The Future of Online Gambling in Kenya

Increased Internet penetration and rapid technology advancements are the main reasons for the exponential growth of online gambling around the globe. Now, Kenya is at the center of attention with its ever-expanding online gambling and sports betting market. Easy access to mobile devices has also boosted the online gambling market in Kenya.

A survey conducted by the US research firm GeoPoll in December 2021 revealed that over 80% of Kenyan youths had tried gambling, and most used touchscreen devices to place their bets. According to Fabio Ogachi, a professor of psychology at Nairobi’s Kenyatta University, many people engage in gambling to solve their financial problems.

Online Gambling Market Size and Growth

In 2020, the Kenyan gambling market was valued at $40 million. Kenya is on the list of the top 5 African countries when it comes to market size. Industry insiders estimated that the Kenyan online gambling market grows by 7% every year. The highest gross gambling revenue comes from sports betting. Soccer, and more precisely the European leagues, attract the most betting action.

The introduction of M-Pesa, a service for online payments, has also contributed to the growth of the online gambling market. The truth is that online payment methods are not quite popular among Kenyans. M-Pesa (also known as mobile money) allows players to store and transfer money through their phones. Another reason for the exponential growth of the online gambling industry in Kenya is that many people live far from betting shops. Hence, online gambling is their only option.

Furthermore, a good-enough number of online casinos accept players from Kenya and support the local currency – Kenyan Shilling (KES). These gambling sites offer plenty of games to correspond to the preferences of all types of players. Since the majority of players are youths, bets are usually low in value but high in volume.

Overview of the Gambling Laws in Kenya

In Kenya, land-based gambling was legalized in 1966. The primary gambling legislation is the Betting, Lotteries, and Gaming Act. The authority that regulates the gambling market in Kenya is the Betting Control and Licensing Board (BCLB). Online gambling became legal in 2011. But until 2019, the market was subject to a monopoly held by Betkenya.

At the moment, foreign operators are allowed to accept players from the Republic of Kenya on condition they have a license from the BCLB. Interested operators must comply with high standards to obtain a license. To ensure that players’ best interests are protected, the Kenyan gambling law stipulates that operators must pay out winnings within 7 days and establish an in-house customer care center in Kenya.

Kenyans must be at least 18 years old to participate in gambling activities. In a bid to reduce gambling-related harm, Kenya has introduced a partial ban on gambling commercials. Advertising of gambling services is allowed only from 10 pm to 6 am. What is more, companies are no longer allowed to use celebrities in their gambling commercials. All gambling-related ads must advocate responsible gambling and carry a sign indicating the minimum gambling age in Kenya. Furthermore, operators must obtain advertising signage to promote their gambling services.

Taxation Regime

An article on gamblingplex says the Kenyan Revenue Authority imposed a 20% tax on the original stake as well as gambling winnings in 2019. As expected, operators did not welcome the tax hike. The burdensome taxes forced two of the most reputable bookmakers in Kenya, Betin and Sportpesa, to leave the market. The consequences were also quite expected – the betting revenue significantly plummeted.

In 2021, President Uhuru Kenyatta agreed to lower the tax on gambling stakes to 7.5%. But in 2022, Kenya’s Treasury unveiled its plans to bring back the 20% tax on betting and gaming stakes. Industry experts warn that the tax hike is expected to trigger a massive exodus of operators. While the Kenyan gambling market has a huge potential, strict regulations will have a negative effect on the market.

Source: ghafla.com

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