Trust and money fueling Sri Lanka’s illegal 'box cutting' lottery: Expert
Sri Lanka’s National Lotteries Board (NLB) has recently uncovered a large illegal gambling operation linked to a scam known as “box cutting”, where people place bets on just the last two digits of the winning numbers from the Mahajana Sampatha lottery. Following the discovery, the NLB carried out several raids across affected areas. These actions led to multiple arrests and court convictions as part of efforts to stop the spread of this unlawful activity.
In a key judgment last month, the Bibila Magistrate’s Court sentenced K.M. Ajith Bandara, a resident of Meegahawagura, Medagama, to 10 months of rigorous imprisonment—two months in jail and an eight-month suspended sentence (Case No. 59967). Another individual, J.G. Mangala Prasad Damith Kumara of Miyanakandura, received a similar sentence under Case No. 59968 for running an illegal gambling den.
NLB urges citizens to avoid illegal lotteries
Meanwhile, the NLB has directed local police stations to continue legal proceedings against other individuals involved in unauthorised gambling activities. The Board has also issued a public appeal, urging citizens to avoid illegal gambling activities, regardless of the weather or convenience of street-side sellers.
Inside the scam: Why box cutting persists
Following the court ruling, 8gfg.shop spoke with a senior Colombo-based iGaming expert to understand how the crackdown might influence the future of Sri Lanka’s gambling industry.
“Box cutting is basically a nefarious scam in which people tamper with lottery tickets — sometimes using unsold ones or even producing counterfeit ones — and resell them as if they’re official. It’s gained popularity because it’s a cheap, low-risk way for illegal operators to make a quick buck. Unfortunately, it’s turned into an underground industry that many people either don’t know is illegal or simply ignore the risks for the chance of a win,” the expert explained.
On being asked why people still choose these illegal games when legal lottery tickets are widely available, he said, “A lot of it comes down to money and trust. Illegal lotteries will often provide better odds or allow people to wager with less money. Some players are drawn in by the “better deal” idea, especially if they’re desperate financially. Others may simply not trust the official system or like the convenience and familiarity of the local, under-the-counter sellers they know.”
Repercussions for the NLB and the broader market
When asked what this situation means for the National Lotteries Board, the expert said, “It’s a huge success. All of the illegal or counterfeit tickets that are sold are money that should have been made by the official system — and, by extension, money that would have gone to public services like schools, hospitals, and social programmes. Not only does this cut into revenue, but it also damages the reputation of the NLB. When there are illegal games everywhere, it blurs the lines and makes it harder for people to know what’s legitimate.”
Can the crackdown shift public perception?
On whether the recent arrests might change public behaviour towards gambling in the country, he said, “It might — especially if the government keeps the pressure on and is consistent in issuing real penalties. People tend to sit up and take notice when there are arrests and punishments are handed out. But real reform will not be overnight. To change public behavior, more is needed than crackdowns — like public education, visible community payoff from legal lotteries, and a fairer, more comprehensible system overall.”
Speaking on if this development could prompt changes in Sri Lanka’s lottery regulations, the expert noted, “Likely. Disabling ‘box cutting’ might be the wake-up call that regulators require. We might witness movement toward electronic ticketing systems, more stringent monitoring, and even possibly technological fixes to tampering. The more secure and trustworthy the official lottery is, the harder it will be for illegal versions to compete.”
Legal Lotteries: Fueling public services and jobs
Highlighting the importance of legal lotteries, the NLB had recently emphasised that around 20% of ticket revenue supports over 20,000 agents, dealers, and distributors. More than half of all proceeds go toward prize payouts, while the remaining amount contributes to the General Treasury, public welfare, and tax revenues.
The expert also spoke on how legal lotteries benefit the economy and local employment, stating, “In more ways than most are aware. Legal lotteries generate funds for essential services — health, education, and community development. They also create jobs, not just for the ticket sellers, but in printing, marketing, logistics, and administrative staff. When done right, the lottery is not a game of chance — it’s a revenue stream that gives back to society.”
Gambling regulation in Sri Lanka
At present, Sri Lanka lacks a centralised regulatory body to oversee its growing gambling sector. In response, the Cabinet on 21 April 2025, approved a draft bill—the “Gambling Sports Regularisation Act”—to establish a Gambling Regulation Authority. If passed in parliament, this authority will be responsible for regulating onshore and offshore casinos, gambling on ships, and online betting platforms.
This authority will monitor all types of gambling in the country, including casinos, online betting, and gambling on ships. The move comes as the gambling sector grows, especially in areas like Colombo Port City. In March, Hong Kong-based Melco received a 20-year licence to run a gaming venue in Sri Lanka, highlighting the need for proper regulation.
Currently, the national lottery is the main form of legal gambling in the country, operated by the since 1963. Physical casinos operate under strict government approval, mostly in Colombo. Legal sports betting is limited to on-site horse racing wagers, while all other forms of sports betting and online gambling remain illegal. Despite restrictions, Sri Lanka continues to be a target for foreign and unlicensed gambling operators.
The government’s effort to establish a central regulatory body for gambling in Sri Lanka appears to be part of a broader shift in South and Southeast Asia in recent months — a news trend that regulators in other regions may want to follow over time.
