Taxes from the betting sector are projected to dip by Sh4.2 billion in the current financial year, underlining a slowdown in a craze that has for years braved a taxation onslaught.
Betting Control and Licensing Board (BCLB) projects that the government will raise Sh20 billion in gaming taxes, excise duty on betting stakes, withholding tax on winning bets, and taxes on the firms, which will be a drop from the Sh24.2 billion raised in the year ended June 2024.
The drop signals that gamblers are slowly cutting down on the craze, months after the government increased excise duty on betting stakes to 15 percent from 12.5 percent.
Punters have over the years increased spending on betting in the hope of striking wins to foot daily bills or economically change their lives, defying the heavy taxes imposed on both betting stakes and winning bets.
“Based on the most current data from the industry’s licensed operators and the comprehensive, multi-sectoral initiatives undertaken by the Board to protect Kenyans and preserve our social fabric,” Jane Makau, chairperson of the BCLB board said in a statement.
“The sector is projected to generate Sh20 billion in 2025. This includes excise duty, withholding tax, and betting and gaming tax. It reflects robust but regulated growth.”
Besides the excise tax, gamblers pay a further 20 percent withholding tax for every winning bet. This means that for every Sh1,000 won, Sh200 goes to the Kenya Revenue Authority (KRA).
Betting Control and Licensing Board projects that the government will raise Sh20 billion in gaming taxes, excise duty on betting stakes.
A high rate of unemployment and increased cost of living have been cited as key drivers of the betting craze over the years.
In the year that ended June 2023, KRA collected Sh19.2 billion in betting taxes as the government continued to win from the betting craze.
The anticipated drop in gambling taxes comes at a time when the number of licensed betting firms has grown to 221, more than double the 100 in 2021.
Currently, betting firms pay a 15 percent tax on gross gaming revenue and a corporate tax of 30 percent on profits. The firms are required to remit the taxes every day by 1 am.
Online gambling firms and the national lottery will be required to deposit Sh200 million to be licensed to operate if President William Ruto signs a new Bill into law.
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They were late last year offered temporary relief after the National Assembly Committee on Sports and Culture rejected the proposed betting tax and gaming tax on betting companies, each at the rate of 15 percent.
The proposals are contained in the Gambling Control Bill, 2023 which is currently before the National Assembly for debate.
“The oversight is set to be strengthened by passing into law the Gambling Control Bill, 2023 which is in the legislative process,” Dr Makau said.
