The current Casino Regulation is in the process of being amended as the government has revealed that even the casinos that have already cleared their dues are hesitant to jump back into business with the new rules. Casino operators have been unwilling to start up business due to renewal fees and unclear provisions in regards to windfall tax gains.
Casino Regulation-2013 sought to attract foreign investment in casinos and the law was developed with this in mind, however, at the request of many local operators, the ministry is doing some groundwork to amend the regulations.
There are only two operating casinos under the new regulation, which was introduced in July of last year. Casino Mahjong, and Millionaire’s Club and Casino at Shangri La opened this year and next month Casio Pride will open at the Hyatt – all operating casinos in the country are in Kathmandu. Casinos had until April of 2014 to complete formalities to remain open under the new regulations, but none were able to meet the new criteria, including electronic gambling companies.
Based on new provisions, casinos need to have Rs 250 million in paid-up capital along with a bank guarantee of Rs 30 million which will ensure royalty. The license renewal fee has been boosted to Rs 20 million each year and casinos are required to submit windfall gain tax to various tax offices prior to making any payouts to players.
Prior to this, there were no such provisions and the annual royalty cost was just Rs 40 million. Any casino that did not pay the royalty fee or complete formalities was shut down by the government. There were 10 casinos and three different electronic companies operating. All casinos in Nepal were shut down on April 20th last year.
The word “on the street” is that if the government will lower the paid-up capital and license fee, investors will be willing to resume business in Nepal. All of the casino opened or licensed so far under the current policies have opened with majority ownership by foreign investors.