Gambling is generally prohibited for Nepali citizens, with licensed casinos allowed for foreigners and lotteries regulated; online gambling and betting remain unregulated and largely illegal.
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Regulatory AuthorityMinistry of Culture, Tourism and Civil Aviation
License CostVaries
Regulation by Activity Type
Casinos
Regulated
Online Casinos
Prohibited
Betting
Prohibited
Online Betting
Prohibited
Lotteries
Regulated
Poker
Regulated
Highlights
Gambling is generally illegal in Nepal for locals, with strict prohibitions under the Penal Code and Gambling Act.
Land-based casinos are legal but only accessible to foreign nationals and non-resident Nepalese; locals are banned from entry.
Casino operations require licensing from the Ministry of Culture, Tourism and Civil Aviation under the Casino Regulation 2013.
Casino licenses mandate affiliation with a five-star hotel and a minimum capital investment of NPR 250 million.
Corporate tax on casino profits is 25%, with additional royalties, license fees, and taxes on winnings and leases.
Online gambling is not specifically regulated; Nepalis access offshore sites in a legal gray area with minimal enforcement.
Betting and most other gambling forms are explicitly prohibited, with penalties including fines and imprisonment for violators.
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Legislation
Primary Legislation
The legal framework governing gambling in Nepal is primarily defined by several key statutes and regulations:
National Penal Code Act, 2017: This act explicitly prohibits gambling and betting activities in Nepal. Section 125 of the Penal Code defines and criminalizes both gambling and betting, making it illegal for any person to gamble, cause gambling, bet, or encourage betting. The law also provides for the forfeiture of assets used or gained through gambling activities. Exceptions exist for certain government-approved games and lotteries held for entertainment during public events, provided the stakes are minor and prior approval is obtained from the government.
Gambling Act, 2020: This act further codifies penalties and regulatory provisions concerning gambling and betting, reinforcing prohibitions established in the Penal Code and setting out punishments for violations.
Casino Regulation, 2013 (2070): This regulation specifically governs the operation and establishment of casinos in Nepal. It outlines the requirements for casino operation, including the need for affiliation with a five-star (or in some cases, four-star) hotel, and sets standards for the conduct of casino gaming. The regulation is distinct in that it permits licensed casino operations, primarily for foreign tourists, under strict government oversight.
Public Gambling Act, 1963 (now largely superseded): Historically, this act provided the initial legal basis for prohibiting gambling in Nepal. Its provisions have been largely absorbed and updated by the National Penal Code Act, 2017.
Regulatory Authority
Oversight and enforcement of gambling laws in Nepal are managed by several government bodies, each with specific responsibilities:
Ministry of Culture, Tourism and Civil Aviation: This ministry is the primary regulatory authority for casino operations in Nepal. It is responsible for granting casino licenses, monitoring compliance with the Casino Regulation, 2013, and overseeing all legal casino activities in the country.
Department of Tourism: Operating under the Ministry of Culture, Tourism and Civil Aviation, this department handles the registration and regulatory compliance of casino businesses, including site approvals and pre-licensing inspections.
Nepal Police and Law Enforcement Agencies: These agencies are tasked with enforcing the prohibitions on illegal gambling and betting as set out in the National Penal Code Act, 2017 and the Gambling Act, 2020. They investigate, prosecute, and take action against unauthorized gambling activities.
Other Relevant Authorities: For specific activities such as authorized lotteries, additional regulatory bodies may be involved in oversight and approval, depending on the nature of the gambling or betting activity.
License Types
Types of Gambling Licenses Available in Nepal
Casino License: The primary and most formalized gambling license in Nepal is the casino license, which permits the operation of land-based casinos. These casinos are typically required to be affiliated with five-star hotels (or four-star hotels for machine-only casinos).
Electronic Gaming Club License: Smaller electronic gaming clubs exist, particularly in border towns, but these are generally regulated under the same framework as casinos or as a subset, requiring similar approvals and oversight.
