Kenya's new gambling tax forces lottery giant to close shop with Sh113,630,968 up for grabs

The effects of Kenya’s new gambling tax is beginning to be felt far and wide.

Barely a few days after Kenya’s betting company, SportPesa announced it was terminating all its sponsorship contracts to Kenyan sports teams, another company has also thrown in the towel.

Pambazuka National Lottery has announced closure of its operations in Kenya following the 35 per cent tax coming into force.

In a public announcement on Sunday, Pambazuka National said.

“Prior to January 2018, operations have been based on 55% pay-out and the imposition of 25% tax devoted to charity as per regulations. The effect of the 35% tax on all ticket sales is that the total cost of operation rises to 115%. This is before the deduction of all operational costs. Operating any lottery under this framework is not possible and therefore business operations are forced to close,” the public announcement read in part. Lottery said it has suspended business operations in Kenya due to the current taxation regime.

The lottery also confirmed that after the live draw of Sunday, January 7, 2018 all its operation will cease until a sustainable regulatory framework is put in place for the lottery industry.

Customers who have any prize claims after the last draw will be paid directly or from the company offices until April 7, 2018.

"All prize claims after yesterday's draw will be paid out to winners directly or from the company offices on April 7th 2018," it added.

As of 7th January when it announced the closure, no body had claimed their major jackpot dubbed, Mzooka jackpot going for a whopping Sh113,630,968 ($1m).