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Kenya is set to re-regulate its gambling industry as it awaits parliamentary approval of the Gambling Control Bill 2023.

This proposed legislation aims to revamp regulations, introduce stricter oversight, and enhance player protection measures across the nation.

Central to this bill is the establishment of a new Gambling Regulatory Authority (GRA) intended to replace the current Betting, Control, and Licensing Board (BCLB).

If passed, the GRA will wield considerable authority in licensing, renewals, suspensions, and revocations within the gambling sector, aiming to bolster safeguards and ensure compliance with wider industry standards.

The proposed reforms encompass various measures, including a prohibition on registering minors for any online gaming, lottery, or betting activities. 

Additionally, the bill advocates for limitations on gambling advertisements on TV and radio, restricting them to the hours between 6am and 10pm.

To deter unlicensed operations, the bill proposes substantial penalties. For example, initial violations could result in fines of up to KES3m (€18,413) or a three-year prison term.

Repeat offenders could face increased penalties of KES5m (€30,703) and up to five years in prison.

Meanwhile, promoters of unlicensed gambling might incur fines of KES1m (€6,141), or a one-year prison term.

Tax rules 

The legislation also proposes a 15% tax on gross gambling revenue, coupled with a monthly gambling levy determined by Kenya’s 47 counties. 

Kenya’s existing tax framework encompasses a 15% levy on GGR, a 30% corporate tax on profits, a 12.5% sales tax on each bet placed, and a 20% withholding tax on winnings disbursed to players

In a recent Bloomberg article, betPawa founder Kresten Buch voiced concerns about the impact of taxation, referring to it as the industry’s most significant challenge. 

While the taxes align somewhat with European standards, Buch warned the heavy burden on players could drive legitimate operators away, paving the way for less reputable companies that disregard regulatory norms.

Foreign shareholding 

The bill specifies that licensed operations must have a minimum of 30% shareholding held by Kenyan citizens, allowing foreign nationals to possess up to 70%. 

This marks a notable departure from the previous rule, which demanded a minimum Kenyan shareholding of 49%.

The new law also obligates gambling entities to conduct transactions solely through Kenyan-registered banks and requires an insurance security bond or bank guarantee to cover liabilities arising from licensed gambling activities.

In total, casinos will be required to deposit KES20m (€122,674), while online sports betting and lotteries must deposit KES200m (€1.2m). 

Minimum stake 

Moreover, the legislation proposes a minimum stake of KES20 (€0.12) for online gambling.

NEXT.io understands that this measure aims to discourage individuals with lower incomes from gambling and betting.

Moreover, the authority recommends that a yet to be determined percentage of every bet placed will be set aside as savings for the customer.

Some quarters in the industry believe that this measure, in addition to the tax on winnings, will further diminish the size of each bet and could encourage players to seek out unregulated options.

Operators caught allowing bets below the minimum threshold could face severe penalties of not less than KES5m (€32,880), or even imprisonment for up to six years.

Next steps

The bill was introduced by National Assembly majority leader Kimani Ichung’wah. While this means the bill’s passage seems likely, the exact timeline for parliamentary approval remains uncertain. 

Following parliament’s endorsement, the bill will proceed for the president’s signature, marking a crucial step before implementation.

Kenya’s move towards regulatory reform coincides with a notable surge in online gambling activities.

According to Kenya’s Business Daily, Kenyans collectively wagered KES88.5bn in the 12 months to June 2023. 

This figure was based on the KES6.64bn collected by the Kenya Revenue Authority, which was subject to a 7.5% tax.

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