The gambling industry in Kenya was left reeling after the government announced measures to tax online betting platforms. Treasury Secretary gave the budget reading, illustrating 10 percent of all stakes would be remitted to the government. Online betting firms got a bad reputation from their entrance into the Kenyan market. Individuals, advocacy groups, and even the media have contributed to the debate against the endorsement of casinos on moral grounds. The secretary stated betting is widespread in the society leading to negative societal effects on the youth particularly. The betting tax is an initiative to curtail the increasing enthusiasm in betting activities to divert it into securer revenue generation.
Gambling bill
The tax would be separate to a bill looking to jump start regulations in the Kenyan gambling industry. Currently undergoing evaluation in parliament, the 2019 gaming bill entails measures that would introduce higher expenses on licensed operators and come up with the first nationwide lottery. The bill allows the replacement of current regulatory authorities like the betting and licensing control board with new entities, which is the national gaming authority. The institution would be tasked with enforcing regulations and giving licenses to operators. The bill provides higher licenses and related fees for application as though it does not include language for higher gambling taxes.
High unpopularity
Kenya as a market is still somewhat conservative, especially in vice services such as online gambling. The increasing number of people engaging in online casinos has triggered warning bells from several watchdog groups like the church and other social platforms. A large number of the participants also engage regularly in online betting. They part with huge sums to get higher returns. A jackpot draw is given every week with a pot summing in the millions. The fixation thousands of gamblers have with the big winning sounds delusional and potentially dangerous. Most of the participants are below the poverty line and so they are not able to support their gambling habit. It is no wonder, concerned groups wave pitchforks at betting platforms claiming they are ruining the society.
Government initiatives
The national assembly initially proposed the taxation rates be over 30 percent of the winnings. The announcement of a 10 percent levy surprised several government officials expecting it would be higher. The government is focusing on other illegalities within the gambling industry. That includes deporting foreigners claimed to be conducting acting illegal operations within the local betting sector. The equivalent of the Internal Revenue Service, the Kenyan Revenue Authority is also looking for millions in back taxes owed by local gambling operators such as Betin and SportPesa.
Though the courts have been a thorn in the side, thwarting some government initiatives to regulate the industry. For example, the courts, ruled a claim to restrict betting companies from advertising within the Kenyan market unconstitutional. The courts are also placing the tax percentage ruling on winnings.
The Kenyan online gambling industry accelerated in its growth over the past decade by particular platforms. Online gambling became prominent after the introduction of SportPesa and Betin. Their attractive marketing approaches and simple interface made it easy to join and understand. They also took advantage of key sports idolized by the local market, which is soccer. Consumers wanting to wager on sports now had an outlet they could easily understand. The government’s move will result in negative reactions from the public who are averse to taxation on entertainment. Economically it may result in a reduction overall demand because consumer spending on the platform. That may be good news for other sectors of spending because the organization functioned as a private entity.
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