Online Casino License: There is a provision for online casino licenses, but these are not widely issued and remain subject to the same regulatory authority and procedures as land-based casinos. No separate, robust online gambling licensing regime exists at present.
Application Process for Casino License
Pre-Approval: Submit an application to the Ministry of Culture, Tourism, and Civil Aviation, including a financial proposal, technical proposal, and draft Articles and Memorandum of Association.
Affiliation: Secure a lease or partnership agreement with a five-star hotel (or four-star for machine-only casinos).
Committee Review: The Ministry forms a committee to examine documents and conduct an on-site inspection.
Foreign Investment: If foreign direct investment (FDI) is involved, approval from the Department of Industry is required.
Company Registration: Upon receiving prior approval, register the company with the Office of Company Registrar.
Final Approval and License Issuance: After all requirements are met, the Ministry issues the casino license.
Duration and Renewal Conditions
Processing Time: The licensing process typically takes 6 to 12 months from initial application to final license issuance, depending on the completeness of documentation and regulatory review.
Validity: Licenses are generally valid for one financial year.
Renewal: Licensees must apply for renewal at least one month before expiry, submitting updated documentation and proof of compliance with all regulatory requirements.
Eligibility and Key Requirements
Minimum Capital: The applicant company must have a paid-up capital of at least NPR 250 million (approx. USD 2 million) for a standard casino, or NPR 150 million for machine-only casinos.
Hotel Affiliation: The casino must be located within or affiliated with a five-star hotel, or a four-star hotel for electronic gaming only.
Financial Credibility: Applicants must provide proof of financial stability and a credible source of funds.
Background Checks: Key personnel must not have criminal convictions, outstanding government dues, or be blacklisted.
Business Plan: Submission of a detailed business plan and feasibility study is required.
Compliance: Applicants must comply with anti-money laundering regulations, responsible gambling policies, and security/surveillance standards.
Location Restrictions: Casinos cannot be located within five kilometers of an international border or in areas of religious/cultural sensitivity.
Licensing Costs and Financial Requirements
Type
License Fee (Initial)
Royalty (Annual)
Minimum Capital Requirement
Standard Casino
NPR 20,000,000
NPR 50,000,000
NPR 250,000,000
Machine-Only Casino
NPR 10,000,000
NPR 15,000,000
NPR 150,000,000
Other Fees: Additional fees may apply for inspections, document processing, and renewals.
Financial Guarantees: Bank guarantees or proof of sufficient funds may be required as part of the application.
Key Requirements for Maintaining a License
Timely payment of annual royalties and renewal fees.
Adherence to all regulatory, anti-money laundering, and responsible gambling standards.
Maintenance of approved security and surveillance systems.
Submission of regular audit and compliance reports to the Ministry.
Non-compliance, submission of false information, or overdue payments may result in license suspension or revocation.
Gambling Tax
Tax Rates for Gambling Operators in Nepal
Type of Tax
Applicable Rate
Basis of Taxation
Remarks
Corporate Income Tax (Casino Operators)
25%
Net income (after allowable expenses)
Standard corporate tax for casino profits
Royalty Fee (Traditional Casino)
NPR 50,000,000 (Five crore)
Annual fixed fee
Mandatory for all licensed casinos
Royalty Fee (Modern Technology Casino)
NPR 15,000,000 (One crore fifty lakh)
Annual fixed fee
For casinos operated via modern technology
Dividend Tax
5%
Dividends paid to shareholders
Withheld at source
Lease Transaction Tax
10%
Lease amount
For casino facility leases
Employee Withholding Tax
1% to 35%
Employee income
Progressive, according to income brackets
Windfall Gain Tax (on Casino Winnings)
25%
Winnings
Withheld at source for customers
Basis for Taxation
Corporate income tax is calculated on net profits after allowable expenses are deducted.
Royalty fees are fixed annual payments, differing by the type of casino operation (traditional or modern technology-based).
