Categories
Gaming

Silver Heritage announces launch of Tiger Palace resort cum casino on Indo-Nepal border by November 2017

Hong Kong-based Silver Heritage Group has announced that its Tiger Palace Resort in Bhairahawa in Nepal is nearing completion and operations will commence by the end of this year in two phases.

According to Silver Heritage Group, the hotel, villa and hospitality areas of the resort will commence operations in in the first phase- by the end of September, 2017. This will be followed by the launch of the casino, the main gaming and VIP floors and the remaining parts of the resort in phase two- by November, 2017.

While Australia-listed Silver Heritage Group faced delays and fund crunch, the company seems to have overcome its financial difficulties by raising Australian $19 million in an entitlement offer in June 2017.

The Tiger Palace resort is touted as the first luxury casino resort of South Asia with over 100 5-star rooms, 2 VIP villas and over 20,000 square feet of casino space. The resort is located in the Bhairahawa area of Nepal, which is just 12 kilometres from the India-Nepal border and easily accessible from various cities in Uttar Pradesh like Gorakhpur, Lucknow, Kanpur and Allahabad.

The company aims to target visitors from North and East India by providing them with a unique gaming and hospitality experience, which is unlike what is currently offered in the region.

The final budgeted project cost for Tiger Palace is US $51.8 million (around Rs. 341 crores), which is a US$ 11.8 million escalation from the initially earmarked US$40 million.

Categories
Gaming Legal & Regulatory

Goa CM announces shifting of offshore casinos to land in 3 years, cap on number of casinos

Goa Chief Minister Manohar Parrikar announced in the legislative assembly that offshore casinos would be shifted to a special entertainment zone on land within the the next three years and necessary amendments would be introduced to the Goa Public Gambling Act.

Parrikar also said that the number of offshore casinos would be capped at five and no further licenses for new casinos would be given. He added that a notification to that effect would be issued very soon.

He also noted that the 2012 amendment to the Goa Public Gambling banning locals from entering casinos would be implemented with certain changes.

The Chief Minister also added that a Gaming Commissioner would soon be appointed by the state government, who would be the nodal officer to oversee all casino-related activities.

Consultancy firm, KPMG has been designated to identify the entertainment zone where offshore casinos would shift, he added.

Earlier, Parrikar’s cabinet colleague Vijay Sardesai had also mooted the idea of shifting offshore casinos to land and opposed the introduction of a sixth casino in the River Mandovi.

Categories
Gaming

Goa Minister proposes shifting offshore casinos to land

Vijai Sardesai, senior leader in the BJP-led ruling coalition in Goa has said that offshore casinos anchored in the River Mandovi should be shifted to a suitable location on land.  Sardesai is the Minister of Town and Country Planning and President of the Goa Forward Party.

Sardesai also opposed the entry of Gopal Kanda promoted GoldenGlobe Hotels Pvt. Ltd. casino in the River Mandovi, even though the Goa bench of the Bombay High Court last week directed that Kanda’s casino vessel MV Lucky be granted mooring permission to enter River Mandovi.

Explaining his party’s position on the casino issue, Sardesai in a press conference yesterday said, “We have never been anti-casino per se, but we want to move them out of the Mandovi river. We will oppose the entry of the sixth casino and I am personally against it. We want to remove all casinos from the river and I am personally pushing to move them from there to land.”

Sardesai added that the Goa, Daman and Diu Public Gambling Act needs to be amended to shift offshore casinos to land and he is personally pushing for the necessary changes in the law to be carried out soon.

“We need to amend the Acts as these casinos are polluting the whole river. The whole riverfront can instead be converted on the lines of the Hong Kong harbour where there are daily laser shows. Casinos should not be shutdown because then we are closing many other things,” he is said to have commented.

Categories
Business Gaming

GST council announces 28% tax on casinos and betting; 18% tax likely on skill games; lottery tax yet to be announced

The GST Council, a constitutional body has announced tax slabs for most goods and services in the council meeting held in Srinagar on 18th and 19th May. As widely predicted, gambling and totalisator services provided by a race course as well as betting with licensed bookmakers in race courses have been placed in the 28% tax slab.

Further, entry fees charged in casinos or other entertainment events will also be charged 28% GST. It is understood that at present, there is no proposal to impose an additional cess on gambling and betting activities.

