The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development

¶ 01 Hon. Speaker, I move, “That the Bill be now read a Second time.”

¶ 02 In addition, I present the items at Nos. 2 and 3 on the Order Paper—Regulations under the State Debt Management Act and under the Foreign Exchange Act.

¶ 03 Of the three matters for debate today, first is the Second Reading of the Gambling Regulatory Authority Bill, with the primary objective of establishing a single authority to regulate and supervise gambling activities. Although laws exist—the Betting on Horse Racing Ordinance, the Gaming Ordinance, and the Casino Business (Regulation) Act, No. 17 of 2010—these mainly provided for limited fiscal measures (tax collection) and did not comprehensively regulate ancillary activities.

¶ 04 The 2010 Act provided for licensing and designating areas for casino businesses, but no regulations were issued for years. Thus, gambling, betting and casinos operated without proper regulation. This Bill addresses that gap. Gambling intersects the economy, tourism, and society; regulation is expected to ensure transparency, accountability, good governance, and generate state revenue. The Authority will determine scope, activities permitted/prohibited, licensing, and limitations, and set minimum standards. It will also combat illicit activities linked to gambling, including money laundering and terror financing concerns. Sri Lanka is currently on the FATF grey list. Strengthening our AML/CFT framework through this Bill supports our target of exiting the grey list at the mutual evaluation expected in March 2026.

¶ 05 The Authority will also mitigate social harm, protect children, and promote responsible gaming. The Authority will comprise seven members: ex officio or nominees of the Commissioner General of Inland Revenue, the IGP, the Treasury Secretary, the Head of the Central Bank’s Financial Intelligence Unit, and three nominees of the Minister of Finance. Their remit includes crime prevention, curbing illegal gambling, licensing, etc.

¶ 06 Three existing instruments will be repealed in tandem: the Betting on Horse Racing Ordinance, the Gaming Ordinance, and the Casino Business (Regulation) Act, No. 17 of 2010. In August 2022, regulations were issued and four existing casinos were licensed, with timeframes for other operators to obtain licenses; by end-2022, two further licenses were issued—six licenses currently operate.

¶ 07 The Bill will also distinguish and, where appropriate, exclude social games lacking wagering elements, while providing regulatory tools for emergent gambling forms, including online. The National Lotteries Board and Development Lotteries Board, governed by Acts of Parliament and subject to COPE/COPA oversight and audit, are excluded from the Authority’s purview.

¶ 08 Second, Regulations under the State Debt Management Act, No. 33 of 2024: Sound public debt management is vital, particularly given the fragile starting point of the economy. Based on 2022 assessments with development partners on Public Debt Management Performance, weaknesses were identified: dispersed liabilities, off-framework borrowings and guarantees, transparency gaps, and on-lending issues. The Regulations address four areas: issuance of guarantees; on-lending; framework for agreements with lenders (e.g., World Bank, JICA); and financial leasing by state entities. The Debt Management Office and the Debt Management Coordinating Committee will appraise guarantees and on-lending requests, assessing financial statements and audits to ensure institutional sustainability. Support is focused on development projects aligned to the State Finance Management Act, No. 44 of 2024. Our target is to manage public debt to 95 percent of GDP by 2032; the measures support stability and prudent management.

¶ 09 Third, a Direction under Section 22 of the Foreign Exchange Act, No. 12 of 2017, concerning capital account outflows. Temporary capital controls introduced from April 2020 were maintained through December 2024 to stabilize the economy. With stabilization gains across fiscal management, price stability, and reserves, we now propose calibrated easing for two categories of corporate outward remittances.

¶ 10 In closing, misleading claims have circulated alleging money printing of Rs. 1.2 trillion. Under the current framework, the Government cannot directly monetize deficits. “Money printing” is often conflated with broad money growth; reserve money and broad money are under Central Bank operations (OMOs, reserve management), publicly reported weekly. Any broad money changes reflect monetary operations, not fiscal monetization.

¶ 11 External challenges such as the US reciprocal tariff were addressed through sustained engagement, reducing the applicable rate from 44 percent to 20 percent—an interim outcome amid global policy shifts beyond our control. We will continue responsible engagement with all partners.

¶ 12 I commend the Bill and Regulations to the House.

¶ 13 Question proposed.