NEPAL

Tiger opening marks newphase for Nepal’s casinos

Tiger Palace Resort Bhairahawa, Nepal’s first large-scale IR, won its casino license at the end of December, marking a major step forward in the country’s gaming sector, which now appears poised for expansion.

The resort, which is operated by Australia-listed Silver Heritage Group, hosted its first major event on New Year’s Eve and plans a “grand launch” in March. It says it expects to commence its VIP business in the fourth quarter of 2018, with a total of eight tables open in its private gaming area, along with the opening of its fine dining venue and some additional expansion.

The company and other investors are counting on the lure of untapped demand in neighbouring India and increased business traffic. The industry is one of the oldest in Asia, but has been through a transitional period, with new international standard gaming regulations introduced in 2013. Tourism in the country was also hit hard by an earthquake and temporary border issues in 2015.

However, the picture is now brightening. Nepal recorded a 31 percent gain in tourist arrivals for 2016 to 729,550, although these numbers don’t include those crossing by land from India. The economy has also rebounded, recording growth of 7.2 percent in the fiscal year ending mid-July, its highest rate in more than 20 years, though momentum is expected to slow slightly this year. The foreign investment pipeline into the country also looks healthy, bringing in a steady flow of business travelers, which is seen as benefiting the casino industry.

Silver Heritage has led the charge among foreign investors, opening the Millionaire’s Club and Casino at Shangri-La Hotel in Kathmandu in 2015. It was one of the first under the new regulatory regime, known as the Casino Rules 2070.

The group is convinced the growing Indian middle-class population will be a major driver for Nepal’s tourism industry and has already bought land to build another IR along the border in eastern Nepal.

The Indian province of Uttar Pradesh, just across the border, has a population of more than 215 million, with a burgeoning middle class and Indians are able to travel freely to Nepal across a porous border. India is forecast to have the world’s largest middle class consumption of about $12.8 trillion annually by 2030, compared with $10 trillion in China.

“The resort and its location appeals to all of India and in fact to all international travellers, for example our Northern neighbour China, Thailand, and the rest of Asia. Where else can you visit the birthplace of Buddha, go on safari with tigers, elephants and rhinos and see Everest all in one day, let alone on one holiday?,” Silver Heritage CEO Mike Bolsover said.

Sri Lanka’s largest casino operator, Bally’s Casino Colombo, is also entering the market with the launch of the Casino Venus at Hotel Malla in Kathmandu. While the newest entrant will be Deltin Group, which is owned by Delta Corp Ltd, operator of India’s largest offshore casinos. On Oct. 25, the group released a statement saying it will build a world-class casino at the five-star Marriott Hotel in Naxal, Kathmandu.

The resort and its location appeals to all of India and in fact to all international travellers, for example our Northern neighbour China, Thailand, and the rest of Asia. Where else can you visit the birthplace of Buddha, go on safari with tigers, elephants and rhinos and see Everest all in one day, let alone on one holiday?

Everest Hospitality and Hotel Private Limited, which owns the four-star Fairfield by Marriott in the tourist district of Thamel, signed an agreement to build the luxury casino. “We are very exhilarated to bring a luxury hotel together with a world class casino entertainment to Nepal and eager and excited to welcome high profile international tourists and casino clientele,” Gaurav Agarwal, the company’s managing director said in the press statement.

The hotel is scheduled to launch in June 2018.

With the completion of these three new casinos, the number of casino currently operating in Nepal will reach 8. Prior to the introduction of Casino Regulations in July, 2013, there were 8 casinos in the capital Kathmandu and two in resort town of Pokhara in western Nepal. The new rules stipulate that casinos should have paid-up capital of at least 250 million Nepali rupees ($2.41 million), with the minimum set at 150 million Nepali rupees for mini-casinos. The royalty alone is set at 30 million Nepali rupees per casino a year and 7.5 million rupees for mini-casinos, payable by the end of each fiscal year. An annual fee for renewal of license, to be paid to the tourism ministry, is set at 500,000 Nepali rupees for both casinos and mini-casinos.

Communists win elections, promise political stability

Nepalis went to the polls in late 2017 in a two-phase legislative election, the first since the abolition of the monarchy.

The elections returned the Left Alliance, a coalition of Maoist and Marxist Leninist parties, to power, although a formal government isn’t expected to be established until March. They won nearly 70 percent of seats, replacing the ruling centerleft Nepali Congress.

The alliance is promising economic growth and political stability.

Nepal growth seen steady at 4.5 percent

Nepal’s gross domestic product is expected to grow at 4.6 percent in the current fiscal year, ending in July, before slowing to maintain a 4.5 percent rate for each of the next three years, according to the World Bank in its Global Economic Prospects report. T

he bank says the slight moderation is due to the winding down of reconstruction work following the 2015 earthquake.

Floods held back growth in the second half of 2017 and adverse weather will continue to be a risk for the economy, the report said.