Legislation Of Kenyan Government And Their Impact To Gambling Industry

As a country with a population of approximately 47 million people, Kenya is the largest economy in East Africa and one of the biggest online gambling markets on the continent. It is currently estimated to be worth $40 million (2020) and is growing at a rapid pace.

Changes to the sports betting turnover tax and what it means for the industry (courtesy)

After South Africa and Nigeria, Kenya is the third when it comes to the sheer size of iGaming market in Sub-Saharan Africa. On the other hand, this country is in the first place by the number of young players in the region. Meaning that young Kenyans already spend more money on gambling on average compared to youth in other African countries.

Sports betting is the most preferred activity of Kenyan gamblers...

… with football being the most popular sport to bet on. Right behind sports betting are online poker and other online casino games, but demand for these iGaming products can’t compete with sportsbooks.

The first online sportsbook to enter the market was SportPesa, which received its license in 2013, while now there are about 30 sportsbooks licensed to operate in the country. SportPesa is the favorite betting platform, with 82% of Kenyan gamblers reporting they had an account with the sportsbook, according to statistics.

The other most popular betting sites in Kenya include:

· Betin

· Elitebet

· Betika

· Mcheza

· Betpawa

Traditionally, the market was focused on land-based betting shops and casinos, but in recent years there has been a massive shift to online. Besides numerous opportunities, this caused many legislation and regulation changes, as well as much stricter rules.

Massive Digitalization of Kenya

What sets Kenya apart from other gambling markets in the region is technology. The country has a very high internet penetration rate compared to others on the African continent – a whopping 43%. Also, a vast majority of internet users in Kenya are preferring mobile devices.

A result of this massive digitalization is an explosive growth of the online gambling sector, mostly because many people in Kenya also reside in rural areas far from casino betting shops. Internet access allowed people all around the country to explore online betting and gambling options. In 2019, 88% of bettors used their mobile phones to place wagers, and this number was increased in the following year.

Another important factor...

... that has contributed to the booming of the Kenyan online gaming market is M-Pesa service for online payments. Usage of this form of “mobile money” became extremely popular in the country, as the economy is still largely cash-based.

Credit cards and bank accounts are still relatively rare, so M-Pesa bridges the gap by allowing deposits in retail outlets, then transferred to online bookmakers and online casinos. This significantly enlarged the potential customer base for online gambling businesses.

In general, gambling is a completely legal activity in Kenya. However, its legal landscape is far from simple. Most of the regulations originate from a “Betting, Lotteries and Gaming Act” of 1966. Therefore, there’s no mentioning of online gambling in any shape or form.

A law passed in 2013, introduced regulations to websites offering sports betting and placing it under the authority of Kenya’s Betting Control and Licensing Board. But the regulations once again mostly were related to land-based operations, leaving iGaming unregulated.

As the online segment is tolerated by the government, this created an opportunity for numerous international operators to enter the market, and the operators licensed in other jurisdictions can freely operate in the country.

But the plan to change that was made by the Kenyan legislators, which caused quite a commotion on the market. In 2019, a Gaming Bill was drafted with an aim to introduce licensing for all types of online gaming. The bill was set to completely transform Kenyan industry by limiting overseas operators, regulating advertising, and imposing high taxes.

The things got even worst when Kenyan president, Uhuru Kenyatta, invited lawmakers to pass a total ban on gambling in August 2019. This statement has shaken the already unstable situation in the country regarding this issue.

Just a few months after, in December 2019, National Assembly Sports Committee pushed for additional fees and taxes, in a form of implementation of gaming levy at 1% on total revenues generated by sports betting operators.

This was not well-received by operators, especially since it came right after taxes increase amendments of the Gambling Law 2019.

Together with reducing taxes for gross gaming revenue from 35% to 15%, the government started taxing bettors’ winnings in 2018. The 20% tax came as a shock for the industry. When Kenya Revenue Authority (KRA) started to argue that this tax also applied for betting stakes, many big betting operators, including SportPesa exit the market.

Luckily, in July 2020, this controversial tax was removed.


... within days the government promised to reintroduce it in a different form within six months. After the removal of this law, SportsBesa resumed betting operations in Kenya.

The following gambling taxes that apply in Kenya at the moment include:

· Winnings from gaming - taxed at a rate of 15%

· The lottery tax - at a rate of 15% of the lottery turnover

· Betting tax - charged at the rate of 15% of the revenue generated from sports betting operations

According to all parameters...

… estimation shows that the Kenyan online gambling market will only grow. It is a market with a lot of potentials but requires a well thought out business plan to be commercially successful in the region.

Sports betting is the primary branch of this industry, but the popularity of platforms with online casino games is also raising. The best approach for operators might be combining casino games with sportsbooks, as these sites are high in demand.

The government is persistent in regulating the sector and imposing high fees, but for now, the controversial amendments are put to hold. So, the current legal landscape enables comparatively low cost for operators with a tendency to expand to this country.

While the future of the Kenyan online gambling market seems bright, new amendments and regulations are seemingly passed and changed overnight. This doesn’t create a sense of safe environment for both operators and players. Solid and reasonable regulation will remove this small stain on the huge potential of this market.

This is a featured article.


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