In a significant move aimed at tightening regulatory control over Nepal’s entertainment and gaming industry, the Government of Nepal has introduced a comprehensive 12-point directive to ensure all casinos operating in the country comply with stricter legal, financial, and security standards. The directive, issued under the Ministry of Culture, Tourism and Civil Aviation, marks a major step toward strengthening institutional governance, tackling illegal financial activities, and improving the overall transparency of casino operations.
The Tourism Department, which functions directly under the ministry, circulated the instructions to all licensed casinos, requiring them to strictly follow the Anti-Money Laundering (AML) Act and adhere to all related regulations without exception.
Strengthening Anti-Money Laundering Compliance
One of the key priorities of the newly issued guidelines is the reinforcement of Nepal’s anti-money laundering framework within the casino sector, an industry often considered high-risk for illegal transactions, financial manipulation, and cross-border currency misuse. The Department has reminded all casino operators that foreign currency transactions must strictly follow Nepal Rastra Bank’s (NRB) foreign exchange regulations. Casinos are expressly prohibited from handling or exchanging foreign currencies without prior authorization from NRB.
Furthermore, the “Casino Regulation 2082” and the Tourism Department’s directive on AML and combating the financing of terrorism require casinos to submit regular compliance reports. These reports must detail financial transactions, risk assessment processes, and internal monitoring systems, ensuring continuous oversight by the Department.
Mandatory Customer Identification and Biometric Records
To increase transparency and prevent identity-related fraud, casinos are now required to maintain a robust Customer Identification System (CIS). This includes recording and updating biometric details of all players, in accordance with standards set by the Department.
Casinos must ensure that all biometric and identification data are made available to authorities immediately upon request. The system is expected to help track high-value players, monitor unusual activity, and prevent the misuse of gaming facilities for illegal financial flows.
Additionally, casinos must install and maintain a comprehensive CCTV surveillance system covering all activity areas inside the premises. All video footage must be securely archived for a minimum of six months, allowing authorities to review recordings when investigating suspicious incidents or financial irregularities.
Ban on Third-Party Operation and Strict Location Restrictions
The government has imposed a complete ban on outsourcing or sub-leasing casino operations to third parties. Under the new directive, only the company that received the operating license may run the casino, ensuring direct accountability and reducing the risks associated with informal, unregulated management practices.
Casinos must also operate strictly within the locations specified in their official licenses. Establishing gambling activities outside of approved premises, including temporary, mobile, or off-site setups, is now strictly prohibited. Any violation will trigger immediate legal action.
Mandatory Withholding Tax on Player Winnings
To align casino operations with Nepal’s taxation laws and ensure that winnings are properly taxed, the government has mandated that casinos must deduct windfall gains tax at the source before issuing payouts to players.
Casino operators must provide players with an official certificate confirming the tax deduction. This documentation must then be forwarded to the respective Internal Revenue Office without delay and simultaneously reported to the Tourism Department. This measure is expected to standardize financial transparency and ensure proper revenue collection for the government.
Complete Ban on Online and Internet-Based Gambling
The directive clearly states that casinos are prohibited from conducting any form of gaming through online platforms, mobile applications, or internet-based systems. The government expressed concerns that such platforms may facilitate gambling among minors, enable unregulated transactions, and complicate financial tracking. Only physical, on-site casino operations are permitted under Nepalese law, and any attempt to introduce online gambling will result in strict penalties.
Enhanced Security Requirements Inside and Around Casino Premises
Casino operators must ensure adequate security both inside and outside their facilities. This includes deploying trained security personnel, implementing safety protocols, and upgrading surveillance systems. The government stressed that casinos must also ensure the safety of tourists, guests, and staff members, as the industry plays a significant role in Nepal’s tourism economy.
Supporting Nepal’s Effort to Exit the FATF Grey List
The strengthened directives come at a crucial time as Nepal aims to implement the reforms necessary to be removed from the Financial Action Task Force (FATF) Grey List. The Tourism Department emphasized that proper implementation of these casino regulations will contribute significantly to Nepal’s compliance with international financial standards. If any casino is found to be non-compliant during risk-based inspections under the Casino Regulation 2082, the Department will take immediate legal action, ranging from fines to suspension or revocation of operating licenses.
The new 12-point directive represents a decisive move by the government to modernize, regulate, and safeguard Nepal’s casino industry. By tightening financial oversight, enforcing robust customer identification protocols, and prohibiting unauthorized or online operations, the government aims to promote responsible entertainment, protect national financial integrity, and support broader tourism development goals.
With clearer rules and stricter enforcement mechanisms in place, Nepal seeks to foster a more transparent, accountable, and internationally compliant casino sector, one that can contribute positively to tourism revenues while ensuring that illegal activities find no safe haven within the industry.
