Insight NEPAL


NEPAL CASINOS SET TO REOPEN, BUT FURTHER CHANGE NEEDED


Nepal’s beleaguered casino industry is likely to be back in business soon, however operators are still concerned about new regulations and are urging the government to do more to attract much needed foreign investment.


The government closed the country’s seven remaining casinos for the first time in their history in April after they failed to comply with new rules that came into effect last July. However, the move had a major impact on an already struggling tourism industry, one of the mainstays of the economy.


According to the new rules, casinos were required to have a paid up capital of at least 250 million rupees ($2.6 million), with the minimum set at 150 million rupees for slot parlours, known as mini casinos.


A new annual license fee, to be paid to the tourism ministry, was set at 20 million rupees for casinos and 10 million rupees for mini casinos. Similarly, the annual royalty fee, paid to the inland revenue department, was doubled to 40 million rupees for casinos and set at 20 million rupees for mini casinos and was made payable in advance rather than in arrears.


Despite several extensions of a deadline for the casinos to come under the new regulatory regime, the operators failed to meet the requirements.


After the dramatic shutdown, operators, unions and employees began to put pressure on the tourism ministry to revise the rules. As a result, in July, the new government slashed the annual royalties by 10 million rupees for both casinos and mini casinos and is said to be considering further amendments.


The Tourism Ministry is also mulling over whether to review the paid up capital requirements, according to Amba Datta Bhatta, the executive director of Casino Association of


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Umakanta Parajuli, Joint Secretary of the Ministry of Culture, Tourism and Civil Aviation


Explaining the second closure of Casino Royale - "The Supreme Court did not advise casinos to resume operation without renewing license. This is why requested the home ministry to shut down its operations."


Article first appeared in Asia Gambling Brief.


Nepal (CAN). “The government has realised that the closures have incurred a loss to tourism. Hotels are reporting a decrease in occupancy. The government officials are positive about making amendments (to the regulations),” he said.


While the decision to slash some royalties was welcomed by the operators, they viewed other provisions such as a 25 per cent tax on casino winnings as detrimental to the business.


“The new rules stipulate that casinos can pay their clients only after levying a windfall tax of 25 per cent. This would complicate the matter as the rules don’t specify on how it would be taxed. Neither do we have any systematic tax collection mechanism in Nepal,” Bhatta told AGB.


Kumar Shrestha, the operations manager at


Casino Anna said: “I have visited casinos all over the world, but never found the windfall tax imposed upon the players. Nothing is clear about the tax. Will it be collected in an annual basis or every time a player wins a jackpot?” Casinos attract both regular players and occasional players. It’s not clear how will these two categories of people come under a tax system.”


Shrestha added casino employees had borne the brunt of the shutdown. “Our casino (Casino Anna) owes about 45 million rupees to the employees in gratuity, salary tax, provident funds etc. Some casinos also have yet to pay the rent to the hotels,” he said.


An ad hoc committee representing about 700 employees of Casino Anna met Deepak Chandra Amatya, the new tourism minister on October 17 to voice their concerns, Shrestha said.


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