Nepalese government prepares to close down casinos

According to the Ministry of Finance, the government is preparing to introduce legislation which will make it compulsory for casinos to renew their registration annually and shut them down if they fail to pay taxes. The amendment is to be made through the new budget the government announced on November 16.

After a 10-year Maoist insurgency that eradicated night life in Nepal, a protracted political turmoil and a bitter legal tussle in the NRC itself, the casino industry is now facing unprecedented police action. “Actually, there's no law to govern the casinos,” says Wadhwa.

A casino has to pay us$ 286,000 dollars in royalties per year. According to the Inland Revenue Department, eight casinos in Kathmandu owe the government a total of us$ 7.8 million in taxes. "We have warned the concerned hotels to pay their dues," said chief tax officer Sishir Dhungana. "We will collect the dues from the hotel if the casinos don't pay."

The eight casinos in Kathmandu are raided frequently by police to arrest Nepali gamblers and this week, for the first time, police filed cases against the officials of five casinos in the capital, saying they regularly flouted the ban on Nepalis.

All casinos are operated by the privately owned Nepal Recreation Centre (NRC), at different hotels in the capital and in the tourist town of Pokhara. NRC claims the casinos have racked up huge losses due to the intervention of the country's Maoists - who demanded that they employ their cadres - which is marring their business.

The sixth casino, Casino Royale, was wrested away from the NRC by deposed king Gyanendra Shah's son-in-law Raj Bahadur Singh. Police superintendent Bhog Bahadur Thapa said a warrant has also been issued for the manager of Singh's casino.

The newest casino in the capital, Casino Venus as well as an older one, Casino Rad, are run by a group new to the industry, Valley Links Pvt, that also owns a third outside Kathmandu, Pokhara Grande. The sunny city of Pokhara has another casino besides the Grande, taking the country- total to 10.

Nepal is considered the gambling capital of South Asia. Although Nepalese are barred from entering casinos, NRC says most of its customers are locals. Last week, police arrested 28 Nepalese for illegal gambling. "Casinos are the root cause of criminal activities," said police officer Pradhumna Karki, who led the crackdown.

A Nepali gambler or anyone else gambling illegally faces a fine of nearly us$ 2.77 for a first time offence, a short imprisonment if found guilty again and a year behind bars for erring a third time.

On Thursday, police said they were preparing to issue warrants against casino operators for allowing Nepalese to gamble. When Casino Nepal, the first casino in Asia, was started in 1968 by then king Mahendra's younger brother, it was open only to foreigners on the ground that if Nepalis were admitted, they would gamble away all their money.

Nearly five decades later, though other sweeping changes have overtaken the former sleepy Hindu kingdom, transforming it into a federal secular republic, the restriction still remains in place, to the protest of hundreds of Nepalis and the industry.

Police say the crackdown on casinos is also due to the rising incidents of crime and violence like shootings and robberies enacted by desperate gamblers to pay off gambling debts. But the industry, that is also one of the biggest employers in Nepal and a prime tourist attraction, says the raids on casinos will dim Nepal's attraction to tourists, especially from India and Bangladesh who seek the casino packages.

“Nepal will celebrate 2011 as tourism year planning to bring in one million tourists,' says Wadhwa, whose husband and NRC chief Rakesh Wadhwa had in the past run casinos in Sri Lanka. 'We were planning night packages like we had in Colombo to attract tourists. We wish we knew what the government is actually thinking.”