Online gambling surges in Kenya, prompting president to up tax rates

  • Last week Kenyan government introduced a 35% tax rate on all gambling revenue
  • It is believed it will hit online operators particularly hard, ‘stunting’ the industry

Few countries or continents have been immune from the surge in demand for online gambling in the last couple of years and Africa is no exception. One particular country that has seen a huge growth in online casinos is Kenya.

Now, in response to the burgeoning industry, the country’s government has levied a major tax hike against gambling operators.

kenya gambling tax
Kenyan President Uhuru Kenyatta has recently introduced a 35% tax on gambling operators in the country

Last week Kenya’s President Uhuru Kenyatta signed a new bill into law that charges a 35% tax rate on all gambling operators in the country including casinos, lotteries and bookmakers. The woes of gambling operators don’t end there, for all companies based in Kenya are also liable for corporation tax at 30%.

Leap in taxation

One market that will be hit particularly hard by the new higher tax threshold is the online gambling trade. The majority of Kenyan gamblers currently wager online and up until last week, the taxation rate for gambling operators in Kenya stood at 7.5% for bookmakers, 5% for lotteries and 12% for casinos.

Kenyan officials are clearly alarmed at the surge in popularity of online gambling and were eager to take measures to stem its unfettered growth. Whether slapping all operators with a 35% tax rate can be considered to be acting in the interests of consumers is debatable however.

“We were very concerned about betting among school-goers so we made it difficult for people to bet,” said President Uhuru back in April. “We want people who bet to have their money go to constructive projects through tax.”

A growing industry

The government hopes that the sudden leap in taxation will stem and contain growth in an industry which has been increasing unchecked, aided by the proliferation of smartphones and the improvement in internet speeds in Kenya.

Only Nigeria and South Africa have larger gambling markets than Kenya within the continent, with Kenyans particularly drawn to sports betting.

In years gone by, internet cafes provided the country’s bettors with a means of getting online and wagering, but the smartphone revolution has made gambling easier and less dependant upon cafes.

Predictably, the new tax rate has angered gambling operators, who have complained that it will kill their business and deter international operators from getting involved in the Kenyan market.

The government remains undeterred though, and is content to see taxation put the squeeze on Kenya’s gambling trade. Tax may be a blunt instrument, but it’s one the Kenyan government isn’t afraid to wield.

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