The list of betting firms licensed for the year ending June published by the Betting and Licensing Control Board (BCLB) shows the number of registered betting firms has increased to 100 defying a government’s policy to clamp down on gambling through the imposition of higher taxes both on the companies and punters.
In 2019, the Government introduced excise duty on betting to curb the adverse social effects caused by betting, particularly amongst the youth. However, the Finance Act 2020 removed excise duty on betting activities following lobbying by betting companies to the National Assembly. The removal of the duty was effective 30 June 2020.
On 2 July 2020, the National Treasury issued a statement indicating that the government never intended to remove excise duty on betting services and propose a reintroduction of the same within six months.
Last year, the government reintroduced excise duty on betting stakes to 7.5 % which means the government first takes Sh7.50 for every Sh100 a gambler places as a bet irrespective of winnings. It also takes 20 % on winnings and levies additional taxes on the betting firms in efforts meant to make gambling unattractive.
However, the higher taxes and strict rules have not discouraged investors in the betting space. BCLB chief executive Peter Mbugi said that the majority of the 24 new firms are owned by locals.
“Since the start of the year we are witnessing more companies owned by Kenyans interested in the betting industry,” Peter Mbugi.
They include Mofabet registered as Johannes Swift, Zukabet registered as Muvana Limited, Unibet, Hollywood Bets and Safe bet.
Online sports betting companies such as SportPesa grew rapidly before the drastic hike in taxes, riding a wave of enthusiasm for sports. The government says the gaming industry achieved a combined revenue of Sh204 billion in 2018.
That sparked concern about the social impact of betting, prompting new gambling regulations, including restrictions on advertising.