In a plot twist that has punters scratching their heads, betting firms in Kenya are tightening the screws on payouts, leaving gamblers with slimmer pickings in the game of chance. It seems Lady Luck is having second thoughts about hanging out in the Kenyan gambling scene.
According to the Betting Control and Licensing Board’s (BCLB) data analysis, the payout ratios took a nosedive, plummeting to 72.8 percent or a measly Sh43.7 billion last year, down from a more generous 89.8 percent (Sh269.3 billion) in the glory days of 2019. It’s like the jackpot dreams are getting their own tax bill.
The betting stakes have also seen a dip, going from a high of Sh299.7 billion in 2019 to a less flashy Sh60 billion last year. The BCLB blames this downward spiral on the government’s aggressive tax measures and the introduction of compliance rules that hit the betting industry like a hurricane.
As Kenya was turning into a gambling nation, the powers-that-be decided it was time to rein in the madness. The BCLB states, “The severe compliance requirements put in place in 2019 to limit the gambling habit explains the recent trends.” Well, it looks like the fun police have arrived, and they’re armed with tax forms.
The betting frenzy in Kenya has become a full-blown soap opera, with key state agencies like the BCLB, the Treasury, and Interior ministers stealing the spotlight. Taxes have been introduced, and existing ones have been given a facelift, all in the hopes of making gambling less attractive. It’s like the government is playing chess with the gamblers, and the stakes are getting higher.
Reports of punters taking loans from banks and digital lenders to fund their gaming addiction have added a dark twist to the story. Some have even taken the ultimate gamble—betting their way into financial ruin and, tragically, suicide.
The government, not content with the current tax lineup, decided to spice things up. From July 1, 2021, a 7.5 percent excise tax on betting stakes joined the party, along with a 20 percent withholding tax on every winning bet. And just when you thought it couldn’t get any crazier, the excise tax on betting stakes upped its game to 12.5 percent from July this year.
Despite these tax hurdles, new players keep joining the Kenyan gambling circus. BCLB laments, “Despite these measures, Kenya’s gambling industry continues to grow as new players and games continuously enter the market.” It’s like trying to stop a leaky boat with a sieve.
The revenues of betting firms have taken a rollercoaster ride. In 2020, they made Sh36.4 billion, a year that saw a drop in active gamblers to 1.4 million. However, 2021 saw a rebound with Sh71.5 billion in revenues before a not-so-stellar Sh60 billion last year. It’s like the financial scoreboard is doing the cha-cha.
This financial waltz deals a blow to the Kenya Revenue Authority’s dreams of a tax windfall from the industry. The more taxes imposed, the more the betting firms seem to multiply. BCLB drops the mic with, “Despite these measures, Kenya’s gambling industry continues to grow as new players and games continuously enter the market.”
As if the drama weren’t enough, the State-backed Gambling Control Bill of 2023 is throwing in a few more plot twists. Brace yourselves for a 15 percent gambling tax on a firm’s gross gaming revenue and an extra one percent monthly levy on the same revenue. If that’s not enough, a portion of every stake might be squirrelled away for savings, pending the regulator’s nod.
What are these new taxes funding, you ask? Rehabilitation centers and awareness campaigns on the dark side of the gambling craze. It’s like the government is saying, “You want to roll the dice? Fine, but we’re putting some chips aside for the aftermath.”
BCLB data reveals that 65 percent of Kenyans gamble for the elusive jackpot, while the rest are in it for the sheer entertainment value. With 76 percent of youthful gamblers, Kenya takes the crown for the highest number of young risk-takers, leaving Nigeria and South Africa trailing in the dust. The average monthly stake? A modest Sh2,500, with 80 percent of punters earning less than Sh30,000 per month. It’s like a budget-friendly thriller that keeps us guessing what’s next in this gambling saga.