Union Finance Minister Arun Jaitley in his press conference yesterday indicated that since entertainment and luxury taxes have been merged with service tax in GST, it would only be fair that cinema halls, casinos and betting centres are placed in the highest tax slab of 28%. Currently, casinos in Goa pay a 15% gaming tax on their revenues while casinos in Sikkim pay a 10% gaming tax, in addition to a Rs. 1,000/- tax on the entry of every visitor.

While the 28% tax may prime facie seem higher than the current taxes paid by casinos, industry experts believe that with the availability of input credit on the goods and services (which at present is not available on the entertainment taxes paid by casinos) and with the abolition of the Rs. 1,000/- entry tax,  the gambling business may not be affected by the announcement of the GST council.

Experts further believe that the announcement of a unified taxation system for the gaming industry will only be beneficial in the long term.

Online skill games, which do not fall within the ambit of gambling could fall within the category of  ‘all other services not specified elsewhere’ and be subject to a 18% GST rate. Again, while this is slightly higher than the 15% service tax currently paid by online rummy, poker and fantasy sports operators, with the seamless availability of input credit and easier compliance mechanism, the sector may not be significantly impacted in the long term.

It is understood that the taxation rate on lottery tickets or service provided by lottery distributors has not been announced by the GST council. A decision on the taxation rate for lotteries is expected in the coming weeks. However, since lotteries fall within the definition of actionable claims, which have been categorised as goods under the GST law, it is believed that lotteries would fall within the 28% tax bracket.

Categories
Business

Goa government marginally hikes casino license fees in budget 2017

The Goa government has marginally hiked the recurrring annual casino license fees as well as the fees for transferring casino licenses for the third time in as many years. Last year, then Chief Minister Laxmikant Parsekar had also hiked license fees and entry fees to be paid by casinos in the budget.

Chief Minister Manohar Parrikar (who also holds the Finance portfolio) while presenting the state budget on 24th March proposed these changes.

As per the revised fees proposed in the budget, the annual license fee for upto 100 square metre area of an onshore casino is hiked by Rs. 50 lakhs to Rs. 4 crore. Similarly, the annual fees of all other categories of onshore casinos (who have to pay fees based on their area) has been hiked by Rs. 50 lakhs.

For offshore casinos, there has been a hike of around Rs. 1.50 crores depending on the capacity of vessels.  For instance, a vessel with up to 200 passenger capacity is mandated to pay Rs 10 crore fees to the government (as opposed to Rs. 8.50 crores last year), while those having a capacity between 200 and 400 persons will be charged Rs 11 crore (as against Rs. 9.50 crores last year) and vessels whose passenger capacity exceeding 400 will have to pay Rs 12 crore (as against Rs. 11 crores last year).

Siginifcantly, the fees for transferring casino license has been raised to Rs. 20 crores for offshore casinos and Rs. 10 crores for onshore casinos.

The full table of changes in casino fees proposed in the budget is given below:

Categories
Gaming Legal & Regulatory

Casinos in Goa safe as BJP-led coalition forms government

The Bharatiya Janata Party (BJP) sprung a surprise by staking claim to the Goa government despite falling four seats short of its rival Congress in the elections to the legislative assembly. Congress won 17 seats while BJP won 13. The remaining 10 seats were won by independents and regional parties.

However, the BJP has managed to garner support of regional outfits like Maharashtrawadi Gomantak Party, Goa Forward Party and independents, taking its total support to the majority mark of 21.  BJP has announced that the current Union Defence Minister Manohar Parrikar would be returning to the state as the new Chief Minister.

BJP is the only major party in Goa that did not take an overtly anti-casino stand during election campaigning. Parrikar in his earlier stint as the state’s Chief Minister had on various occasions noted that while he does not support casinos, he would not close down the casinos that are currently operational.  Parrikar’s successor and party colleague Laxmikant Parsekar had also said that BJP would not disturb the casino industry in order to retain investor confidence in the state.

BJP’s alliance partner Maharashtrawadi Gomantak Party had also noted that while it does not encourage casinos it would not like to disrupt the existing casinos that are operational.

The Congress party in its election manifesto had however stated that it would like to shut down casinos, although ironically, it was the Congress party that first issued casino licenses. Another party in fray, the Aam Aadmi Party (AAP) had also made removal of casinos as one of its major election issues. Interestingly though the AAP drew a blank and could not win a single seat.

As per news reports the issue of renewal of offshore casino licenses is likely to be one of the first policy decisions of the new cabinet. The new dispensation under the leadership of Parrikar is however not likely to take a decision that may adversely affect the casino industry in a major way.

