KATHMANDU, Feb 22: There are many debates on the legal status of casinos operating in Nepal. And, the confusion has been paving the way for defaulters of casino royalties to put off their payment deadline in one or another excuse on the back of overlapping jurisdiction among government agencies to regulate them.
Delay in introducing stringent and clear laws to regulate casinos has encouraged casino operators to continue defaulting payment of the royalty owed to the government.
Worse still, government apathy has blocked possible foreign investment in this sector.
Government agencies keep passing the buck when it comes to taking action against unscrupulous casinos. That means around Rs 600 million is still to be recovered by the government from them.
Issues of casinos tend to become seasonal. Then Legislature Parliament’s Public Accounts Committee (PAC) issued a number of instructions to the government to take immediate steps to check the anomalies that have stopped the government from recovering hefty dues that casinos owe the government.
The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) initiated the process of drafting the Casino and Electronic Gaming bylaws two years ago. That draft is yet to be finalized.
The ministry shelved the draft for almost a year after its proposal to allow Nepali gamblers into the casinos was heavily criticized by finance ministry officials.
“We have not yet received a response from the Ministry of Law and Justice (MoLJ) on the contents proposed in the draft. When we get it back from MoLJ, we will immediately forward it to the cabinet,” Ranjan Krishna Aryal, the joint secretary at the MoCTCA told Republica.
MoCTCA, which is supposed to play a central role in regulating casinos, is only focusing its efforts on getting the payment deadline extended for the casinos.
The ministry recently wrote to the Inland Revenue Department (IRD), which is responsible for recovering the dues from casinos, to extend the deadline by a month.
“At the request of MoCTCA, we are extending the deadline,” an official at MoCTCA said.
Despite repeated extension of the deadline, casinos are not showing any seriousness in living up to their commitments to clear the outstanding dues on time.
Some officials, however, opined that such confusion and anomalies in casino operation is largely due to overlapping jurisdictions of government agencies that handle casinos.
MoCTCA issues the license for casinos where as revenue collection comes under the jurisdiction of IRD under the finance ministry. On the other hand, the Home Ministry is responsible for checking if there are Nepalis gambling at the casinos and of taking action against that.
“Since our existing laws do not have a clear provision on casinos, it has set overlapping authorities in handling casino issues and we failed to regulate this sector,” an official at MoCTCA said.
Though MoCTCA publicly instructed all casinos operating in the country to update their statuses, none of them have complied.
“Most of the casinos in operation shunned our instructions by submitting insufficient information,” said Mohan Krishna Sapkota, the joint secretary at the MoCTCA.
Tourism entrepreneurs said that in absence of a clear cut policy, confusion over the legal status of the casinos and frequent labor unrest there has hit the sector.
Bharat Joshi, resident manager of Hotel Yak and Yeti, which runs Royal Casino, said there was a massive decline in tourist arrivals through casino packages.
“A large number of Indian and Bangladeshis were visiting Nepal for the casinos. We are forced to divert the guests to alternative destinations,” he added.
THE ISSUE OF ENTRY TO NEPALI GAMBLERS
The issue of whether to allow Nepalis to enter casinos has long been the most controversial issue.
The existing Gambling Act 1963 bans Nepali citizens from entering casinos for gambling. However, the government has failed to enforce the law effectively by putting in place a stronger monitoring mechanism.
“It is an openly known fact that a majority of our clients are Nepali nationals. In some cases some Nepali punters enter the casinos with fake passports of other South Asian countries making it difficult for us to deny them entry,” a casino manager said.
Bod Bikram Pandey, the director of Casino Shangri-la, is of the view that the provision to allow only high taxpayers will be instrumental in controlling the number of Nepali casino goers.
“We can stop a huge amount of money from flowing out of the country for casino packages if we permit to high-end Nepalis to gamble at casino in their own country,” said Pandey.
The Department of Revenue Investigation (DRI) had recommended the government to scrap operating licenses of eight out of the ten casinos operating in the country.
However, it never saw implementation. MoCTCA at that the time scrapped the license of only Nepal Recreation Centre (NRC) that ran the casino at Hotel Soaltee.
The operation of the other casinos continued as the star hotels accommodating the casinos handed over the management to a new company while some of the casinos are being operated by staff themselves.
“All the staff are backed by political parties, making it difficult for us to take action against them,” the official at the ministry said.
As per the Financial Act, casinos failing to clear royalties will lose their licenses and gambling houses that loses its licenses will have to start afresh to obtain a new one.
Amid prolonging anomalies, a recent cabinet meeting decided to renew the licenses of the casinos that cleared their dues.
“However, it’s true that the operation of casinos at present is illegal if the present legal system is anything to go by. But we are lagging behind in enforcing the laws,” said Aryal.