The number of betting firms licensed to operate in Kenya has doubled to 200 in three years, defying a government clampdown on gambling through higher taxes both on companies and punters.
Betting Control and Licensing Board (BCLB) data shows the firms have increased from 118 in the year that ended June 2024 and 100 in 2021.
Kenya has imposed a slew of taxes on the betting industry since 2021, including a 7.5 percent excise tax on every betting stake.
This means the government first takes Sh7.50 for every Sh100 a gambler places as a bet irrespective of winnings. It also takes 20 percent of the winnings and levies additional taxes on betting firms in a bid to make gambling unattractive.
But investors in the betting space are undeterred by the push to curb the business through taxes and regulations, riding the wave of enthusiasm for sports betting.
The new entrants licensed for the year to next June include Bebabeba bets, Softbet, Shwaribet, Vukabet, Bestbets, Ponyoka Bet and Swiftplay.
A majority of the betting firms are backed by foreigners, who have tapped locals as minority investors, BCLB said.
A recent Central Bank of Kenya-backed survey found that young people were increasingly looking at betting as a source of income.
“These findings, combined with earlier findings showing a high perception of gambling as a potential income source among younger people, suggest that younger, urban, and educated individuals are more likely to invest in gambling, possibly due to optimism or a perceived income opportunity,” said the survey released last week.
The survey dubbed the Financial Access Report, 2024 had the input of the Kenya National Bureau of Statistics and the Financial Sector Deepening Kenya (FSD Kenya).
Kenya reintroduced the excise tax on betting stakes in 2021 and recently doubled the duty to 15 percent via the Tax Amendment Bill, which is before the National Assembly for review.
Betting firms are taxed on the gross gaming revenue at a rate of 15 percent in addition to a corporate tax of 30 percent on profits. They also pay annual licensing and compliance fees.
Online betting firms like SportPesa grew rapidly before the tax hikes, minting a new crop of billionaires.
In 2018, the government said the betting industry raked in a combined revenues of Sh208 billion, sparking concerns over the social impact of gambling. This prompted gambling regulations, including restrictions on advertising.
Betting firms like Betin and Betsafe closed shop in Kenya, citing punitive taxation and regulation.
SportPesa closed temporarily before making a return under a new firm, Milestone Games Limited, and shareholders.
The firm together with rival Betika were entangled in vicious court battles with the Kenya Revenue Authority (KRA) over non-payment of taxes, whose computation they disputed.
The Financial Access Report indicates a drop in adults participating in betting, from a share of 13.9 percent in 2021 to 11.2 percent despite the surge in gambling firms.
The report shows that Kenyans on average are spending Sh1,825 a month on betting, in the hope of making quick cash to foot bills. But only a few gamblers win, leaving the betting firms with billions of shillings from bets that gamblers staked and lost.
A parliamentary report showed that gamblers placed bets worth Sh620.97 billion between 2018 and 2022 against winnings of Sh532.72 billion as winning bets.
The betting firms made Sh88.24 billion in gross gaming revenue in the four-year period.
Kenya has the highest number of youthful gamblers at 76 percent, placing the country ahead of bigger economies like Nigeria and South Africa, added the report.
This suggests that the higher taxes and regulations have done little to blunt gambling.
The Financial Access Report shows that 40.4 percent of Kenyans aged between 18 and 45 are actively betting, with the craze cutting across the employed and the jobless.
At least 14.4 percent of Kenyans in urban areas are engaged in betting compared to 8.9 percent of the rural population, says the report.
