Kenya Lowers Betting Excise Duty to 5% Amid Rising Gambling Concerns

During the third reading of the tax bill in parliament yesterday, lawmakers also amended how excise duty for the betting sector will be paid, shifting the point of taxation from the moment a bet is placed to when funds are transferred from mobile money wallets to betting accounts.

They said the change is designed to improve tax enforcement, particularly against foreign or virtual betting operators that were difficult to monitor under the previous system.

The new framework enables the government to capture excise duty before funds enter platforms that often operate beyond local regulatory reach, leveraging Kenya’s tightly regulated mobile money infrastructure.

“When you are placing a bet, the current taxation regime is that when you have money in your mobile money account and then you transfer that money to the wallet of a betting company, the time of charging excise duty is when you place a bet,” said the chairman of the Finance Committee, MP Kimani Kuria.

“There are so many entities operating virtually, some outside the country from which we are not able to get this excise duty from them. This now means that every time a Kenyan transfers money from their mobile wallet to the wallet of the betting company, then that’s the time the excise duty is paid,” he continued.

In addition to the excise duty on stakes, betting companies are required by law to withhold winnings at a rate of 20% and to pay 15% of gross gaming turnover less the amount paid out to punters as winnings.

The change aligns with the overarching theme of this year’s Finance Bill, which intends to increase revenue by sealing loopholes in collection as opposed to adding new taxes. Even easy targets for taxation like alcohol, tobacco, and betting have been spared the lash.

KRA has integrated its systems with 36 betting firms, enabling real-time transaction monitoring to curb tax evasion and boost compliance. This digital oversight marks a strategic shift in tightening revenue controls over a sector long plagued by opacity.

Between July 2024 and March 2025, excise duty surged 24% to KSh 9.97 billion, driven by increased betting activity. However, withholding tax on winnings fell 15% to KSh 4.81 billion, a decline linked to tighter odds and lower payouts. The contrasting trends point to a sector where more is being staked, but less is being won.

Betting has been under intense public scrutiny for ruining livelihoods and surfing on a dangerous tide of addiction. Calls for stringent regulation have prompted the Betting Control and Licensing Board (BCLB) to review how gambling adverts are made and barring influencer marketing. Higher taxes are intended to limit the lucrative nature of the practice; by reducing the excise duty on betting, the government is seemingly unserious in its regulatory commitment.

Kenya is the third most active betting market in Sub-Saharan Africa, trailing South Africa and Uganda, according to Geopoll’s 2025 survey. The betting industry continues its rapid expansion, with the total amount staked rising 17.04% to KSh 75.18 billion in the nine months to March 2025.