Uhuru Kenyatta approves revised 7.5% gaming turnover tax

In Summary
  • Kenya was one of the very first countries on the African continent to revise its own gambling laws and regulations.
  • The revised gambling turnover tax will also benefit players as they will receive the vast majority of their winnings.
A "Blackjack" table is pictured inside a sports gambling shop in Madrid on February 18, 2020.
A "Blackjack" table is pictured inside a sports gambling shop in Madrid on February 18, 2020.
Image: AFP

The Republic of Kenya is the forty-eighth largest country in the world by area. With almost 55 million residents as estimated in 2021, Kenya is the world’s twenty-ninth most populous country. When compared to other African countries, Kenya is home to one of the fastest-growing, most developed economies in Africa. According to one report, its economic growth between 2015 and 2019 averaged 5.7 percent. The most developed industries in Kenya are tourism, manufacturing, mining, fishing, forestry, and agriculture.

As estimated in late 2020, Kenya has the third most developed industry in the Sub-Saharan region after South Africa and Nigeria. Since 2018, the country’s major economic prospects are very positive. One of the major factors positively impacting its economic growth relates to expansions and digitalization in the transport, telecommunications, and construction industries. In addition to being home to highly-developed tourism, agriculture, manufacturing, and forestry industries, Kenya is also home to one of the most developed gambling industries in Africa.

Kenyan Gambling Industry – How is This Sector Performing?

Kenya was one of the very first countries on the African continent to revise its own gambling laws and regulations. The very first law of this kind the Betting Lotteries and Gaming Act has been in force since 1966. Therefore, Kenya is not home to one of the most developed but also one of the oldest gambling industries in Africa. Since the country’s gambling laws and regulations were established several decades ago, Kenya is also considered one of the most open-minded African nations when it comes to online and land-based gambling activities.

Responsible for licensing gambling operators, overseeing all sorts of gambling activities, and everything else regarding the gambling industry in Kenya is the Betting Control and Licensing Board. The Betting Control and Licensing Board was established by the Betting Lotteries and Gaming Act as the main regulatory agency for the gambling industry. According to the main piece of legislation in the country concerning online and land-based gambling activities, Kenyan residents can legally engage in various gambling activities. More specifically, gambling activities are very popular among Kenyan youth.

At the time of creating the main piece of legislation, the Betting Lotteries and Gaming Act, online casino gaming activities were not a thing so today, the iGaming industry even though highly developed is not as regulated as the land-based gambling industry. At the same time, online casino operators who serve Kenyan players can do so legally provided that their services and products are licensed and regulated by the Betting Control and Licensing Board.

As estimated recently, over 10,000 Kenyan residents are employed in the gambling industry. Today, there are no local Kenyan online casinos operating but there are many international online casinos serving Kenyan players. In fact, all of the top online casinos in Kenya as listed at online-casinos.com are renowned, international online casinos that have been present in the industry for quite some time. These not only serve Kenyans but many other online casino gamblers residing in other jurisdictions where these activities are legal and regulated.

Back to the Kenyan gambling market, back in 2017, almost 30 percent of Kenyan residents over the age of eighteen have engaged in some gambling activities previously. According to a report released by the International Journal of Financial Studies, Kenya has the highest number of young gamblers when compared to other countries of the Sub-Saharan African region. The same report, around 96 percent of these young Kenyan gamblers use their mobile devices to engage in gambling activities.

This does not come as a surprise considering the amazing growth of mobile casinos in the country. Digital services including mobile payment options have significantly improved not only the lives of Kenyan gamblers but everyone else. When it comes to online casino gambling and mobile devices, mobile technologies alongside mobile payments have transformed the Kenyan iGaming industry and made online gambling activities more accessible.

According to a report released in 2020 by GeoPoll, the gambling industry in Kenya was worth around US$40 million and it is expected to grow even more in the following years. Kenya is also home to the third most developed gambling industry in Africa after Nigeria and South Africa. While the gambling market in Kenya is mostly dominated by online sports betting activities, online casino games and online poker are closely following. The land-based gambling industry is also developed with thirty fully licensed land-based casinos operating in the country.

One of the major factors contributing to the growth of online gambling activities in the country is Kenyan relatively high internet penetration rate. As estimated in 2021, there were over 21 million active internet users in Kenya so the country’s internet penetration rate stands at 40% and this is relatively high for an African country. In addition to digitalization, greater adoption of mobile devices has also positively impacted the Kenyan online gambling market. The gambling industry in Kenya will expand and grow in the following years following President Uhuru Kenyatta’s approval of a revised 7.5 percent turnover tax.

President Uhuru Kenyatta Approving a 7.5% Turnover Tax on Gambling

The Kenyan online gambling industry gets new life after President Uhuru Kenyatta approved a revised 7.5 percent turnover tax on gambling. Before, the turnover tax on gambling in Kenya was very high 20 percent so things were quite chaotic for Kenyan gambling operators. Gambling operators in Kenya were stunned after Kenyan legislators instituted a massive 20% turnover tax on gambling back in 2018. Gambling operators demanded from the Kenyan Revenue Authority to explain this decision and justify why the turnover tax on gambling went from 10 percent to 20 percent without any explanation.

President Uhuru Kenyatta was pressured to make changes that will benefit everyone involved. Before revising the budget for the following financial year, Uhuru Kenyatta ordered Ukur Yatani Kanacho from the Kenya Treasury Secretary to conduct a review into the 20% tax rate for gambling operators. Once the investigation was done, the former ambassador recommended that the Kenyan government change the controversial turnover tax on gambling and amend the Finance Bill 2021. His recommendation was to oblige gambling operators in Kenya to pay a lower 7.5 percent turnover tax.

Despite his recommendation, it was unknown whether the President would actually put his signature to revised legislation due to his opposition to land-based and online gambling activities. Needless to say, the Kenya gambling industry suffered massively as that uninviting trend continued. Several key gambling operators also decided to leave the market including SportPesa.

Following President’s decision to approve the revised 7.5 percent turnover tax on gambling, the Kenya gambling industry has been revived. His decision to significantly lower gambling tax rates will make the Kenya gambling market more welcoming towards big operators including SportPesa that will probably re-enter the market.

President’s decision is also warmly accepted by other international gambling operators active in the industry such as Betsson that relatively recently partnered with Bet High Kenya to launch its Betsafe brand. The revised, more welcoming 7.5 percent turnover tax on gambling applies to turnover collected by gambling operators in Kenya starting from the 1st of July. The revised gambling turnover tax will also benefit players as they will receive the vast majority of their winnings.