About 110 miles (180 km) east of the capital Colombo, at a race in the town of Diyatalawa, the car collided with a crowd of onlookers and race organizers.
There were about 45,000 spectators present.
The cause of the collision was not immediately apparent, and it is unclear how the driver was feeling.
According to police spokeswoman Nihal Thalduwa, the vehicle went off course and collided with onlookers and officers.
He said that another twenty persons were receiving medical attention at a hospital while seven people—four of them officials—were slain.
Three of the wounded were seriously hurt.
Authorities have begun an investigation into the accident.
