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EDITORIAL

KRA will lose heavily if betting moves offshore

In Summary

• Betting has always existed and it is better to keep it taxed inside Kenya.

Betting machines at an illegal betting joint in Kiganjo Estate, Thika.
Betting machines at an illegal betting joint in Kiganjo Estate, Thika.
Image: FILE

Yesterday Interior CS Fred Matiang'i declared that betting licences would not be renewed after July 1 unless sports betting companies demonstrated they were paying their taxes.

Already the betting companies generate a lot of tax revenue for the KRA. SportPesa paid Sh4.6 billion in tax in 2018 and we can assume that the industry as a whole paid at least twice that.

There is an ongoing crackdown on betting companies, believing that betting should be stamped out. But betting has always existed in human history and always will. 

 

If government over-taxes the betting industry, the companies will go out of business. Punters - people who bet - will then just migrate to online betting companies outside Kenya who accept bets and pay out through M-Pesa.

Betting will never stop. It will just move offshore to where the Treasury and KRA cannot collect tax on either revenue or winnings. Yet, with sensible tax rates, the sports betting industry can remain regulated and controlled inside Kenya.

The win-win is to preserve tax revenue for the Treasury by allowing the sports betting companies to remain reasonably profitable.


Quote of the day: "I am not sorry. I will never be sorry. I would do everything I did again if I had to. Everything."

Winnie Mandela
The South African activist died on April 2, 2018