Print Edition - 2015-02-01 | MONEY
Casino industry shows signs of recovery
Jan 31, 2015-
Nepal’s casino industry is showing signs of recovery after a disastrous 2014 when all gaming houses were shut down due to their failure to comply with the government’s new regulation.
Tourism Ministry officials said a number of new foreign and Nepali operators are willing to reopen casinos under the new regulation enforced on July 16, 2013. But old operators are still concerned by the government’s stringent regulations that involved a significant hike in fees.
Hong Kong-based Silver Heritage Limited is all set to receive final approval to run Shangri-La casino housed at Shangri-La Hotel & Resort.
Silver Heritage, which plans to run the gaming house in a joint venture with a Nepali company, had been issued a pre-approval to operate the casino two weeks ago by the Department of Tourism. It plans to invest $100 million in casinos and a five-star hotel in Nepal.
India’s gaming and hospitality firm Delta Corp is also eying to start a casino in Nepal. Delta has registered a company named “Vegas City International” with the Department of Industry. However, the company, which plans to invest Rs 3 billion in the project, is yet to apply for operating licence.
The company is the largest player in the organised gaming sector in India and has 200 live gaming tables in its casinos in Goa and Daman.
Government officials said Everest Casino, housed at Hotel Everest, and another casino at Soaltee Hotel is also preparing to reopen. The Tourism Department has asked them to apply for a new operating permit as per the new regulation.
“Yes, we see a sign of recovery,” said Sadhu Ram Sapkota, joint-secretary at the ministry’s legal division.
Sapkota, who leads a committee entrusted with the job of preparing a casino operating manual, said the ministry is committed to making easier the process of operating casinos in Nepal, realising casino as a potential tourism product.
He said once the operating manual is approved, it will have clear menus and simple instructions on tax and royalty payment, among other procedures. “The draft will be finalised by a week and will be submitting to the Tourism Minister for his approval,” he said, adding said no changes would be made to the casino regulation, whatsoever.
Nepal’s casinos were beaten up by the stringent new regulation that came into effect on July 2013. Under the regulation, casinos are required to have a paid-up capital of at least Rs 250 million. Based on the regulation, the Financial Bill 2013-14 had doubled the royalty amount that casinos have to pay to the government.
Under the bill, a casino is required to pay Rs 40 million annually. However, following casino operators’ complaints that the fees were too high to run their business, the Financial Bill 2014-15 slashed the royalty amount to Rs 30 million. Besides, they have also expressed concern on the rules of giving customers their winnings only after deducting 25 percent as windfall taxes.
Sapkota said the ministry has been discussing on these two major tax issues with the Finance Ministry. “However, a revision on these issues will not be made immediately as it needs high-level policy discussions.”
While old casino operators have been complaining that the paid-up capital and other fee requirements were too high, new entrants have reservations on the new system. “Under the new regulation, casinos cannot survive as it has many difficulties,” said Bhabishwor Aryal, general manager of Casino Royale. “The government should give opportunity to all casinos to open with a flexible policy.”
However, Sapkota said the new entrants are willing to operate casinos under the new regulation. “The capital requirement for casinos under the foreign direct investment is still nominal,” he said. “However, the requirement for Nepali operators can be termed high and be reviewed.”
Casino Royale housed at Hotel Yak & Yeti resumed its operation since Sunday after the Supreme Court issued a stay order to let the casino operate under the old rule. Royale was forcefully closed on November 23 last year, after Tourism Ministry wrote the Ministry of Home Affairs that it was being operated illegally. Subsequently, the casino moved the court.
Published: 01-02-2015 09:35