The legality of Sri Lanka`s casinos is uncertain and the lack of supervision could open them to be controlled by criminals, quoting the International Monetary Fund (IMF), the Lankapage website said.
It said: The lack of regulation also made it difficult to implement anti-money laundering measures on casinos the IMF said.
`The legal status of casinos is not clear in Sri Lanka,` it said in a new report on the country`s financial regulations mechanisms to fight money laundering and terrorist financing.
On the one hand, casinos are prohibited under the Gaming Ordinance. On the other hand, under the Betting and Gaming Levy Act, a levy is payable to the Ministry of Inland Revenue by a person carrying on business of gaming.
` . . . large levies have in fact been paid by the casinos currently operating in Sri Lanka,` the IMF said.
Aside from collecting the levy, there is no actual supervision of casinos or `fit and proper` checks of owners, the report said.
`This situation facilitates the ownership or control of casinos by elements of organized crime and the capability of authorities to enforce the requirements of the FTRA (Financial Transactions Reporting Act) for casinos is doubtful.`
The government introduced the FTRA in 2006 to give it the powers to detect and stop money laundering and terrorist funding.
The IMF recommended the government clarify the legal status of casinos, either by imposing and enforcing a prohibition on casino operations or explicitly legalizing casinos and establishing a licensing and supervisory regime.
This includes measures to prevent the ownership, control or management of casinos by criminals.
The IMF warned that cash-intensive establishments such as restaurants, hotels, casinos, and construction companies could be used as front companies.
`Illegal profits are co-mingled with legitimate income in the placement and layering stages of money laundering.`