Tax on Bets Cut to 5% in Major Policy Shift
Kenya’s Parliament has approved a sharp drop in excise duty on betting stakes, lowering it from 15% to 5% under the 2025 Finance Bill. The proposed change, pending President William Ruto’s signature, marks a complete reversal of recent tax hikes that had steadily climbed since 2021.
The new framework also redefines when the tax is collected. Instead of taxing bets at the point of wagering, the levy will now be applied when players transfer funds from mobile wallets to betting accounts. Lawmakers say the move is designed to tighten enforcement, especially on virtual and foreign operators who have previously slipped through regulatory cracks.
Finance Committee Chairman MP Kimani Kuria said the updated method ensures tax is captured at the point of transaction, targeting operators outside the country who often escape taxation.
New Duties for Operators
Beyond changes for bettors, operators now face added responsibilities. They must withhold 20% of player winnings as tax and pay a 15% levy on gross gaming revenue—calculated after payouts. These rules tighten oversight but still allow betting companies to benefit from reduced player tax.
The decision follows a turbulent tax history: excise on bets was just 7.5% in mid-2021 before jumping to 12.5% and later 15% by the end of 2024. While the Kenya Revenue Authority (KRA) collected nearly KSh 10 billion in betting taxes between July 2024 and March 2025, withholding tax revenue dropped 15% in the same period.
Surge in Gambling Raises Red Flags
Despite the tax relief for punters, some warn that cheaper betting could drive higher participation and deepen social risks. GeoPoll’s latest survey shows Kenya is one of Africa’s most active gambling markets, with over 82% of respondents having placed bets—just ahead of South Africa.
The sector’s growth is undeniable. Wagers hit KSh 75.18 billion in the nine months to March 2025, up over 17%. But as the market expands, so do concerns. Youth participation remains high, with around 70% of gamblers aged between 18 and 35. Reports of gambling addiction have surged, drawing comparisons to substance abuse.
Tighter Advertising Rules, Weaker Enforcement
To combat the rising tide, the Betting Control and Licensing Board (BCLB) recently enforced stricter advertising rules, banning the use of celebrities and influencers. A 30-day ad blackout was imposed earlier this year to curb aggressive marketing.
Still, critics argue enforcement remains patchy. Illegal platforms continue to operate, and age verification is often overlooked. As the government collects less from excise duty, concerns mount over the ability to fund healthcare, education, and support services for gambling-related harm.
