The Nepalese government is reportedly moving to streamline and regulate the country’s casino industry.
Bill reins in casinos
Nepal’s Ministry of Tourism is expected to submit a draft of the Casino Bill 2018 to the country’s Cabinet next week, reports the Kathmandu Post.
Ghanshyam Upadhyay, a spokesperson for the Tourism Ministry, said that the introduction of the bill is to “enhance investment and employment in the industry which is expected to grow quickly”. Yet, industry insiders feel that the real purpose of the Casino Bill is to rein in existing casinos who continue to operate without paying taxes or royalties to the government.
Under Nepal’s Casino Regulation 2013, casino operators must pay a fee of NPR 20m (￡139,000; $185,000) to obtain a casino operating license. According to the report, they are also required to renew the license each year by paying 50% of the license fee. They are also obligated to pay the government a yearly royalty amounting to NPR 30m (￡208,000; $278,000) under Nepal’s Financial Act 2017-2018.
Interestingly, while the Ministry of Tourism scrapped the licenses of casino operators who defaulted on their royalty payments in 2014 – as per the Casino Regulation 2013 – a Supreme Court interim order has since allowed them to continue operating. This means that the Department of Tourism, which regulates the casinos, can’t collect taxes as it has removed the licenses.
Millions owed in royalties
According to the report, six of them are running under the Casino Regulation 2013 act. It adds that Casino Royale still owes millions and has not renewed its operating license. Since December 2016, it has only paid NRP 35.5m (￡246,000; $329,000) in several installments. Officials have also said that Casino Rad is another casino that has failed to pay all of its taxes to the government. It too still owes millions and has only managed to repay NPR 12.5m (￡87,000; $116,000). Eight mini-casinos located outside the Kathmandu Valley also have royalty arrears in the millions that still need to be paid to the government.
An official from the Department of Tourism has said that most casinos in the country are “taking advantage of the legal complexity” surrounding the issue of royalty payments. As the court has yet to issue a final verdict, according to the spokesperson, the government has decided to launch a new act.
“If the Casino Act is introduced, it will automatically supersede the Casino Regulation and also the court’s orders,” the official said. “It will also regulate the casinos in a more managed way and protect the investment of foreign investors.”
Casinos pressed to pay
In March, the tourism department issued a three-day ultimatum on three casinos and two mini-casinos in order for them to pay their taxes or face legal action.
At the time, officials with the department said: “We have served a three-day ultimatum on tax defaulting casinos and mini-casinos, and if they do not pay heed to the department’s orders, they will be punished as per the law.”
However, with a number of casinos still operating under the interim order, it looks as though they are continuing to get away without having to pay their royalties. With a new law being proposed, though, it remains to be seen how much longer this will go on for. For now, they may be operating on borrowed time.