Nepal’s government has introduced a new 12-point directive aimed at stricter regulation of casinos. The directive, issued by the Department of Tourism under the Ministry of Culture, Tourism and Civil Aviation, mandates that all casinos operating in the country fully comply with the Anti-Money Laundering (AML) Act, including detailed provisions related to counter-terrorist financing.
Under the new rules, casino operators must submit AML and CFT (Counter Financing of Terrorism) documentation regularly to the Tourism Department. In a major shift, the directive prohibits casinos from handling foreign currency transactions without explicit permission from Nepal Rastra Bank, reinforcing previous warnings about unauthorised currency trades. These directives come at a moment when online gambling has surged in the country.
Casinos are also required to operate strictly under the Casino Regulations, 2082, the regulation framework formally published earlier this year, which sets out tougher compliance, surveillance, and security standards. Among these are stringent Know Your Customer (KYC) requirements and biometric customer identification systems. Operators must maintain and regularly update bettors’ identity details, including biometric data, and make this available to the Tourism Department on demand.
To prevent illicit activity within casino premises, the directive also mandates continuous CCTV coverage of all gaming areas. The recorded footage must be securely stored for a minimum of six months to support investigations or audits.
The government has closed loopholes that allowed casinos to be managed indirectly: the directive prohibits running casinos via third-party agreements or in locations not authorised under their licences. Before paying out winnings to players, casinos must now deduct a compulsory “profit tax” in accordance with Nepalese law. After withholding, operators are required to issue a deduction certificate to the winner and forward that documented proof both to the Inland Revenue Office and the Tourism Department.
Importantly, the 12-point directive imposes a complete ban on any online or internet-based casino gaming, citing concerns over risk, unregulated cross-border transactions, and potential money laundering. Security around casino premises is being stepped up significantly: operators must guarantee robust protection both inside gaming floors and around associated hotels.
Regulators have linked the move directly to Nepal’s efforts to exit the Financial Action Task Force (FATF) Grey List. The directive aligns with “risk-based” inspections, and any gaps or non-compliance identified during this monitoring phase may trigger immediate legal action.
Financial authorities are also implementing complementary reforms. Nepal Rastra Bank (NRB) recently issued guidelines requiring Payment Service Providers (PSPs) to freeze accounts of individuals or entities on UN or domestic terrorist sanction lists. This freezing obligation even extends to assets connected to designated persons, in line with FATF recommendations.
Nepal’s central bank has also indicated a broader push to strengthen its AML/CFT system, promising to bolster monitoring, investigation and prosecution, especially as the country seeks to rid itself of grey-list status. According to the IMF, Nepal is upgrading its AML/CFT legal and regulatory frameworks, with a special focus on non-financial sectors such as real estate, precious metals, and casinos.
Analysts say that by tightening casino rules and expanding enforcement powers, Nepal is trying to build confidence in its financial system, curb illicit flows in the gaming sector and meet international benchmarks. Though the country is off the FATF’s grey list, the move could help address reputational risks while shaping the country’s gambling industry into a more transparent and compliant sector.
#Nepal #CasinoRegulation #AML #CFT #FATF
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