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Nepal’s beleaguered casino industry strikes back

Posted by on March 7, 2011 0 Comment

Kathmandu, March 7 (IANS) Facing a closure threat by the government, Nepal’s beleaguered casino industry has struck back finally, asking the country’s apex court for redress.

Two star hotels sought the help of Supreme Court last week, seeking intervention in the long and muddy battle between the communist-led government and the casino industry that threatens to result in the licences of most of the 10 current casinos being revoked.

Hotel Soaltee Crowne Plaza, the oldest five-star hotel of Nepal that boasts of the oldest casino in entire South Asia – Casino Nepal – has challenged the order given to the government by a parliamentary committee, asking for revoking casino licences.

A separate writ petition was also filed Thursday in the Supreme Court by the Fulbari Resort in popular tourist destination Pokhara city seeking to stop the closure of Casino Fulbari operating from its premises.

When the gaming industry arrived in Nepal in the 1960s, the law dictated that only five-star hotels be given licences to run them.

Subsequently, a company that held monopoly, Nepal Recreation Center, leased the premises of the hotels to begin a casino kingdom that today has eight casinos in the capital and two in Pokhara.

Though the hotels hold the licences for the casinos, they are run by NRC, which gets to keep the profits after paying rent to the hotels and tax to the government.

After an internal battle between the two top shots of NRS – American entrepreneur Richard D. Tuttle and Indian investor Rakesh Wadhwa – Wadhwa gained control of NRC but its monopoly was broken with new operators coming up.

The political turmoil in Nepal, labour trouble and rivalry between the ruling communists and Maoists finally led to the government cracking down on the casinos for being behind with rent and taxes.

Casino Nepal, run by Wadhwa’s NRC, owes the highest amount – NRS 130 million – and the parliamentary Public Accounts Committee this year ordered the government to scrap the licences of all defaulting casinos.

With Wadhwa facing an arrest warrant and having fled Nepal, there was no protest from the industry till the two hotels stepped in.

Authorities at Hotel Soaltee told IANS that since the government had issued the licences to the hotels, it had no right to scrap them over NRC’s non-compliance.

The two hotels are saying that as long as the hotels have kept their part of the bargain, they should not be penalised.

The government was also trying to pressure some of the hotels, which have taken over the casinos run from their premises by NRC, to clear the arrears left by the Indian businessman.

The hotels have rejected that, saying it was the finance ministry and tourism ministry’s responsibility to get the money back from the absconding Indian.

The hearing on the two hotels’ petition is expected to start in a fortnight’s time, court sources said.

The casinos employ over 10,000 people and the order to close them down is likely to be opposed by workers.

The labour unions in the casinos are pressuring the government to give Wadhwa more time and withdraw the warrant so that he can return to Nepal and reach a negotiated settlement.

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