Sri Lanka Emerges as New Hub for Former Philippine POGO Operators

The global landscape of online gaming is shifting noticeably westward. While the Philippines has taken a hard line against its once-flourishing offshore gaming operators, known as POGOs, a new destination for this multi-billion dollar industry has emerged in Sri Lanka. In particular, the Port City Special Economic Zone in Colombo appears to be becoming a magnet for syndicates aiming to serve markets across Asia and beyond. This involves not just simple casino sites, but complex networks that often reach deep into the gray areas of cybercrime.

The signs of this migration are very clear. In the high-rise buildings of Colombo, specifically in the Fort, Town Hall, and Havelock City areas, dedicated hubs for online gaming have been established. These firms often use the status of Business Process Outsourcing (BPO) companies approved by the Board of Investment to seek legal protection for their regulatory questionable activities. It is a cat-and-mouse game with local authorities, made more difficult by the sheer size of the groups involved.

Numbers and facts

The dimensions of this illegal or at least unregulated shift can be seen in recent police operations. Since the beginning of 2026, there have been more than 1,000 arrests of foreigners involved in cybercrime in Sri Lanka. The majority of those arrested are from China, Vietnam, and India. These individuals often worked without valid work permits for networks targeting markets where online gambling is strictly prohibited or heavily restricted. A prominent example is the KJC and P3Bet networks, which target the Vietnamese market from Sri Lanka. The King Group, targeted in a Vietnamese crackdown in July, is also said to have actively recruited workers for locations in Sri Lanka.

Financially and organizationally, these groups are extremely adaptable. They specifically recruit former POGO workers from the Philippines, Cambodia, and Vietnam. The promises are stability and a safe environment in Colombo's Port City. Often, it is not mentioned that Sri Lanka itself is working on tightening its laws. The Gambling Regulatory Authority Act already came into force on December 1st, 2025. It is intended to cover both land-based and digital gambling, but the specific implementing regulations are still pending. Operators are currently shamelessly exploiting this gap.

Background

Pressure on the industry in East and Southeast Asia has grown massively. China is now working closely with the government in Colombo to curb cross-border fraud and illegal gambling. The Philippine government under President Marcos Jr. has declared war on POGOs, leading to a massive drain of capital and personnel. Sri Lanka, in desperate need of foreign investment, now faces the dilemma of generating economic growth in Port City without becoming the new center for criminal gambling syndicates.

Deputy Minister for Digital Economy Eranga Weeraratne made it clear that the new rules will apply without exception.

"Sri Lanka’s planned gambling regulations would apply across the country, including Port City." - Eranga Weeraratne, Deputy Minister for Digital Economy

This statement shows that the government has recognized the seriousness of the situation. They are in close contact with Thailand and Cambodia to learn from their experiences in dealing with gaming syndicates. It is viewed particularly critically that local IT companies help operators obtain visas and work permits under the guise of legal technology services.

Why it matters for German players

For German players, this development is an important warning. When providers flee from regions like the Philippines to Sri Lanka, it is often to escape state control. Such portals usually have no license from the German Joint Gambling Authority of the States (GGL). Anyone who plays there is on thin legal ice. In Germany, the State Treaty on Gambling 2021 (GlüStV 2021) applies, which sets clear rules: deposit limits of 1,000 euros per month via the LUGAS system, a stake limit of 1 euro per spin on virtual slots, and connection to the OASIS exclusion file. Providers operating from Sri Lanka mostly ignore these player protection measures entirely.

Playing at such providers is illegal in Germany. Since these firms are not based in the EU and are often obscured via complex BPO structures in Asia, customers have no legal recourse in the event of disputes or denied payouts. German banks are also obliged to block payments to such illegal providers. There is therefore a risk that winnings will be frozen or one's own account blocked due to suspicion of money laundering. The security offered by a German license is irreplaceable.

What it means for GGL-licensed casinos

Legal German casinos with a GGL license face the challenge of competing with these unregulated black market giants. While GGL providers must pay taxes and meet high requirements for youth protection, the networks from Port City in Colombo can advertise with aggressive bonuses and without limits. For the German industry, this means education is more important than ever. Reputable operators must emphasize the added value of security and fair play to avoid losing players to dubious offshore providers. International cooperation between authorities, such as Sri Lanka is now seeking with China and Thailand, is the only way in the long term to effectively drain the global black market and protect the legal market in Germany.