Sri Lanka's parliament passed a law Wednesday to legalise gambling, despite strong criticism from opposition lawmakers who charged it would increase prostitution in the conservative Buddhist nation.
Lawmakers approved the legislation empowering President Mahinda Rajapakse, who also acts as the minister of finance, to grant licences to set up betting establishments in specified areas.
Casinos and horse-racing bookies have been operating in Sri Lanka for decades, exploiting loopholes in the law to evade an official ban on gambling.
Deputy finance minister Sarath Amunugama said the new law would regulate gambling and harness its potential to boost tourism, which has soared since May last year after the end to the island's ethnic civil war.
Amunugama said the government has identified Singaporean businesses to set up gambling operations in the island. He did not name the companies.
However, opposition lawmaker Dayasiri Jayasekera said the gaming zones established by the legislation will effectively become red-light areas where prostitution will thrive.
"What this law does is not only legalise gambling, but also legalises prostitution," Jayasekera said. Some casinos in the city are known as pick-up haunts for prostitutes.
With Wednesday's legislation, the government says gambling outlets must obtain licences by 2012 or cease to operate.
Violators will face a fine of 45,000 dollars and a five-year jail term.
The bill provides "for the designation of areas in which persons intending to start the business of gaming can set up their establishments".
Some of the country's cities already boast vibrant nightlife.
But Sri Lanka's tourism industry is keen to create more entertainment venues to attract high-spending foreign and domestic fun-seekers, although it recently banned billboards showing scantily-clad women following protests by Buddhist monks.
The number of tourists visiting the island has jumped by nearly 50 percent year-on-year in the first 10 months of 2010, after the end of nearly four decades of conflict.
The island's tiny stock market has also boomed, with the main index gaining nearly 95 percent so far this year as confidence returns.