Nepal government is working on revising the Casino Regulation 2081 to replace existing provisions. The Tourism Department, under the Ministry of Culture, Tourism, and Civil Aviation, submitted the draft regulation, which was then sent to the Cabinet for approval. However, the regulation was sent back to the ministry for amendments after disputes arose over a clause requiring casinos to hold at least 20 percent ownership in a hotel.
However, the ministry is yet to confirm if the amendments would be made solely related to the ownership provision or if other aspects of the regulation are also under review. It was stated that the current regulation, known as Casino Regulation 2070, needed an update to keep up with industry developments.
To enhance accountability and streamline operations
The proposed changes were designed to enhance accountability and streamline operations within the casino industry. However, it wasn’t smooth sailing. The proposed changes included mandating hotel ownership for casino operators. With the clause mandating that casino operators own at least 20 percent of a hotel drawing significant flak. Officials initially discussed a minimum ownership requirement of just 10 percent, but the Cabinet rejected this figure. Some tourism sector representatives claimed that the original draft did not include any hotel ownership clause at all. This has raised concerns about how the provision emerged later on in the process and whether it is in the best interests of the industry.
This proposal has drawn strong opposition from stakeholders in both the hotel and casino industries. Some fear that mandating hotel ownership could complicate business relationships, and that forcing hotels to hold shares in casinos may create conflicts of interest. There are concerns that it might serve specific business interests by transferring financial obligations onto hotels. This would ultimately result in additional financial strains on well-managed casinos while benefiting select groups.
Industry representatives recall that a similar concern was addressed through regulatory amendments in the past. This brings into question whether revisiting this provision could lead to renewed conflicts, especially if certain business interests stand to gain from such a rule.
Significant financial revisions
Apart from the 20 percent hotel ownership clause, the draft regulation also proposes significant financial revisions including increasing the minimum capital requirement for mini casinos. Under the proposed changes, mini casinos would be required to have a minimum capital of Rs 200 million, up from the current Rs 150 million. Larger casinos’ minimum capital requirements have also increased from Rs 250 million to Rs 300 million. The proposed revisions also suggest a rise in license fees. For mini casinos, the license fee would increase from Rs 10 million to Rs 15 million, while full-scale casinos would see a rise from Rs 20 million to Rs 30 million.
Another significant change is the expansion of restricted zones near international borders. The current regulation places casinos within 3 kilometers of borders in restricted zones, but the proposed revisions would increase this to 5 kilometers and a hike in annual royalty fees is also proposed.