Dividend tax is levied on profit distributions to shareholders.
Lease transaction tax applies to any lease agreements for casino premises.
Employee withholding tax is progressive, based on employee salary brackets.
Windfall gain tax is applied directly to customer winnings at the point of payout.
Tax Reporting and Payment Requirements
Casino operators must file annual corporate income tax returns, declaring net profits and paying the 25% tax accordingly.
Royalty fees must be paid annually as a condition for maintaining a valid casino license.
Dividend tax is withheld at the time of profit distribution and remitted to the tax authorities.
Lease transaction tax is paid on each lease agreement related to casino facilities.
Employee withholding taxes are deducted from salaries and remitted regularly to the tax office.
Windfall gain tax is withheld by the casino at the time of payout to winners and paid to the government.
Operators must maintain proper documentation and submit supporting documents as required by the tax authorities and Ministry of Culture, Tourism and Civil Aviation.
Tax Incentives, Exemptions, and Special Provisions
No general tax incentives or exemptions are specified for gambling operators in Nepal.
Royalty fees are reduced for casinos operated exclusively through modern technology or equipment.
There are no special provisions for online gambling operators, as online gambling is not formally regulated or licensed domestically.
Prohibited Individuals
Age Restrictions and Identification Requirements
Only foreign nationals and non-resident Nepalese are permitted to gamble in licensed casinos in Nepal; Nepali citizens and residents are strictly prohibited from participating in casino gambling.
Casinos are required to verify the nationality of all patrons, typically through the inspection of passports or other official identification documents to ensure compliance with this restriction.
There is no specific minimum age for foreign players explicitly stated in public regulations, but international best practices and hotel policies generally require patrons to be at least 18 or 21 years old, and identification checks are standard procedure at entry.
Prohibited Gambling Activities and Game Restrictions
All forms of gambling and betting are prohibited for Nepali citizens, including casino games, sports betting, and online gambling, unless specifically exempted by law.
Physical casinos may only operate within designated hotels (four- or five-star), and only for foreign nationals; locals are not allowed to enter or participate.
Online gambling is not licensed or regulated in Nepal. There are no legal domestic online gambling platforms, and participation by locals is not permitted. Accessing foreign online casinos operates in a legal gray area but is technically not allowed for Nepali citizens.
Betting on sports, horse racing, and other events is generally prohibited, except for government-approved lotteries and occasional exceptions for entertainment purposes during festivals, with strict limitations on stakes and prior government approval.
Games of chance played during public festivals or fairs may be permitted for entertainment, but only with low stakes and explicit government approval. There are no clear procedures for obtaining such approval, and the law is vague about what constitutes "low stakes."
Advertising and Marketing Limitations
Advertising and promotion of gambling activities are strictly limited. Casinos and gambling operators are not allowed to target or market to Nepali citizens or residents in any form.
Promotion of betting or gambling to the general public, especially Nepali nationals, is prohibited. This includes advertising in media, online channels, and public spaces.
Any form of public advertisement or encouragement of betting, particularly during major events, is discouraged and subject to enforcement actions.
Responsible Gambling Requirements and Player Protection Measures
Casinos are required to implement responsible gambling measures, including the verification of player identity and nationality to prevent access by prohibited persons.
Operators must maintain robust security and surveillance systems to ensure the safety of patrons and prevent illegal activities.
Casino staff are expected to be trained in responsible gambling practices and to monitor for signs of problem gambling among eligible foreign patrons.
Anti-money laundering protocols and financial monitoring are mandatory to protect players and prevent criminal activity within licensed establishments.
There are no formal government programs for responsible gambling or player support targeting local citizens, as gambling is not permitted for them.
Geographic and Location Restrictions
Licensed casinos can only operate within the premises of approved four- or five-star hotels, typically in major cities or designated tourist areas.
Casinos are not permitted within five kilometers of international border areas to prevent cross-border issues and unauthorized access by locals.
Casino locations must not be in areas of religious or cultural sensitivity, and government approval is required for all proposed sites.
