Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Government of Nepal has moved to bring casinos under stricter legal and financial oversight, issuing a comprehensive 12-point directive aimed at strengthening compliance with the Asset (Money) Laundering Prevention Act and curbing illicit financial activities within the entertainment and gaming sector.
The directive, issued by the Department of Tourism under the Ministry of Culture, Tourism, and Civil Aviation, mandates all operating casinos to fully adhere to anti–money laundering (AML) and counter–terrorism financing (CFT) regulations. Authorities said the move is part of broader efforts to strengthen Nepal’s financial governance system and support the country’s goal of exiting the FATF Grey List.
Strict Enforcement of Foreign Currency Rules
The Department reminded casino operators that foreign currency transactions are strictly prohibited without approval from Nepal Rastra Bank. Casinos must report all currency-related details and AML compliance updates to the Department as required by the Casino Regulation 2082.
Mandatory Customer Identification and CCTV Storage
Casinos are now required to maintain an updated customer identification system, including complete biometric records, and provide the information to authorities upon request.
Additionally, the directive mandates:
All casino activities must be recorded via CCTV.
CCTV footage must be securely stored for at least six months.
Failure to do so will trigger immediate legal action.
Ban on Third-Party Operations and Unauthorized Locations
The Directive strictly prohibits:
Operating a casino through third-party agreements or outsourcing.
Running casinos outside the location approved in the operating license.
Authorities warned that violations will result in immediate termination of permits.
Mandatory Withholding Tax on Winnings
In a significant compliance tightening, casinos must deduct withholding tax on winnings (आकस्मिक लाभकर) before paying out prize money to players.
Casinos must also:
Provide a withholding tax deduction certificate to the winning player.
Immediately send the tax details to the relevant Internal Revenue Office.
Submit a copy of the report to the Department of Tourism.
Complete Ban on Online and Internet-Based Gambling
The directive imposes a blanket ban on offering any gambling services through online or internet-based platforms, citing increasing risks of unregulated transactions, cross-border financial abuse, and AML loopholes.
Security Obligations for Casino Premises
Casinos and hotel complexes must ensure adequate security arrangements within and around their premises.
The Department emphasized that failure to guarantee security not only compromises public safety but also increases the risk of financial crimes.
Grey List Exit and Risk-Based Monitoring
Aligning with Nepal’s commitment to financial reforms, the government has linked the directive to the country’s ongoing efforts to exit the FATF Grey List. Under Casino Regulation 2082, casinos will undergo risk-based inspections, and any discrepancies found during monitoring will lead to immediate legal action.
This move signals Nepal’s intention to modernize and regulate its entertainment tourism industry while improving its financial reputation internationally. The government says the tightened casino compliance framework is essential to prevent money laundering, safeguard revenue, and ensure responsible, transparent operation across Nepal’s growing casino sector.
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