component of this legislation is the creation of the Secured Transactions Registration Authority, aimed at streamlining processes and enhancing SMEs’ access to credit for growth. The Act allows individuals to use movable assets, such as household appliances or business equipment, as collateral to secure loans for business development, fostering increased credit availability while ensuring transaction integrity through the registry authority to guard against fraudulent activities.

Beyond gaming regulation, the Committee also considered an Order under Subsection (4) of Section 3 under the Strategic Development Projects Act No. 14 of 2008 and the Regulations under the Imports and Exports Control Act, No. 1 of 1969. Following deliberation, the Committee approved the said Order and Regulation.

The COPF’s proactive stance on the gaming industry reflects its commitment to robust regulatory frameworks, financial transparency, and the facilitation of economic growth through various legislative measures.

As the gaming regulator remains a focal point of discussion, the Committee’s decision to extend the deadline and demand detailed plans underscores the urgency to address regulatory gaps and enhance the financial landscape of the gaming sector in Sri Lanka.