Electronic gaming clubs and small-scale casinos are permitted only in specific border towns, primarily targeting foreign visitors. Their operations are subject to the same restrictions on local participation.
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Timeline
Year/Date
Event
1963
Public Gambling Act enacted, establishing the first formal legal framework prohibiting most forms of gambling in Nepal, with limited exceptions for certain festivals and government-approved lotteries.
2013
Casino Regulation introduced, providing a dedicated regulatory structure for casino operations, specifying licensing, operational requirements, and restricting casino access to foreigners and non-resident Nepalis only.
2017
National Penal Code enacted, subsuming and updating the earlier gambling provisions, explicitly prohibiting gambling and betting, and introducing stricter penalties for violations.
2020
Gambling Act further revised, reinforcing prohibitions on gambling and betting, and clarifying penalties and enforcement mechanisms under Nepalese law.
Requirements
Software Certification and Technical Standards Requirements
Gaming equipment and systems used in casinos must be approved by the regulatory authorities and comply with the technical standards prescribed under the Casino Regulation 2070 (2013).
Only certified and approved gaming machines and software are permitted for use. This includes both traditional and electronic gaming devices.
Operators are required to ensure that all gaming systems are regularly tested and certified for fairness, randomness, and integrity by recognized third-party testing laboratories.
Installation of adequate security and surveillance systems is mandatory to monitor gaming activities and prevent tampering or fraud.
Any technology transfer agreements related to gaming systems must be disclosed and approved by the authorities.
Data Protection, Privacy Measures, and Server Location Requirements
Operators must implement robust data protection measures to safeguard customer information and transaction data from unauthorized access, loss, or misuse.
All personal and financial data must be stored securely, with access restricted to authorized personnel only.
Operators are required to comply with privacy standards outlined by Nepali regulations, including secure data transmission and encryption protocols.
There are no explicit statutory requirements regarding the physical location of servers, but operators are expected to ensure that data storage and processing facilities meet regulatory security standards and are accessible for inspection by authorities.
Anti-Money Laundering (AML) and Know Your Customer (KYC) Procedures
Operators must establish and maintain a comprehensive AML compliance program in line with Nepali financial regulations.
Mandatory KYC procedures require verification of customer identity, including collection and validation of identification documents before allowing participation in gambling activities.
Operators must monitor transactions for suspicious activity and report any such activity to the relevant authorities.
Record-keeping of all customer identification and transaction data is required for a specified period to facilitate regulatory audits and investigations.
Staff must be trained on AML and KYC procedures to ensure effective implementation and compliance.
Financial Reporting, Auditing Standards, and Record-Keeping Requirements
Operators are required to maintain accurate and up-to-date financial records in accordance with Nepali accounting standards.
Annual financial audits must be conducted by independent, authorized auditors, and audit reports must be submitted to the regulatory authorities.
Operators must keep detailed records of all gaming transactions, customer accounts, payouts, and financial flows for a period specified by the regulator, typically several years.
Financial reports and supporting documentation must be made available for inspection by regulatory authorities upon request.
Technical Implementation Requirements for Responsible Gambling Tools
Operators must implement responsible gambling measures, including self-exclusion mechanisms and betting limits, as part of their gaming systems.
Gaming software must provide players with access to information about responsible gambling and available support resources.
Systems should allow players to set personal limits on deposits, losses, and playing time.
Operators are expected to monitor player behavior for signs of problem gambling and intervene as necessary, in accordance with approved responsible gambling policies.
Department of Tourism, Ministry of Culture, Tourism and Civil Aviation
Bhrikutimandap, Kathmandu, Nepal
Phone: +977-1-4256909, +977-1-4256229
Email: info@tourismdepartment.gov.np
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Gambling regulations are subject to change. The information provided on this page was accurate at the time of publication, but may not reflect the current regulatory landscape. Always consult official sources for the most up-to-date information before making any gambling-related decisions.
