Peeling back the layers of Kenya’s dynamic gambling sector, one cannot overlook the significant impact of taxation. Its intertwined relationship with the industry extends beyond just revenue generation for the country. In fact, it reaches into the very heart of business operations, affecting profitability and shaping the overall industry landscape.
Government regulation
Kenya’s Gambling Control Bill has set a clear structure for the licensing and operations of gambling entities within the country. To promote locally held interests, it mandates that at least 30% of the shares in all licensed operators be held by Kenyan citizens. Additionally, entities are required to conduct transactions through a bank that is registered in Kenya.
Security bonds & licensing fees
To safeguard against potential unlicensed gambling activities, entities are also requested to deposit either a bank guarantee or an insurance security bond. The payment structure is tiered depending on the type of gambling operation; casinos need to deposit KES 20 million, while online sports betting and lottery operations need to deposit a considerably higher amount of KES 200 million.
Role of the New Gambling Authority
In terms of lottery operations, the newly formed Gambling Authority will be instrumental in licensing all lotteries aimed at raising funds for charitable causes. It’s stipulated that a minimum of 30% of the lottery proceeds must be allocated towards the promoted charitable cause.
Tax regime for gambling winnings
Strict taxation laws have been implemented by the Kenyan government to regulate the earnings from gambling. Initially, a 7.5% excise tax was imposed on betting stakes, but this has recently been increased to 12.5%.
Taxation of betting firms
Betting firms in Kenya are obligated to pay a 15% tax on their gross gaming revenue. This is the total amount of money wagered by customers, minus the winnings and bonuses paid out. In addition, they are subject to a corporate tax of 30% on their earnings.