Pay royalty or face rap, regulator tells casinos

  • Casino Royale, Casino Rad and eight others owe Tourism Department millions in royalties
- Post Report, Kathmandu

Mar 11, 2018-

After serving a three-day ultimatum, the Department of Tourism on Saturday issued a public notice directing the royalty defaulting casinos and mini-casinos to settle the payment within 35 days or face legal action. 

The department said that two casinos-Casino Royale housed in the Hotel Yak and Yeti, Casino Rad housed in the Radisson Hotel-and eight mini-casino operated outside the Kathmandu valley owe millions in annual royalties. The department has asked these gaming houses to settle the annual royalties including the additional fees and penalties.

“If they failed to clear the dues, the government will take stern action against them as per the law,” said the department officials.  

In April 2014, the government decided to shut down all casinos not fulfilling the Casino Regulation 2013 and scrap the licences of those defaulting on royalties. However, these casinos and mini-casinos continue to operate taking advantage of Supreme Court’s interim order that allows them to remain open.

As per the regulation, casino operators have to pay Rs20 million 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.

Casino operators must pay the government an annual royalty of Rs30 million 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 Rs7.5 million.

According to the department officials, the interim orders allow the gaming houses to operate under the old regulation, but they are legally required to pay the annual royalty fixed by the Financial Act. 

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

It has paid Rs35.3 million in several installments since December 2016 and still owes millions. Royale has not renewed its operating licence.

Casino Rad operated by Kishore Silwal, Kausal Silwal and Usha Thapa Silwal under Rock International has paid only Rs12.5 million and owes millions in taxes to the government, officials said. The owners operate the casino under the court’s ruling since May 2016. As per the notice four mini-casinos housed at Hotel Sweet Dream in Mahendranagar, Hotel Lacoul in Bhairahawa, Hotel Sneha in Nepalgunj and Hotel Dhaka in Kakarvitta continue their business without paying the annual royalty.

Four other mini-casinos under Rock International are housed at Hotel Sathai in Dhangadhi, Hotel Nans in Bhairahawa, Hotel Suraj in Birgunj and Riya’z Hotel 

in Kakarvitta.

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 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.

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

Published: 11-03-2018 08:27

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