Nepal Online Gambling Regulation, Licensing & Tax Regime

Nepal maintains a bifurcated gambling regime: general gambling and betting is criminally prohibited under the Penal Code 2074, while a narrow licensed land-based casino track, open to foreigners only, operates under Casino Regulation 2070 on a one-casino-per-licence basis. Online gambling and betting are explicitly and separately banned regardless of offshore hosting. This period's dominant development is the Tourism Bill 2081's clause-by-clause House of Representatives review, which has drawn 263 lawmaker amendments concentrated on casino provisions, touching supervisory structure, foreign-ownership limits and anti-money-laundering obligations. Enforcement against unlicensed online gambling has intensified in parallel, with a coordinated Cyber Bureau action and reported crypto-linked settlement of unlicensed betting flows, indicating a regulatory environment that is tightening on multiple fronts simultaneously even as its underlying casino-licensing architecture remains under active legislative debate.

Casino licensing in Nepal sits with the Department of Tourism under Casino Regulation 2070, which establishes a one-casino-per-licence framework restricted to foreign patrons. This structure has not changed this period, but its institutional future is under active debate: the Tourism Bill 2081 proposes an independent Casino Regulatory Unit, with competing proposals as to whether it should sit under the Department of Tourism or the Ministry of Culture, Tourism and Civil Aviation. The bill is undergoing clause-by-clause review in the House of Representatives, having drawn 263 lawmaker amendments concentrated on casino provisions, alongside proposed beneficial-ownership disclosure at a ten-percent-plus threshold, mandatory KYC and Financial Intelligence Unit monitoring, and a reduced foreign-ownership ceiling. No primary bill text or enactment date has been located; the above rests on corroborated trade-press and law-firm secondary reporting rather than government-published text.

Online gambling market entry is legally untenable: the explicit ISP-level ban and criminal prohibition under the National Gambling (Control) Act 2043 BS foreclose any lawful online operation. Land-based casino entry requires Department of Tourism approval, 5-star hotel infrastructure, a foreign-national-only customer base and NPR 300 million minimum paid-up capital — irrelevant to online operators. FATF grey-list status adds material AML risk to any financial engagement.

Nepal Rastra Bank requires explicit approval for any casino foreign-currency handling and has issued PSP/MFS account-freeze guidelines targeting terrorist-sanction-list and gambling-linked accounts. No lawful online gambling payment channel exists. Nepal's FATF grey-list status requires enhanced due diligence on Nepal-connected gambling flows, and the APG's May 2026 blacklisting warning intensifies this.

All gambling marketing directed at Nepal is prohibited. Online casino and betting advertising is banned, physical casino marketing is restricted to the hotel context for foreign guests, and there is no lawful affiliate, sponsorship or digital marketing channel. Nepali actors have been arrested for promoting offshore betting brands such as 1xBet under the Advertisement Regulation Act.

The Department of Tourism's new twelve-point compliance directive mandates continuous CCTV coverage of casino gaming areas with six months of footage retention, alongside new documentary and payout-verification requirements for licensed operators. This is a regulator circular imposing concrete technical surveillance and record-retention obligations rather than a statutory amendment, and represents a tightening of the technical-compliance baseline that applies immediately to existing licensees, independent of whatever the Tourism Bill 2081 ultimately settles for the sector's institutional structure.

Nepal's distribution-control approach for prohibited online gambling has formalised around network-level blocking: a nationwide ISP-level block on online gambling sites and apps was reportedly ordered, extending the state's enforcement reach beyond individual prosecution to comprehensive access denial at the internet-service-provider layer. This is a materially more comprehensive distribution-control mechanism than previously documented, though the finding rests on a single T4 secondary source and has not been corroborated by a primary regulatory or telecoms-authority notice this cycle, and is accordingly held at uncertain confidence. No app-store delisting, search-engine de-listing, or payment-provider platform restriction specific to gambling was identified in the evidence available this cycle; the blocking mechanism as evidenced is confined to network-level ISP action.

Nepal's enforcement posture this period is marked by the arrest, on 30 October 2026, of an individual from Dhanusha by the Kathmandu Valley Crime Investigation Office for routing an amount equivalent to approximately USD 26.99 million through a Binance account while facilitating online betting across various electronic platforms. The case was filed under the Muluki Criminal Code's gambling-prohibition provision in combination with the National Penal Code (Code) Act 2074 section 262A(1), the virtual-currency-prohibition provision, applied here as an accessory basis to the unlicensed-betting charge. The figure and the charge sections are corroborated across two independent Nepali press outlets, giving the dated facts of the action reasonable reliability even though the eventual judicial outcome is not yet known. The action demonstrates that Nepal's authorities continue to pursue combined crypto-and-betting conduct under the existing prohibition framework rather than under any licence-specific breach theory, consistent with the absence of any licensed online betting channel in the jurisdiction. For parties assessing exposure, the structural lesson is that cross-border crypto-routed payment flows tied to unlicensed betting attract prosecution under both the gambling-prohibition and virtual-currency statutes simultaneously, and that this enforcement pattern has continued without any change to the underlying licensing or prohibition framework.

No online gambling liberalisation is foreseeable. The FATF grey-listing (February 2025) is driving tightening rather than opening, and the proposed Integrated Tourism Bill would further restrict the land-based casino framework — capping foreign ownership at 49%, requiring hotels to own at least 10% of on-premises casinos, making licences location-specific and non-transferable, and pushing the minimum border distance to 5 km. The APG's May 2026 intervention and the decisive September 2026 review mean continued international pressure and blacklisting risk.