Nepal to Close Two Casinos Due to License & Royalty Payment Issues
Officials in Nepal have decided to close two casinos in the area due to late payments regarding licensing and royalties.
When it comes to casino operations, providers must be licensed and operate in accordance with rules and regulations of the industry in which they function. Depending on the location, the regulations will vary as well as how much should be paid in licensing and fees. If an operator does not abide by the regulations, then they can be subject to fines or even losing licensing. In Nepal, problems with paying royalties and licensing have led to the potential closure of two venues. A group of casinos have seen a debt grow to over $16 million and now they are begin shut down if they do not pay up soon.
Too Much Debt
Casino Royale is one of the venues affected by the major amount of debt. This venue is located in the Yak & Yeti Hotel and it reportedly owes around $3.5 million. The bills of the casino have not been paid in more than two years, and officials are tired of waiting for payment.
Prem Bahadur Ale is the Minister for Culture, Tourism and Civil Aviation in Nepal is looking to see the 2020/2021 payments paid. Officials want to see the renewal fees paid along with royalty fees. The hotel and the casino have been suffering when it comes to revenues earned along with the number of tourists coming to the area.
The Dreamland Hotel has been notified as well about its debit, with as much as $31,500 remaining unpaid for licensing and additional $3.15 million due in royalties. The hotel was given a 5-star classification, but it was lost due to the many issues having taken place over the past two years.
Casinos in Nepal pay $165,800 for a casino license and then just over $82,000 each year thereafter. Annual royalties of over $331,000 must be paid to the government based on the Financial Act. Hotels in the area launched the casinos as a way to bring in new revenues. However, it seems that proper planning was not in place and money management was an issue. Before long, the hotel was liable for the outstanding debt due by casinos, and they couldn’t pay up.
After a few legal battles as to who was at fault and owed the debt, it was decided that hotels could be targeted when the casino did not pay its bills. Now, due to the time that passed, the casinos had racked up a ton of debt that the hotels just cannot pay.
Affected by the COVID-19 Pandemic
Back in 2020, the COVID-19 pandemic began, which resulted in the casinos in Nepal closing early on, just like those in the US. Gambling houses, mini casinos and fully operational casinos were shut down due to the fear of spreading the deadly virus.
The casinos remained shut down for several months until reopening in September 2021. During that time period, the government agreed to cease royalty fees, especially considering that money was not coming in. However, the option was only offered to the operators who were up to date on payments. Less than 10 of the 30+ venues were able to avoid the payments.
Once the lockdown was over, it was just too late for operators to keep offering services. With so many months out of operation and royalty debt racking up, it was just too much for many to keep going. Right now, around 22 casinos and mini venues are in business. However, these operators could be shut down if they do not pay back their debt.