Need for Different view on the betting and gaming industry in Kenya

A recent article reported that Kenyans are spending over Ksh 160 billion on betting annually according to data acquired from Mpesa.

According to the report, this was alarming and calls for stringent regulations such as an increase in taxation to the gaming companies and even revocation of operating licenses.

It’s important to clarify that, the Kshs 160 Billion above is just the deposits by the punters and it doesn’t necessarily mean a profit to the gaming companies. It will be prudent to compare the figures to the annual payouts by the companies to winners. for instance, 70-80% of this amount goes out as payments to winners and in taxes which is considered astronomical in Kenya compared to other global markets.

Gaming companies in Kenya are subjected to high taxes which has been pushing them out of business. Here’s the breakdown: 7.5 % excise tax, 20% withholding tax on net winnings, 15% gaming tax and 30% corporate tax. All these are above what happens in ideal markets. Besides this, gaming companies have other normal bills such as salaries, premise bills and overhead costs which dimples the income even further. This is perhaps an area the incoming leaders need to consider and work hand in hand with the gaming firms to rationalize operations for the benefit of all stakeholders.

An area that has hugely been ignored when reporting on matters gaming companies is that they remit taxes worth over Ksh 1.5 billion monthly to both local and National governments. These are monies that are used to develop sports and other sectors of the economy.

Undoubtedly, the gaming industry has extensive corporate social responsibility (CSR) programmes, embracing issues as diverse as responsible gambling, education, environment, health and well-being and social inclusion. This was very evident at the onset of the covid-19 pandemic. Majority of sporting organizations are directly sponsored by gaming companies. They are an important contributor to the economy through creation of jobs, continued capital expansion and the payment of taxes to the national government.

That notwithstanding, the gaming industry has provided significant funds for financing government organisations and other associations aimed at improving the socio-economic and social status of persons with disabilities, vulnerable groups, and other persons in need of social assistance, social welfare institutions, sports, local self-government, and the treatment of rare diseases.

Achieving growth in the economy requires the creation of a business-friendly environment in order to improve the country’s competitiveness through structural reforms, market liberalization and foreign capital inflows for investment. It is recommended that fiscal policy ought to support growth by establishing a stable internationally competitive and socially fair tax system.

This is an industry just like any other and that runs business legally.


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