Bright Future For Gambling Industry In Kenya


Bright Future For Gambling Industry In Kenya ( Click to Enlarge )

Investing in Kenya’s gambling industry is a win for gaming firms

According to the recent survey conducted by GeoPoll, millennials in Sub-Saharan Africa have invested considerable time in online sports betting. From the study conducted in Nigeria, Uganda, Ghana, Kenya, Tanzania, and South Africa among participants (aged 17-35 years) Kenya had the highest number of online gamblers.

Upgrades Of Kenya’s Gambling Laws

Gaming firms in Kenya have continuous lobbied for a reduction in the 35 per cent tax on revenues. The firms and other members of the Association of Gaming Operators Kenya (Agok) theorise the charges would result in a black market of gamblers.

Apart from the 35% revenue tax, gaming firms in Kenya were also being charged a 30% corporate tax and had to dedicate at least 25% in corporate social responsibilities.

According to Kenya’s reputable news outlet the Daily Nation, sports betting firms termed this kind of taxation impractical. PricewaterhouseCoopers (PwC) also stated that these taxes are among the highest not only in Africa but also globally. Even famous gaming hubs such as Las Vegas are not in the 35% revenue tax bracket.

Most of the notable betting firms in Kenya had to cut down their investment in social causes and sponsorships to manage their expenses and pay the winners. For example, the biggest betting site Sportpesa which sponsors both local and international football clubs had to terminate an estimated Kenya shillings 600 million in local sponsorships. The move resulted in complaints from various sports clubs and unions.

Tax Cuts

The Kenyan treasury finally yielded to pressure from sports betting firms, sports unions and Agok. A bill to reduce the taxation of gaming firms from 35% to 15% was proposed. The bill tabled by Majority Leader of the national assembly Aden Duale seeks to amend the Betting, Lotteries and Gaming Act by reducing tax payable by lottery and betting operators as from January 1st 2019.

The new bill further cuts the shares meant for charity causes from 25-5%. These changes immensely save gaming firms from tax expenditures as they reap the benefits of investing in a nation with a rooted sports-betting culture.

However, the changes affect individual gamblers. The winners have to lose something. The burden previously thrown at operators has been transferred to the individual gamblers. The Treasury proposes that for every win a 20% withholding tax is charged.