A dramatic decision in Kenya’s National Parliament to overhaul the country’s gambling tax framework may lead to a significant economic boost.
Under the Finance Act 2025, a 5% tax will be levied on players when they withdraw money from their betting account. Previously, bettors were subject to a 20% withholding tax on winnings that excluded the initial stake.
Kenya’s Parliamentary Budget Office estimates that the change is expected to increase revenue collection from Ksh 5.4bn (£32.9m) to Ksh 11.4bn (£69.54 m).
Alongside, a 5% tax on withdrawals, the same rate is also applied to any deposits made from a players mobile wallet to their betting account following a change in excise duty. Previously, a 15% excise duty was applied at the point of wagering, however, this was changed in June in a bid to improve tax enforcement.
At the time of the announcement, MP Kimani Kuria, Chairman of the Finance Committee, stated: “We are changing to make excise duty payable when you transfer money from your mobile wallet to the betting company wallet.
“There are so many entities operating virtually, some outside the country, from which we are not able to get the excise duty from them. This now means that every time a Kenyan transfers money from their mobile wallet to the wallet of the betting company, then that’s the time the excise duty is paid.”
Black market fears
Nonetheless, it is not entirely a positive outlook painted by the report, with warnings that the shift in tax structure has the potential to drive smaller depositing players away from the regulated market.
The report highlighted that a player could pay a gambling tax without placing any bets. Under the current tax structure, a player would lose 10% of any money that was deposited and then withdrawn without any betting activity taking place.
“This lack of clarity and perceived unfairness could not only push players away from regulated platforms but also hurt industry growth and undermine the very revenue goals the government hopes to achieve,” stated the country’s 2025 Budget Watch.
A new era
News of a potential tax windfall comes as Kenya begins its transition to a new regulator under the recently approved Gambling Control Act, 2025.
Expected to be completed by February 2026, the Betting Control and Licensing Board (BCLB) will hand over the reins to the Gambling Regulatory Authority of Kenya (GRA).
Due to the lengthy nature of the transition period, the BCLB has confirmed that annual licence applications, including renewals, have been suspended. All current licence holders will operate under existing terms and conditions until their licences expire.
The GRA is currently drafting a new set of regulations under the Gambling Control Act as part of the transition process, which will detail the framework for licensing, compliance and operational standards.
The Gambling Control Act, 2025 replaces the Betting, Lotteries and Gaming Act, and seeks to modernise Kenya’s gambling sector through more stringent compliance requirements, greater consumer protection and unified regulatory oversight.
Criteria for licensing include a requirement that 30% of any applicant’s shares are held by Kenyan citizens, and applicants must also maintain a bank account in a Kenyan licensed financial institution into which all gambling proceeds are paid.
Specific requirements have also been laid out for online gaming operators.
Key obligations include identity verification during player registration, integration with the GRA’s real-time monitoring system to enable oversight of online transactions and compliance with Kenya’s Data Protection Act, anti-money laundering laws and cybersecurity requirements.
Foreign operators will be prohibited unless they are registered locally and meet Kenya’s regulatory requirements.
iGaming Expert Analysis: Whilst we await for confirmation, if budget predictions are to be proven correct, Kenya could act as an interesting case study for global markets flirting with the idea of increased taxation. Sometimes, to secure an economic boost the only way isn’t up for tax rates.