Categories
Legal & Regulatory

Sixth offshore casino in Goa likely as HC directs government to issue license to Golden Globe within 24 hours

The Goa bench of the Bombay High Court directed the government to consider renewal of the offshore casino license of Gopal Kanda promoted GoldenGlobe Hotels Pvt. Ltd. (GGHPL) within 24 hours.

A division bench of the High Court comprising of Justices CV Bhadang and Anoop Mohta by an order dated 8th March, 2017 directed the government to consider renewal of the Golden Globe license within 24 hours.

Last year, GGHPL attempted to revive its offshore casino license by paying its pending dues and license fees of over Rs. 46 crores. The company later approached the High Court seeking renewal of its license since it had completed all necessary formalities and paid all pending dues and levies.

By an order dated 9th January, 2017 the High Court had directed the government to grant renewal of the license to the company within four weeks. However, due to the state assembly elections scheduled on 4th February and the Model Code of Conduct imposed by the Election Commission, the state government claimed that it could not take any new policy decision until the election results on 11th March and formation of a new government thereafter.

Consequently, the state government kept the decision on hold and did not act as per the orders of the High Court. GGHPL thereafter filed a fresh writ petition before the High Court which prompted the court to note on 8th March that the Model Code of Conduct did not come into way of the state government taking a decision on renewal of the license and directed the government to grant a license to the company within 24 hours.

The court also relied on the assertion by the Advocate General of Goa that the government had no objection to grant the license except to GGHPL except for the fact that the Model Code of Conduct is currently in force.

As reported by us earlier, it is possible that the Gopal Kanda-led MDLR group will either partner with or sell stake in its company to Essel Group. Essel Group has been unsuccessfully trying to setup an offshore casino in Goa for the past decade under the brand name of ‘Casino Maharaja’ and has all logistics and vessel ready for operating a casino.

Categories
Business Legal & Regulatory

No change in TDS threshold for gaming in Budget 2017

The Union Budget presented by Finance Minister Arun Jaitley yesterday was expected to simplify the direct taxation system and reduce income tax in a big way.  However, Budget 2017 did not have any specific announcements as far as the gaming industry is concerned.

In fact the budget left many in the gaming industry disappointed as the Finance Minister did not hike threshold for TDS deduction on gaming, card games, casino or lottery  winnings from the current Rs. 10,000 despite the Easwar committee recommending in January 2016 that the limit should be raised to at least Rs. 15,000 . The government also did not change the prevailing 30% tax on winnings from lottery, gambling or other games.

However, there were a couple of general positives from the budget. First, the reduction in individual tax rates for the lower income bracket will leave greater disposable income in the hands of the salaried class and professionals, thereby possibly leading to increased spending on gaming and other recreational activities. Secondly, reduction in corporate tax to 25% from the existing 30%, for companies with less than Rs. 50 crore annual turnover will be beneficial for online poker, rummy, fantasy sports and other gaming startups. The online skill games industry will also be relieved that the service tax rate was not hiked as was widely expected.

Categories
Gaming

Delta Corp announces opening of its Sikkim casino on 14th January, two state ministers to be present for launch

Delta Corp has announced the launch of its Casino Deltin Denzong in Hotel Denzong Regency in Gangtok on 14th January, 2017.  The news was first announced by Darshan Mehta, Head of Resarch of ET Now news channel on his Twitter handle. As per a copy of the invitation shared by Mehta, Ugen Gyatso, Tourism & Civil Aviation Minister of Sikkim will be the Chief Guest at the opening ceremony, while GM Gurung, the state’s Public Works, Culture & Heritage Minister is slated to be the Guest of Honour.

In July 2016, Delta Corp had notified the stock exchanges that it had secured a provisional license to operate a casino in Gangtok’s Denzong Regency Hotel. The company had also informed the stock exchanges that it had entered into a leave and license agreement with the Hotel to operate the casino. The company is expected to offer 150 gaming positions in the new casino and expects to cater to the Eastern region market.  Glaws was the website to break the news about Delta Corp starting a casino in Sikkim in April 2016.

Delta Corp has aggressively expanded its presence both in the online and offline gaming space in the country in the last one year.  With this latest announcement, the company is expected to retain its position as a dominant player in the gaming and entertainment space.

