The Kenyan government has announced sweeping reforms to the taxation system for betting activities, set to take effect on July 1, 2025. These changes are aimed at making betting more attractive to players while creating a more favorable business environment for operators in the sector.
Substantial reductions in excise duty and withholding tax
One of the most significant adjustments is the considerable reduction in tax rates. The excise duty, previously set at 15% on every bet placed, will now be replaced by a 5% tax on the amount deposited into a player’s betting wallet. This means that punters will pay far less upfront, keeping more funds available for actual gameplay. Moreover, the tax will be collected when money is transferred from a mobile wallet to a betting account, simplifying compliance procedures and easing the administrative burden on both users and operators.
Another major change involves the withholding tax on winnings. Under the old system, players were taxed 20% on their net winnings. From July 2025, this will drop significantly to 5%, applied only to the amount withdrawn from a betting wallet. As a result, players will be able to retain a much larger portion of their winnings, which is expected to encourage more frequent participation and increase overall engagement in the market.
Benefits for players and operators alike
These tax reforms offer notable advantages for both players and operators. Lower tax rates translate into greater savings for users and potentially higher returns, while operators benefit from simplified reporting and a more streamlined tax collection process. By shifting the tax point to deposits and withdrawals rather than each individual transaction, the new system reduces complexity and minimizes the likelihood of disputes or errors. This more investor-friendly regime is expected to drive growth in Kenya’s betting and gaming industry by attracting new users and investment.
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Balancing growth with regulation
At the same time, the government stresses the importance of responsible gambling and effective regulatory oversight. By focusing taxation on wallet-level activity instead of every single transaction, the authorities hope to balance supporting the industry’s growth with addressing social issues like gambling addiction and underage participation. The Kenya Revenue Authority has already integrated its systems with betting companies to enable real-time monitoring and ensure compliance with the new rules.
A new era for Kenya’s betting sector
The tax reform marks an important change in Kenya’s approach to regulating and supporting the betting industry. With lower rates and a simplified system, the sector now has a solid foundation for further growth – provided that regulatory frameworks develop alongside to protect users and promote responsible gambling.
Discover Kenya’s new betting tax rates
Starting from July 1, 2025, Kenya’s betting tax structure will change significantly:
- the excise duty will be reduced from 15% on every bet placed to 5% on deposits into betting wallets. This means the tax will be charged when funds are transferred from a mobile wallet to a player’s betting account, rather than on every single bet,
- the withholding tax on winnings will drop from 20% of net winnings to 5% on withdrawals from betting wallets. This allows players to keep more of their winnings, as the tax will only be collected when money is withdrawn,
- these changes aim to simplify the tax system, reduce financial burdens for players, and encourage growth in Kenya’s betting sector.
New tax rates and responsible gambling – How much will players pay?
Lower tax rates will make betting more accessible and the market more attractive, but the government remains committed to social safety. Moving the tax point to wallet-level transactions – during deposits and withdrawals – allows better monitoring of player behavior without interfering with every single transaction.
In practice, this means that a player who deposits 1,000 KES into their betting account will pay 50 KES excise duty (5%) on that transaction. If they later win and withdraw 2,000 KES, they will pay another 100 KES withholding tax (5%) at withdrawal. The total tax cost will be 150 KES, which is noticeably less than under the previous system, where the tax on winnings alone could be as high as 20%.
With this new tax model, players not only pay less but also gain more transparency in managing their funds. At the same time, the simplified system helps regulators monitor the industry more effectively and can better limit risky behavior, supporting the idea of responsible gambling.
