The Nepalese government is proposing new rules to tighten control over the country’s growing casino industry. These changes aim to reduce the share of foreign investment allowed in casinos and introduce stricter regulations for operators. While the goal is to create clearer laws and attract more international players, some casino owners worry these rules might cause problems instead.
Back in June 2018, Nepal drafted its first separate Casino Act to manage the industry better and encourage global operators. But now, instead of a separate law, the new casino rules are included in a bigger tourism bill currently before Parliament.
Currently, casinos in Nepal follow the Casino Regulation of 2013. Over the past decade, Nepal’s hotel industry has grown rapidly, especially five-star hotels, which increased from 10 to 26, including deluxe options. Four-star hotels also rose from just two in 2015 to 41 recently.
The proposed bill would cut the allowed foreign ownership in casino businesses to 49%, down from the current 90%, meaning domestic investors must hold the majority share. However, the bill does not say if Nepali citizens will still be banned from entering casinos, which leaves some uncertainty about the government’s stance on local gambling.
There has also been confusion about where casinos can operate. A 2019 government decision allowed casinos within 3 kilometers of Nepal’s borders, but the new bill wants to return to a 5-kilometer minimum distance, while letting existing casinos stay where they are. This back-and-forth has frustrated hotel and casino owners.
Chandra Prakash Shrestha, president of the Siddhartha Hotel Association, said changing border distance rules is unreasonable. Many hotels near borders cater to tourists from India and Bangladesh, so restrictions harm business. Some believe these policy shifts are influenced by politics disguised as security concerns.
During the Visit Nepal Year 2020, the government was more flexible with casino locations to boost tourism. Now, with several new five-star hotels near borders, investors worry the changing rules could hurt their future plans.
The new bill removes two types of gaming operations: electronic gaming houses in four-star hotels and light casinos in five-star hotels. Casinos cannot be run directly by hotels; instead, operators must form separate companies and lease casino space from hotels.
To prevent problems seen before, the bill requires hotels to own at least 10% of the casinos they host. This aims to hold hotels responsible if casino operators fail to pay royalties or disappear without paying debts, which has been an issue in Nepal.
Government data shows Rs1.69 billion was collected in casino royalties last year, but five casinos still owe Rs1.78 billion, with three of those considered illegal.
The bill also bans casinos near religious or culturally important sites and limits the number of licenses a company can hold. Companies must reduce to running only one casino by mid-2025 if they currently operate multiple locations under one license.
Casinos cannot transfer or lease their licenses to others, and all player records must be kept carefully. Any person or group buying more than 15% of casino shares needs government approval first.
If casinos fail to meet infrastructure or security standards, they have two years to fix this or face closure. Casinos that do not pay required taxes must repay them, and unauthorized operations will be shut down immediately with legal action taken.
Licenses last until mid-July each year and must be renewed annually. If a hotel loses its four-star rating or closes for more than three months, the casino license linked to it will not be renewed.
Casino operators wishing to move to another hotel need government approval. Foreign investors can only join joint casino ventures if the tourism department recommends it and the Cabinet approves.
To start a casino business, companies pay an application fee of Rs1 million, a casino license fee of Rs25 million, and Rs10 million for electronic gaming licenses. Annual royalty fees are Rs50 million for casinos and Rs15 million for electronic gaming.
If licenses are not renewed within 60 days of expiration, they are automatically canceled.
These new rules are meant to bring more control and transparency to Nepal’s casino industry but have sparked concerns from business owners who fear stricter laws could limit growth and investment.
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