This year, the number of licensed gambling companies in Kenya has significantly decreased, with 10 companies exiting the market since January.
The Betting Control and Licensing Board (BCLB) currently lists 118 licensed gambling companies, down from 128 at the beginning of the year. This decline may indicate that some companies have had their licenses revoked, while others may have voluntarily shut down their operations, although the BCLB has not provided specific reasons for the decrease.
However, several companies that have exited the Kenyan market pointed out that "punitive taxation" was a significant factor in their decision to cease operations. For example, Betsafe will close in May 2024, citing the heavy tax burden as making it increasingly difficult to remain profitable.
Despite several companies exiting, the Kenyan gambling market has also welcomed new entrants. According to the latest list from the BCLB, 12 new companies have joined the industry, including Top Deck Entertainment, Lucky Majesty Limited, Superior Ideas Kenya Limited, Glory Bet Limited, and Poker Kings Limited.
The high turnover rate of gambling companies has also raised concerns about the industry's tax obligations. Gambling companies in Kenya are required to pay a 15% tax on total gambling revenue, as well as a 30% corporate tax on profits. They also need to pay a 16% income tax, as well as annual licensing and compliance fees.
Furthermore, the financial burden extends to the gamblers themselves, who must pay a 12.5% excise tax on each bet placed and a 20% withholding tax on each win. These tax rates are among the highest in the region, posing challenges for both gambling companies and gamblers.
Kenya is one of the African countries with the highest proportion of young gamblers, with 76% of gamblers under the age of 35. This puts Kenya ahead of other major African gambling markets such as Nigeria and South Africa.
BCLB data shows that Kenyan gamblers spend an average of 2,500 Kenyan shillings ($19.38) per month, with 80% of gamblers earning less than 30,000 Kenyan shillings ($232.56) per month. For many, especially the unemployed, gambling is a quick way to make money and pay for daily expenses, which perhaps explains why the gambling industry remains so popular despite the heavy tax burden.
The Kenyan government, through the Ministry of Finance, is intensifying efforts to regulate the gambling industry more strictly. These measures include increasing taxes and implementing stricter compliance measures, aimed at curbing the use of the gambling industry for money laundering and other illegal activities.
For example, the Ministry of Finance recently attempted to raise the excise tax on gambling bets to 20% through the 2024 Finance Bill. However, this proposal was ultimately rejected, and the tax rate remains at the current 12.5%.
