New ‘Ayubo’ Lottery Will Only Make the Poor Fund Free Healthcare: Advocata Institute

The government’s new ‘Ayubo’ daily lottery will result in lower-income citizens footing the bill for a universal free healthcare system accessible to all wealth brackets, the Advocata Institute warned. 

The warning follows the launch of the lottery last week by the National Health Development Fund (NHDF), the Ministry of Health and Mass Media, and the National Lotteries Board (NLB), with proceeds earmarked for the NHDF to finance state healthcare services. 

Advocata pointed out that the overwhelming majority of lottery consumers in Sri Lanka belong to lower-income demographics. Economically, lotteries function as “inferior goods,” meaning demand is concentrated among lower-income groups and falls as personal income increases. As state healthcare is open to all citizens, the funding mechanism effectively makes the country’s poorest segments subsidise healthcare even for higher-income groups who could otherwise afford private healthcare. 

In addition to its regressive nature, the Ayubo initiative suffers from structural flaws in state lottery management. The National Lotteries Board and the Development Lotteries Board (DLB) maintain a state-owned duopoly over lottery distribution in Sri Lanka, creating two major systemic issues: 

First, administrative bureaucracy and operational inefficiencies within state bodies generate high overhead costs. This would significantly diminish the net revenue allocated to public health through Ayubo. 

Second, persistent financial mismanagement and corruption within state lottery operations undermine public trust. Reports from the Auditor General, alongside recent 2026 investigations by the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) into NLB management, highlight ongoing risks of embezzlement and misappropriation. These vulnerabilities create significant uncertainty over how much of the revenue from Ayubo will actually reach the health sector. 

Advocata notes that if the government intends to fund public healthcare through gaming revenues, it should target high-income segments of the industry instead. As detailed in Advocata’s 2024 report, A Comprehensive Policy Framework for the Gaming Industry of Sri Lanka, authored by Dr Sudaraka Ariyaratne, the state could establish a far more sustainable funding path by taxing currently exempt online gambling platforms and enforcing stricter regulatory oversight and tax compliance on physical casinos through the General Revenue Authority (GRA).