Nepal Closes Two Casinos After Racking Up Millions in Unpaid Licenses and Royalties

Posted on: February 11, 2022, 06:35h. 

Last updated on: February 11, 2022, 12:49h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Despite a return to business following COVID-19, two casinos in Nepal still haven’t caught up on outstanding royalties. Both are being shut down by the government.

Yak and Yeti Hotel
A greeting party awaits guests at the Yak & Yeti Hotel in Nepal. The hotel has lost its five-star status, as well as its casino. (Image: Hotels.com India)

A collection of casinos in Nepal have racked up a bill worth around $16.5 million in unpaid royalties, according to the Kathmandu Post. Some have already closed their doors and will never make good on the debt.

As a result, the government’s patience has run out. Casinos either need to pay up or face closure, the government says. To show it’s serious, they’re taking action against two operational venues.

Multi-Million Dollar Debt

Casino Royale, located inside the Yak & Yeti Hotel, has become a target of the government. It reportedly owes $3.5 million after not paying its bill for over two years.

Nepal’s Minister for Culture, Tourism and Civil Aviation, Prem Bahadur Ale, is looking for “arrears up to fiscal year 2020/21,” as well as renewal fees and royalty fees accumulated since then.

The hotel is suffering as well. It has lost its five-star classification, given by the government. However, as of yesterday, it was reported that everything was operating normally.

Dreamland Hotel in Nepalgunj received numerous notifications that it had an outstanding debt with the government, according to the news outlet. However, because it continuously ignored calls to pay up, it will shut down as well. It owes $31,500 for its operational license and another $3.15 million in outstanding royalties.

Legal Confusion Leads to Legal Conflict

Nepalese casinos pay $165,800 million for an initial license and around $82,900 each subsequent year. They also have to pay an annual royalty of $331,600 to the government, in accordance with the country’s Financial Act.

At one time, launching a casino seemed like a good idea. There was a lot of activity, with a number of gambling venues opening as independent operations inside local hotels. However, poor planning and lax money management got in the way. Suddenly, hotels were held liable for the outstanding debt.

However, in 2017, court justices determined that this wasn’t accurate. In the meantime, some of the casinos were operating, continuing to accumulate more unpaid bills.

The following year, Nepal’s Supreme Court overruled the justices’ decision. This, once again, gave the government the ability to target hotels when casinos inside them didn’t pay their bills. By this time, the amount of unpaid debt was more of a mountain than just a small pile.

COVID-19 Effect

In 2020, COVID-19 began to make its appearance. In March of that year, all Nepalese casinos, mini-casinos, and gambling houses closed. They stayed that way until September of last year.

During that time, the government waived the royalty fees. However, it came with a stipulation. Only those operators who were up to date on their regular payments qualified. Less than 10 of the more than 30 venues met the requirement.

By the time the COVID-19 lockdown disappeared, it was too late for a number of operators. Having tried to fight the government over who pays what royalties and then dealing with an 18-month closure, there was no longer a way out.

The government has now given them a way out, whether they wanted it or not. As of now, 22 casinos and mini-casinos are still in operation. However, some of these could close as well if they don’t settle their bills.