If you woke up this sunny morning in beautiful Kenya, you could be forgiven for scratching your head and believing it’s Groundhog Day.
For, just as you thought it was safe and reasonable to go out and play again, the country’s fiscal authorities (in a repeat of a previous highly-contentious, then abandoned, policy) have decided to re-impose a swingeing 20 per cent tax on betting wagers — and doubled levies on foreign operators.
Three years ago Kenya’s Treasury Department precipitated a titanic struggle with the country’s regulatory Betting Control Board (BCLB) and local gambling industry heavyweights Betin and SportPesa when they tried to impose a 20 per cent tax on wagers.
In July, 2019, at the height of the tax storm, SportPesa, the American-Bulgarian-Kenyan-owned sports news and sports betting brand–and undisputed market leader–decided to close down its operations in the East African country.
The move was a body blow to the local sporting scene because of SportPesa’s lucrative sponsorship of many teams across the nation.
Then in October, 2020, when the proposed hike—and a claim for onerous back tax–was dropped, the SportPesa brand returned to the Kenyan market in a five-year deal with a company calling itself Milestone Games Ltd.
Now the so-called “market killer” tax is poised to rise from the dead and, like a zombie, once again haunt Kenya’s iGaming industry.
The Honourable Ukur Yatani Kanacho, Cabinet Secretary at the Ministry of Finance, Treasury, is leading the legislative charge to revive the 20 per cent tax rate on wagers as part of the 2022 Finance Bill.
And the treasury is also planning to levy a new 15 per cent tax on all betting-related advertising.
The Kenyan Revenue Authority (KRA), moreover, is also proposing to double the current digital service tax (DST) to three per cent of transactional value, which would impact iGaming wagers, among all types of Internet commerce.
As has been previously well documented by iGamingFuture, like many jurisdictions in emerging markets, Kenya just can’t seem to make up its mind about the merits, or otherwise, of betting:
Clearly authorities are in desperate need of the revenue that legal, controlled gambling can bring.
But many leaders, among them the country’s own president Uhuru Kenyatta, seem deeply ambivalent, and even opposed to betting, on moral grounds.
In further legislative conflict, the Betting Control Board is now also locked in a row with the county administration in Nairobi, the Kenyan capital.
City Hall is proposing to restrict gambling to five-star hotels in the city and limit gambling hours to between 8pm to 6am.
But the move is seen as a power grab by the BCLB.
“Gaming is a national issue that cannot be dealt with differently at [county level],” stressed BCLB Chief Executive Peter Mbugi, who argues City Hall is usurping the board’s authority.
“We have made our objections — and if they [City Hall] go ahead with the [legislation] we have the option of seeking High Court interpretation of the Gazette Notice,” he warned.
“But we do not want it to get there.”
At stake is the future control of Kenya’s betting industry, reputedly worth KES200 billion a year (£1.37bn/US$1.72bn/€1.63bn) and growing thanks, in great part, to a surge in smart phone ownership.
Last month the proposed gambling limitation bill sailed through its second reading at the Nairobi County Assembly. It’s only one step away from becoming law and no doubt opening a second front in Kenya’s ongoing gambling war.
Meantime, despite establishment disapproval, gambling appears to be booming in East Africa’s leading nation.
Apart from the dense market penetration of telecoms-based operators such as SportPesa, the Nairobi conurbation, for example, has a large number of live gambling shops–owned by firms like Betika, Odibets and Mozzartbet–where punters, many of them young men, pursue their love of sports by betting on the results of major European football leagues.
And, despite the ongoing threat of what is effectively a government clampdown through higher taxes, the gambling sector in the nation of 56 million people continues to grow.
The number of betting firms licenced to operate in the country now numbers an even 100, with high local ownership, a year-on-year growth of over 30 per cent.
Asante sana, as they say in Swahili.