The penny drops

Eight casinos which have not paid their dues are to be shut down

SANGAM PRASAIN
KATHMANDU, FEB 14 -

The axe has finally fallen. Eight casinos which have been delinquent in paying their royalties are on track to lose their operating licenses.

The Department of Revenue Investigation (DRI) on Sunday wrote to the Tourism Ministry to shut down Casino Rad, Casino Venus, Casino Grand, Casino Royale, Casino Anna, Casino Shangri-La, Fulbari Casino and Casino Nepal after they failed to clear their outstanding royalties and dues within the 35-day deadline set by the department.

After the stipulated time limit ran out on Friday, the department dispatched a formal letter to the ministry recommending action against the eight gambling houses as per the directives of the parliamentary Public Accounts Committee (PAC). With the DRI’s latest move, the eight casinos are virtually set to lose their licenses.

“We sent a letter to the Tourism Ministry on Sunday recommending that it scrap the operating licenses and close down the eight casinos that have failed to clear their outstanding royalties and dues to the government,” said DRI director general Mahesh Dahal.

Of the 10 casinos currently operating in the country, only two—Casino Tara at the Hotel Hyatt Regency and Casino Everest at the Hotel Everest—have cleared their dues.

PAC had directed the government on Dec. 28 to scrap the operating licenses of casinos that fail to clear their dues within 35 days. The DRI, based on PAC’s directive, had issued a strong notice to all the defaulting casinos telling them to either clear their dues or face cancellation of their operating licenses.

Following PAC’s directives, five casinos—Casino Tara, Casino Rad, Casino Venus, Casino Grand and Casino Shangri-La—paid their royalties for the current fiscal year. However, except for Casino Tara, the other four have been recommended for action by the DRI. Three casinos—Casino Venus, Casino Rad and Casino Grand—have been recommended for action as they have not cleared their interest payment for the current fiscal year even though they paid the royalty for the current fiscal year. According to Dahal, the operators of these three casinos had pledged to pay the remaining Rs 10.08 million within two months.

Likewise, Casino Shangri-La and Casino Royale paid the royalty and fines for the current fiscal year, but didn’t make payments of the previous year. The management of Casino Shangri-La, according to Dahal, had argued that the royalties and dues of earlier fiscal years were accumulated by Nepal Recreation Centre (NRC), its previous operator.

According to the DRI, these eight casinos still owe Rs 355 million to the government. Despite the constant pressure of revenue enforcement agencies, Casino Anna and Casino Nepal have not settled their dues. These two casinos owe Rs 244 million. Likewise, Casino Fulbari still has to pay Rs 62.1 million.

Following the DRI’s letter, tourism secretary Kishore Thapa said that the ministry would take action against the casinos based on the directives of PAC. “As per PAC’s directive, we must initiate action against them,” said Thapa.

As per the Finance Bill, casinos that fails to clear their royalties by mid-January would lose their operating licenses. “Their licenses will be automatically scrapped if they fail to clear their royalties by mid-January as per the Finance Bill,” said a senior official at the Finance Ministry.

“Those whose licenses have been scrapped should go for a new process to acquire licenses.” Finance Ministry officials said the government could recover the dues of from defaulting casinos by confiscating their properties. The government, through the new budget, has made compulsory renewal of casino licenses and annual licenses.

The government from the last six months has been tightening the screw against casinos after their repeated failure to clear royalties and dues. Continued defiance by casinos of government orders to clear their dues and bar Nepalis from entering their premises forced the government and PAC even to explore the possibility of moving them out of Kathmandu.

In a bid to regulate the casino business, PAC issued a series of directives to the government from drafting a Casino Act and working procedure for casinos to amending the existing Gambling Act.