Nepal: Government issued three-day ultimatum on tax-defaulting casino

Earlier this week, the Department of Tourism issued a three-day ultimatum on three casinos and two mini-casinos to bring defaulting casinos under stricter control. The casinos involved are
Casino Royale housed in the Hotel Yak and Yeti, Casino Rad housed in the Radisson Hotel and Casino Venus housed in the Malla Hotel owe millions in annual royalties and renewal fees, said Tourism Department officials.

As per the regulation, casino operators need to pay a USD 191,000 fee to obtain a casino operating licence. They are also required to renew the licence annually by paying 50 percent of the operating licence fee. Similarly, casino operators must pay the government an annual royalty of USD 286,000 set by the Financial Act 2017-18.

Moreover, they are required to deposit an amount equivalent to a year’s royalty fee at the Tourism Ministry as bank guarantee. The money must be deposited within two months of the start of a new fiscal year. The Financial Act 2017-18 has fixed the annual royalty for mini-casinos at USD 71,400.

In April 2014, the government had decided to shut down all casinos not fulfilling the Casino Regulation 2013 and scrap the licences of those defaulting on paying royalties. However, the three casinos have been continuing to operate taking advantage of an interim order from the Supreme Court allowing them to remain open.

According to the documents obtained by the Post, Casino Royale run by Surendra Bahadur Singh under Gilt Investment has been operating under the old regulation since the Supreme Court issued the interim order on March 28, 2016.

It has paid USD 336,490 in several instalments since December 2016 and still owes millions. Royale has not even renewed its operating licence.

Likewise, Casino Rad operated by Kishore Silwal under Rock International has paid only USD 119,154 and owes millions in taxes to the government, officials said. It has been operating the casino under the court’s ruling since May 2016. Casino Venus operated by Tapta Bahadur Bista has not paid a penny in royalties, officials said. 

Among the nine casinos currently operating in the country, six are running under the Casino Regulation 2013. The latest entrant is the five-star casino property Tiger Palace Resort at Kotihawa, Bhairahawa. Casino licences are issued to casinos housed in five-star hotels only. Other hotels are allowed to house mini-casinos where electronic gaming is available.

More than eight mini-casinos operated by Happy Hour and Rock International in different parts of the country like Mahendranagar, Bhairahawa, Nepalgunj and Jhapa have been operating under the court’s interim order. Following the court ruling, they have not renewed their operating licences.

In February 2013, the Supreme Court ordered the government to allow electronic gaming clubs (mini-casinos) to operate. The court has nullified the now-defunct Public Accounts Committee’s directives to shut them down until casino regulations are formulated.

According to Tourism Department officials, they have formed a committee to ascertain the actual amount of fees and taxes that the casinos owe the government. The committee includes representatives from the Department of Inland Revenue, Office of the Auditor General, Tourism Ministry and the Tourism Department.

“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.”