Lawmakers Push For Additional Taxes and Fees on Kenya’s Gambling Industry
Kenya’s gambling industry could be heading into its toughest year yet, if newly introduced amendments to the Gaming Bill 2019 sweep seamlessly through the Parliament.
The National Assembly Sports Committee is pressing for burdening the industry with additional taxes and fees and wants these implemented before the end of the current fiscal year in June 2020, local news outlets report.
The committee has proposed the implementation of a gaming levy at 1% on total revenue generated by sports betting operators. Companies that fail to pay the levy could face penalties of up to KES200,000. The money coming from fines would be used to finance the National Gaming Authority and its efforts to clamp down on unregulated operations.
Commenting on the newly proposed amendments, Victor Munyaka, Chairman of the National Assembly Sports Committee, said that introducing the changes was:
“a priority business before we broke for recess” and that they would look to “fast-track it when the House resumes to effect the tax measures this financial year.”
News about the potential implementation of new gambling taxes and fees emerge amid turbulent times for Kenya’s sports betting industry. Two of the sector’s leading operators – SportPesa and Betin – quit the Kenyan market this past fall, citing “a hostile operating environment” as the reason for their departure.
Both operators along a number of other Kenya – facing gambling companies were embroiled in a bitter dispute with country regulators and lawmakers over license renewal issues and the introduction of a 20% excise tax on all betting stakes placed by Kenyan bettors earlier this year.
Increased License Renewal Fees and Taxes on Betting Ads
The committee has proposed a significant reduction of the license fees operators are required to pay in order to be issued permits to operate in Kenya. Licenses for all forms of online gambling will cost KES50 million, totalisator licenses would be pegged at KES5 million, land-based casinos at KES10 million, prize competitions at KES10 million, and private lotteries at KES15 million.
However, already licensed operators will have to pay higher license renewal fees. Online gambling operators will thus be required to pay a KES15 million annual renewal fee, instead of a KES30 million fee every three years. Retail betting operators will be required to pay KES5 million every year, totalisators will have to pay a KES1 million fee, prize competition providers will be able to renew their licenses after paying a KES500,000 fee, and casino licenses will be renewed at KES3 million annually.
If adopted, the proposed amendments will also hit the betting advertising industry. Media outlets will have to pay a 35% tax on revenue from betting adverts, it became known over the weekend. A report on the proposed changes to Gaming Bill 2019 reads that people shall not hold themselves “out by advertisement, promotion, notice or public placard with the aim of enticing members of the public to participate in gaming.” In other words, the amendments also aim to bar endorsement by people who pose as bet winners. Other amendments listed in the report include giving the National Gaming Authority the power to conduct security checks, vetting, and due diligence in relation to any gambling activities taking place on the territory of Kenya as well as to handle complaints against gaming licensees, carry out investigations, and impose penalties.
The Sports Committee has also proposed the establishment of a Gaming Appeals Committee that will handle appeals by “any person aggrieved by a decision” of Kenyan gambling regulators.