Bad News for Online Casinos in Kenya: President Demands 35% Tax

  • Kenyan president Uhuru Kenyatta vetoes the Finance Bill exempting sports betting operators and casinos from the 50% taxation rate
  • The president proposes a new uniform rate of taxation of 35% for all gambling revenues

Kenyan President

Sports betting operators in Kenya thought they were given a reprieve after they were exempt from the new gambling taxation bill which proposed a uniform 50% tax for all gambling activities. Originally, this included sports betting providers, but lawmakers decided to let them off the hook, allowing them to stay at the old, much lower rate of 7.5%.

However, it seems that betting operators in Kenya aren’t out of the woods just yet, as country’s president Uhuru Kenyatta vetoed the bill and refused to sign it into law. President Kenyatta maintains that the exemption goes against the spirit of the law, which, aside from boosting the budget, should also help reduce the number of young people getting involved with sports betting.

Finding middle ground

Those who have been following legal developments in Kenya are probably aware that the new legislature is a part of the Finance Bill proposed by Henry Rotich, Treasury Secretary. Although its primary intention is of the financial nature, decreasing the participation of the youth in betting activities is also a significant consideration.

Kenyatta believes exempting sports betting operators from the new law totally defeats this secondary purpose and that’s the reason he refuses to give the Finance Bill his approval. Instead, he proposed a new uniform taxation rate of 35% for all gambling revenues, which he would agree to immediately. If this proposal is accepted and passed by the Parliament, it would mean a 23% increase for gaming activities, 30% for lotteries, and 20% for competitions, alongside the 27.5% increase for sports betting operators.

Overriding the president?

Although the president can temporarily veto a law, the Parliament can still override his veto in Kenya. For this to happen, both legislative chambers would have to support the bill in its original form with the two-thirds MPs voting “yes.”

As things stand right now, President Kenyatta’s compromise isn’t likely to be welcomed, as the 35% rate has already been discussed, but it was rejected as still being “punitive enough” to make it profitable for most Kenyan gambling operators to continue providing their services.

While Kenya is trying to come up with the solution that would somehow be acceptable to everyone, although it seems unlikely, neighboring Uganda is observing with keen interest. In that country, lawmakers are considering a tax bill that would share the tax burden between the operators and the players. Players would pay 15% on their winnings, while the operators’ revenue would be taxed at 20%.

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