Nepal’s casino kingdom faces guillotine

KATHMANDU - The fate of eight of Nepals 10 casinos, once a major tourist attraction, lies in jeopardy with the owners failing to pay the money owed to the government by Friday, the deadline set by a parliamentary body.

Facing a dip in business due to political turmoil and labour unrest, the casinos collectively ran up a debt of nearly NRS400 million to the government, causing the Public Accounts Committee of parliament to direct the state to scrap their licences if they failed to clear dues within 35 days.

When the deadline expired Friday, the Department of Revenue Investigation said eight casinos were still behind with payments, most of them earlier owned by a company headed by Indian business man Rakesh Wadhwa.

Wadhwa, managing director of Nepal Recreation Center (NRC) that once ran most of the casinos in Nepal, had to flee the country after the industry became embroiled in a political battle between the ruling communists and the opposition Maoists, and is now reported to be trying to sell his stakes to invest in Goa in India.

Two of the casinos once owned by Wadhwa, including Casino Nepal, the oldest in South Asia, have sought further time to clear their dues and the DRI said it would decide on them next week.

While Casino Nepal owes NRS 130 million, Casino Anna has to pay over NRS 103 million. The ownership of Casino Anna is in dispute after the five-star Hotel de lAnnapurna, from whose premises it operated, issued a public notice last month, saying the casino was behind rent payments and asking it to vacate the premises.

The same thing happened with Casino Shangri-la, whose CEO was Wadhwas wife Shalini Wadhwa. Hotel Shangri-la went to court to dislodge the casino after it defaulted on rent.

Wadhwas monopoly started crumbling soon after ironically he wrested it away from his former mentor, American investor Richard D. Tuttle, after a bitter legal battle in Hong Kong. The first casino to go was Casino Royale, which was taken over by deposed king Gyanendras son-in-law Raj Bahadur Singh.

The two casinos in Kathmandu that cleared their dues - Casino Tara and Everest - also face uncertainty as they too are under NRC.

While eight casinos are in Kathmandu, two are in Pokhara and both - Casino Grande and Fulbari - are behind with payments.

Casino Shangri-la and Royale are in a tricky situation. The new managements say they are not responsible for the arrears left by the NRC and the government will have to take a call on that.

Even if they discharge all their dues, the eight Kathmandu casinos still face a greater threat.

The same parliamentary panel has ordered the government to evict them from the capital, saying they created a law and order problem.

Relocating outside the capital will be the death knell for the casinos. Most of the outer districts have little infrastructure or transport facilities to attract players regularly.

Nepals laws ban Nepalis from gambling and the casinos were originally intended for foreigners, especially Indians.

However, though Indian tourists have been flocking to Nepal, the number of gamblers lessened and the casinos were kept afloat by Nepalis who were allowed in surreptitiously.

But after a political feud, police crackdowns on the casinos increased and Wadhwa came in under mounting negative publicity, causing him to leave Nepal.