Following President Uhuru Kenyatta’s approval of a 7.5 percent levy on gambling wagers, the destiny of Kenya’s sports betting business has been revived.
The tax was included in the Kenyan Revenue Authority’s (KRA) updated ‘Finance 2021 Bill,’ which saw the government change its federal levies on gambling and telecom.
The Kenya Revenue Authority (KRA) has agreed to cut Kenya’s blanket 20 percent wagering tax levied on all gambling verticals in exchange for presidential clearance.
2020 Finance Bill
The contentious tax levy was approved as part of Kenya’s 2020 Finance Bill, but it was put on hold after a last-minute injunction by a Nairobi High Court, which asked that the KRA justify the ‘doubling of tax rate that had originally been settled at 10 percent.”
Kenya’s government instructed Treasury Secretary Ukur Yattani to evaluate corporate tax rates under pressure to sign off on the 2021/2022 National Budget.
Yattani’s Finance Committee suggested that the KRA implement a 7.5 percent wagering tax on all gambling verticals, including lotteries, as an addition to the Finance Bill that requires President Kenyatta’s ascension.
Despite the Finance Committee’s acceptance, Kenyan gaming had no assurance of gaining President Kenyatta’s assent, as Kenyatta had become an outspoken opponent of the gambling industry.
The Kenyatta government had ordered market leader SportPesa and others to pay the Kenya Revenue Authority (KRA) KSH 60 billion in outstanding taxes tied to player winnings for several years.
The Kenyatta government’s feud with the sports betting industry reached a head in 2019, when national telecoms and banks were forced to cut off all commercial services to licenced bookies.
A number of bookies, including SportPesa, have left the Kenyan market due to regulatory uncertainties. However, Sportpesa would reappear in 2020 under the new ownership of Milestone Games, with the Betting Control and Licensing Board suspending its licence immediately (BCLB)
New market entrants
Despite the ongoing regulatory uncertainties, Kenyan sports betting has welcomed new entrants into the market.
Betsson AB established its Betsafe Kenya brand in conjunction with BCLB licenced incumbent Bet High Kenya at the start of 2021. Betsson stated its commitment to long-term growth in Kenya when it initially arrived, developing and marketing the market’s first safer gaming programme for players.