Kenya’s Betting Firms Struggle Under Rising Taxation and Market Exits

Taxation Pressures Force Betting Firms to Exit

Currently, betting firms in Kenya are taxed at 15 percent on gross gaming revenue, in addition to a 30 percent corporate tax on profits.

This significant tax burden, combined with other financial obligations, has led several operators to leave the market.

Since the beginning of the year, the number of licensed betting firms has dropped by 10, with the total falling from 128 in January to 118.

The Betting Control and Licensing Board (BCLB) has not provided a formal explanation for these exits, but many operators attribute their closure to what they describe as “punitive taxation.”

An example is Betsafe, which shut down its operations in May, citing difficulties in maintaining profitability under the current tax regime.

This is not an isolated case, as other firms have also indicated that the high taxes make it difficult to sustain their business in Kenya.

New Entrants Defy Market Trends

Despite the exodus of several operators, the Kenyan market has seen the entry of 12 new firms, including Top Deck Entertainment, Lucky Majesty Limited, and Poker Kings Limited.

These companies are subject to the same heavy tax obligations, including a 16 percent income tax and additional annual licensing and compliance fees.

The arrival of these new players suggests that there is still optimism about the potential for profit in Kenya’s betting industry, though it remains to be seen how they will fare in the face of stringent regulations and taxation.

Taxation on Gamblers and Public Spending Habits

Beyond the taxes imposed on companies, Kenyan gamblers themselves face heavy levies. There is a 12.5 percent excise tax on each betting stake and a 20 percent withholding tax on winnings.

This high taxation has not dampened the enthusiasm for betting in the country, where the practice remains particularly popular among young people.

According to data from the BCLB, 76 percent of Kenyan gamblers are young adults, making Kenya the leader in youthful gambling rates ahead of Nigeria and South Africa.

The average gambler spends around Sh2,500 per month on bets, with 80 percent earning less than Sh30,000 per month.

For many, betting is seen as a quick way to cover everyday expenses, despite the financial risks involved.

Government Efforts to Regulate the Industry

The Kenyan government has long been concerned about the growing prevalence of betting and its social impact.

Over the years, the Treasury has intensified its efforts to control the betting industry by raising taxes and enforcing strict compliance rules to combat issues such as money laundering.

For instance, the Finance Bill of 2024 proposed increasing the excise duty on betting stakes to 20 percent, but this was rejected, keeping the tax at 12.5 percent.

Additionally, the Gambling Control Bill of 2023 introduced further regulations, including a 15 percent tax on a firm’s gross gaming revenue and a 1 percent monthly levy on the same income.

These proposals signal the government’s ongoing commitment to tightening control over the betting industry, though they also raise concerns about the long-term sustainability of operators within the sector.