MPs hand gamblers big tax cut

The reduction of the excise tax, which also affects prize competition and lotteries, is expected to increase the potential for winnings by punters by increasing the amount wagered.

Lotteries by charitable organisations and horse racing are, however, exempt from the excise duty charge.

Currently, a wager of Sh1,000 at-tracts an excise duty charge of Sh150 and winnings of Sh1,360 assuming odds at two times the wager and after accounting for a 20 percent withholding tax on winnings or Sh340.

In the proposed regime, a Sh1,000 deposit in a betting wallet will attract Sh50 excise duty and winnings of Sh1,520 assuming the same odds and accounting for a Sh380 withholding tax charge.

National Assembly Finance and National Planning Committee Chairperson Kuria Kimani did not provide objectives and reasons for slashing the rate of excise tax on betting when reached by the Business Daily by phone.

MPs have also approved an amendment that will see the excise duty on betting collected at the point where punters move funds from their mobile money wallets to their betting accounts.

Mr Kimani said the move plans to close a loophole that has allowed Kenyans to bet on foreign-based betting platforms without paying excise taxes.

"When you are placing a bet, the current taxation regime is that when you have money in your mobile money account and then you transfer that money to the wallet of a betting company, the time of charging excise duty is when you place a bet," he said.

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"We are changing to make it for excise duty to be 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 this 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."

The Kenya Revenue Authority (KRA) is expected to take a revenue hit from the change although it will also gain from roping in offshore sites to the excise tax base.

Excise duty collected by the taxman rose by 24 percent between last July and March 2025 to Sh9.97 billion from Sh8 billion with the growth being partly attributable to increased wagers by punters.

Withholding tax on winnings fell by 15 percent between July 2024 and March this year to Sh4.81 billion from Sh5.65 billion pointing to lower winnings by punters.

The drop also signalled the possibility of shrinking odds offered by bookmakers amid punitive taxation measures.

Previous calculations by the Business Daily using monthly duty remitted to the KRA indicate the amount staked in the betting and gambling industry rose by 17.04 percent to Sh75.18 billion from Sh64.23 billion in the review period from a year prior. KRA has integrated its system with those of local betting companies to have a real-time view of the industry to seal revenue leakages.

Betting firms are required to compute all excise taxes after midnight every day and remit the same to KRA the following day by seven o'clock in the morning.

By July 2023, the taxman had integrated 36 betting companies while another 87 were lined up for the linkage, which contributed to revenue growth in the betting and gaming sector.

Excise duty on betting was first charged at 7.5 percent in July 2021 before being lifted, first to 12.5 percent in July 2023 and later to 15 percent last December.

The earlier increase in excise tax on wagers was premised on the need to cut the appeal of the betting craze in the country which has turned to addiction for millions of Kenyans who see it as a source of their livelihood.

Kenya is currently home to the highest number of young gamblers at 76 percent of the youthful population, ranking ahead of larger economies like South Africa and Nigeria.

A joint report by the Central Bank of Kenya, Kenya National Bureau of Statistics, and others shows that 40.4 percent of Kenyans aged between 18 and 45 are actively betting, underscoring the gambling craze that the State has been trying to rein in.

"Younger, urban, and educated individuals are more likely to invest in gambling, possibly due to optimism or a perceived income opportunity," said the 2024 Financial Access Report.

Some gamblers have funded their addiction through digital loans while a rising number of jobless youths have turned to the craze in the hope of financial returns. A high rate of unemployment and increased costs of living have been cited as key drivers for the betting craze.
Betting firms withhold the various taxes and remit the same to KRA daily before midnight.

KRA data shows that Kenyans placed an average of Sh247.37 million bets daily between July 2024 and March 2025, while total winnings in the period were Sh87.83 million.

The huge losses suffered from betting have resulted in some punters taking their own lives raising concerns among regulatory bodies and Parliament.

The Betting Control and Licensing Board (BCLB) has, for instance, suspended advertisements on betting, gaming, and lottery activities on all media platforms for 30 days April 29 to give room for the streamlining of rules guiding the industry.

BCLB board Chair Jane Mwikali warned that some betting firms may have represented gambling as a legitimate investment opportunity and a shortcut to wealth creation.

"The erroneous depiction occasions adverse socioeconomic consequences, with devastating effects on individuals, families, and the broader community. Of particular concern is the rampant airing of gambling advertisements during the watershed period (5am to 10pm)," she said in a statement.

Despite pressure on the industry including a crackdown by the government and taxes, the number of betting firms licensed to operate in Kenya has doubled to 200 in three years to June 2024 from 118 in 2021, according to BCLB.

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