(Newswire.net — June 22, 2022) — The online gambling and sports betting industries in Kenya is about to experience another shake-up. This East African country’s government is set to reimpose the 20 percent tax on every wagering stake and double the taxation of foreign tech organizations. This is the same tax rate the BCLB (Betting Control and Licensing Board) criticized immensely in 2020.
The enormous sports betting taxes in Kenya virtually shut down the gambling industry almost three years ago. Betting operators pulled out their online sportsbooks from the republic in 2019.
Kenyan taxes and the government
The increment of tax rates from 10 percent to 20 percent led to the rapid decline of the gaming industry in Kenya. Operators were no longer interested in running their numerous operations since paying the new tax never made any financial sense. The Kenya Betting Control Board referred to the new 20 percent tax rate – an extra 20 percent tax on player winnings – as a “market killer.”
Kenya had to backtrack immediately when the government failed woefully to squeeze more revenue from gambling operators. Since then, the Eastern country’s financial experts and legislators have been going back and forth trying to resolve the issue.
However, it appears that Kenya has not learned from its drastic mistake, despite the rapid and significant decline in the recurrent state revenue from gaming taxes. According to the Kenyan Treasury, the new and higher tax rate is part of the 2022 Finance Bill.
The new Kenyan tax on sports betting
This new 20 percent tax applies to every form of gambling, including sports betting and lotteries. A provision for a 15-percent tax on gambling ads is also in place.
The primary goal of this new Kenyan tax on sports betting and other similar activities is to readily offset or compensate for losses incurred via inflation. Still, Kenya’s history shows that the opposite will most likely be the case.
New changes on the way
Kenya is one of the African countries with the largest gaming markets on the continent. This may no longer be the case unless Kenya can guarantee stability within the gaming industry.
A few changes are expected to be made to the Nairobi City County Betting Lotteries Gaming Amendment Bill (2021). But this offers little hope as not much help is expected from this angle.
The Nairobi County Assembly has the power to limit who gambles and when. Under that bill, only 5-star properties would be permitted to offer gambling services to their patrons. Gambling premises that do not qualify shouldn’t expect any operating licenses.
The bill will also limit betting and gambling establishments operating within the city by cutting their operating hours from 8 pm to 6 pm.
Moreover, gambling operators will need to adopt cashless betting options throughout the east African country. There is also a ban on video or audio programming that encourages lotteries, gambling, and gaming ads to be run before watershed hours.
If these changes are implemented, there will be a drastic reduction in sports betting activities. This will result in a considerable decrease in revenue for the gaming industry in the country.
Conclusion
Kenyan authorities are currently targeting a significant increase in revenue via the taxation of the gaming industry. Several measures have been set up that discouraged industry operators from continuing operations in the country. The authorities pulled back due to reduced revenues but are now gearing up to enforce it again.
Enacting this new bill could see a further decline in sports betting activities in Kenya. If this happens, sports betting and other gambling activities may die out unceremoniously.