Categories
Gaming Legal & Regulatory

Japan passes Bill legalising casinos, aims to be the next Macau

A contentious bill to legalise casinos was finally passed by both Houses of the Diet (Japanese Parliament), with the Upper House of the Parliament clearing it on 14th December.

Gambling is generally considered to be a criminal offence in Japan but historically speaking, the betting culture has always been widespread through pachinko (a mechanical game) halls that are essentially recreational arcades, used much more frequently to stake money.

The laws penalising gambling in Japan exclude betting on horse racing, certain motor cars and lottery. Thus viewing Japan as a massive gaming market is not a novel idea but this image is reinforced by the wealthy population, proximity to China and the avenues for legal gambling.

That being said, casino gambling does not receive wide public support so when a Bill was submitted by a cross-party group of lawmakers in the Lower House of the Diet that established the government’s responsibility to develop -what is called-Integrated Resorts,  it received a lukewarm response.

These Integrated Resorts (IRs) included casinos, to help boost tourism and revitalise regional and local economies. The proposal has been pending since the past two years and a Bill was first submitted to the parliament in April 2015, but other legislations were given priority and discussions were postponed. It was only in October, 2016 that focus was brought back to the potential benefits that could be derived from such a bill.

A former senator and parliamentary secretary for economic and fiscal policy, Mr. Tamura, told the CNBC that Japan was likely to become the next Singapore.

He further added that- “the government’s increased political capital and its goal of boosting inbound tourism are two key factors that distinguish this push from previous years.”

There is no doubt that legalising casino gambling could bring in certain economic advantages for example, it would result in a boost in construction, more jobs, a surge in the number of overseas tourists visiting Japan and increased tax revenue for both regional and the central governments especially since the 2020 Olympics is being hosted by Tokyo.

This, however, does not fully reflect the public opinion which is polarised. A poll by the Yomiuri newspaper released Sunday finding that 57 percent of respondents opposed it, while 34 percent supported the legalisation. The bill has called for strong deliberations among all sections of society and the Democratic Party (the opposition) walked out in protest during voting.

Saori Ikeuchi, of the Japanese Communist Party, decried the hasty discussions and called the bill “a paragon of social evils.”

The political arguments finally ended on December 14th as both the Houses of the Diet passed the bill.This stipulated the government’s ethical obligations, and required the government to envisage policies such as the management of entry for Japanese people. Thus there remains a need for a further bill,setting rules for operating resorts before any building can commence.

“The legalisation process in Japan is a two-step process”, explained Jay Defibaugh, Senior Research Analyst at CLSA Japan.

He went on to extrapolate, “The first-stage law, called the Integrated Resorts Promotion Law, should be passed in an extraordinary Diet session due to take place from late September or early October to early December. Within the Promotion Law is a commitment to pass an Execution or Implementation Law within 12 months. The second-stage law will include various key details including issues on taxation, floor space restrictions, and whether local Japanese will be required to pay entrance fees. We believe that the first-stage law is likely to be passed in the extraordinary session.”

The way the legislation was hurriedly rammed through the Lower House left even some lawmakers in Abe’s ruling coalition displeased. In the statistics released by Japan Times, 22 of the 33 Komeito members present voted in favor and 11 voted against — including the party’s secretary-general and Diet affairs chief. Among LDP lawmakers, former Defense Minister Gen Nakatani left the chamber when the vote was taken — later explaining to the Japan Times that the legislation does not provide for enough measures to address gambling addiction.

In spite of all the hindrances on the horizon, several regional governments are expressing an interest in hosting an IR with the hopes that it would bring increased revenues specially since a large number of tourists will be visiting Japan for the 2020 Tokyo Olympics.

Multi-billion dollar International gaming companies including Wynn Resorts Ltd, MGM Resorts International and Caesars Entertainment Corp have been deliberating an investment in Japan although they might have to battle to win operating rights. MGM could plough as much as $10 billion into a Japanese casino, its chief executive revealed to Reuters in October.

“Japan’s casinos could follow Singapore’s model in some areas, charging an entry fee to local residents”, said Govertsen to ABC news. “Some Asian nations with legalised gambling such as Vietnam and Malaysia have tighter bans on their own citizens visiting casinos. Other places like the Philippines and Macau have no restriction”, he elaborated.

The final set of tax and other regulations are still to be decided by the Japanese Parliament, but the passage of the Integrated Casino Resort Bill is certainly a positive step for the Asian gaming industry.