NEPAL

Local operators say new bill fails to address high fees, locals ban

Nepal has proposed new regulations to tighten oversight of its casinos, just five years after passing legislation to govern the sector, though some local operators have expressed disappointment at a ban on locals and high fees.

The latest bill seeks stricter action against casino operators that default on taxes and flee the country. The proposed Federal Tourism Act 2018 includes regulation on mountaineering, casinos, trekking and adventure sports.

It also envisages a powerful 19-member National Tourism Council chaired by the prime minister.

Aside from the authority to confiscate property of casino operators who default on taxes, the bill also allows authorities to seize assets, passports, and bank accounts in Nepal and abroad.

The bill, which is largely drawn from the Casino Regulation of 2013, also imposes strict rules against gambling by locals.

While foreign investors have largely welcomed the new bill, local operators have sought several amendments.

Chiranjibi Acharya, a spokesman for the Casino Operators Association Nepal (CAN), said the new bill retained many of the unpopular provisions from the Casino Regulations of 2013.

“Rather than making changes to many provisions of the regulation, which we had demanded earlier, the current proposal continues with the old ones,” he said.

The local operators had urged the government not to increase fees, such as raising the license fee from 20 million Nepali rupees to 30 million for casinos and from 10 million Nepali rupees to 20 million for mini casinos, which must be situated in four-star hotels.

“We have requested the government to provide us 50 percent discount in these fees,” said Acharya.

Acharya said local operators were lobbying for the government to allow Nepalese to gamble since “they were travelling to countries like India, Singapore, Sri Lanka and Cyprus for the purpose.” The CAN has also opposed the rule that says mini casinos should be 5 kilometres from the international border. “The whole idea of border casino is to attract customers from across the border. If the rule was included for security reasons, we haven’t seen any problem so far,” he said.

Provisions such as betting limits and the declaration of the number of chips and their value should also be removed from the proposed bill, he added. The bill imposes a windfall tax, though CAN is calling for the tax only to be imposed on winnings above 1 million Nepali rupees ($8,900).

Though the Ministry of Tourism has invited input from stakeholders, it isn’t likely to make amendments on fees and other revenues, said Suryabamsha Sharma Kandel, an under-secretary at the ministry.

Mike Bolsover, CEO of Silver Heritage Group, which runs Millionaire’s Club and Casino at the Shangri-La Hotel in Kathmandu and Tiger Palace Resort in Bairahawa, near the Indian border, said Nepal should engage an internationally experienced group to assist in drafting the bill. “The bill should reflect Nepal’s commitment to an international standard of rules and regulations and laws around casinos andintegrated resorts,” he said.

“It should promote sustainable growth and protect investors,” he said, adding that Nepal “required an independent enforcement agency or regulator.

He welcomed the proposal to take strict action against defaulters, but added that a Supreme Court stay order, which has allowed some casinos to run despite not having paid fees, should be rescinded. “Nepal should have one set of laws and regulations for all [operators],” he said.

Other industry insiders such as Nischal Chapagain, operations manager of Bally’s Casino at Hotel Malla, said if managed well, casinos can attract new players. “If there’s a holiday of 3-4 days in India, we receive a lot of gamblers from the country,” he said, adding in recent months there has also been a spike in Chinese players from the province of Guangzhou.

Nepal should have one set of laws and regulations for all.

The number of casinos in Nepal has reached seven after Pride Group, which operates Casino Pride at the Hotel Hyatt Regency launched Casino Palace at the five-star Hotel Del’ Annapurna in March last year. Others include Casino Mahjong at Hotel Soaltee, Casino Royale at Yak andYeti Hotel and Casino Rad at Hotel Radisson. These last two operate on the basis of an interim order from the Supreme Court.

Two more casinos are in the works.

Deltin Group, owned by Delta Corp Ltd, which runs India’s largest offshore casinos, is launching its first casino in Nepal at the five-star Marriott Hotel in Kathmandu, which will open its doors in February, 2019. While India’s Golden Globe Hotels, which runs Big Daddy Casino in Goa, is planning to open a casino in eastern Nepal near the Indian border. A five-star hotel that is under-construction in Char Ali of Jhapa district will reportedly house the casino.

Indian note ban seen hitting tourism, casinos

Nepal has banned the use of large denomination Indian currency notes in a move which tourism officials say may be detrimental to the industry.

According to a notification in the Nepal Gazette, people will not be able to carry bills of 200, 500, or 2000 rupees, local media reports. “The decision is a big setback particularly for cash-driven industries like tourism,” Basanta Raj Mishra, a senior tourism entrepreneur, was cited as saying.

“We were optimistic that the government was taking initiatives to make the Indian currency, the denomination of at least INR500, acceptable in Nepal targeting the Visit Nepal 2020 campaign.” “The major impact of the decision will be on the casino industry, hotels and restaurants,” he added.

Silver Heritage to sell Bhairahawa land plots

Australia-listed Silver Heritage, which operates the Tiger Palace Resort Bhairahawa, said it is seeking to dispose of unused land at the resort to release capital from its asset base while it carries out a strategic review of operations.

The company said the IR had a quiet month in October, as had been expected, due to the Indian Diwali holidays, but said its November drop was expected to be ahead of the six-month average at $1.86 million.

However, the hold rate was lower than normal at 11 percent compared with the average of 26 percent, resulting in underperformance for the month.