The growing Betting, Gaming, Lottery and Competition industry in Kenya has been dealt a major blow after the government increased the taxes charged on the sector by over 200% in the 2017-2018 national budget.
The new tax, proposed by Treasury Cabinet Secretary Henry Rotich raises levies charged on Betting, Lotteries, Gaming and Competition from 7.5,five,12 and 15 percent respectively, to a uniform 50 percent making it one of the highest corporate taxes in Kenya.
While presenting the Sh2.62 trillion budget—Kenya’s largest budget since independence—Rotich said the Betting and Gaming industry in Kenya is still under-regulated despite having grown tremendously in recent times.
“Betting and gaming have become widespread in our society in an environment that is inadequately regulated. Its expansion is beginning to have negative social effects particularly on the youths and vulnerable members of our society”. Rotich noted in his Budget Speech at parliament on Thursday.
The CS further noted that the government will funnel the increased revenue to a sports fund that will be dedicated to supporting sports-related activities
“All proceeds of these will be put in the newly-created National Sports, Culture, and Arts Fund to help support the development of sports, culture and art in the country,” he said.
According to Kenya Revenue Authority Commissioner General John Njiraini, 8 of the 25 licensed betting companies in Kenya had paid a total of Sh4.7 billion to the government in taxes between financial years 2014/2015 and 2015/2016.
The gambling industry in Kenya has been rapidly growing recently, evidenced by the influx of foreign sports betting firms including Betin, Betway, Dafabet and others.
In the last 18 months, sport betting firms including SportPesa have been pumping millions of shillings into various sports development activities. The company recently sponsored Kenyan footballers for a friendly match with English top flight side Hull City in England to help improve and expose their talents.
Kenya is Africa’s third-largest gambling market, behind Nigeria and South Africa.