Kenyan bettors have something to smile about following the passage of the Finance Act 2025. This introduces significant changes to the taxation of betting. A key highlight is the reduction of excise duty on bets from 15% to 5%, offering significant relief to everyday punters who had been grappling with heavy tax deductions on every stake.
Under the previous system, gamblers lost Ksh 15 for every Ksh 100 they wagered. This is due to excise deductions at the point of placing a sports bet. This new approach not only reduces the rate but also shifts the tax collection point from betting to wallet transfers. Now, the 5% excise duty is triggered when funds are transferred from mobile wallets such as M-Pesa to betting accounts. A change that betting firms like Maybets have already implemented.
Why the Shift in 5% Excise Duty Tax Timing?
The change aims to enhance tax enforcement, particularly for offshore and virtual betting firms that previously evaded detection. According to National Assembly Finance Committee Chair Kimani Kuria, collecting tax at the wallet transfer stage closes a significant loophole used by international operators.
“Excise duty will now be collected the moment money moves from a punter’s mobile wallet to a betting account,” said Kuria. “This makes it harder for foreign-based platforms to avoid taxation.”
This means that all players, whether betting locally or on international sites, will contribute equally to the tax pool. This is once they have funded their accounts.
Operators Also Face Stricter Tax Compliance
In addition to the changes affecting punters, betting operators are under tighter obligations:
- Withhold 20% of player winnings and remit it directly to the Kenya Revenue Authority (KRA).
- Required to pay 15% on their gross gaming revenue (GGR), defined as total turnover minus payouts.
This structure aims to improve KRA’s revenue intake without introducing new taxes. It also ensures that both players and companies carry part of the tax burden, balancing fairness with fiscal responsibility.
Betting Activity on the Rise, But Winnings Shrink
Despite the tighter tax oversight, betting activity in Kenya continues to grow. Recent data shows a 17% increase in the total staked amount, which reached Ksh 75.18 billion in just nine months. However, the amount withheld from winnings dropped by 15% to Ksh 4.81 billion. Thus, suggesting that while more money is being staked, returns to players are shrinking, possibly due to tighter odds or reduced payouts.
To enhance transparency, KRA has integrated its system with 36 licensed betting operators, allowing for real-time monitoring of deposits, withdrawals, and winnings. This digital tracking marks a significant leap in tax enforcement, minimizing the risk of revenue leakage.
The Rise of Betting Ads Sparks Concern
While the betting market grows, so do concerns about its social impact. The Betting Control and Licensing Board (BCLB) has flagged an alarming increase in gambling-related advertising, despite existing restrictions in place. According to BCLB Chairperson Jane Mwikali, many firms are now marketing betting as a fast track to wealth, which misleads consumers and downplays the risks of addiction.
“This kind of messaging fuels unrealistic expectations and creates serious social consequences,” said Mwikali. “It affects individuals, families, and the wider community.”
The BCLB has promised tighter enforcement of advertising rules, including bans on influencer marketing and stricter guidelines for promoting betting online.
Betting Licences Nearly Double in Three Years
The number of licensed betting firms in Kenya has surged from 118 in 2021 to over 200 by mid-2024, cementing the country’s status as a regional betting powerhouse. According to GeoPoll’s 2025 survey, Kenya trails only South Africa and Uganda in Sub-Saharan Africa’s gambling rankings.
However, this rapid expansion hasn’t come without controversy. Critics argue that while the government has eased tax burdens, it has yet to match that with adequate regulation to curb gambling addiction and protect vulnerable groups.
Final Word on 5% Excise Duty Tax
Kenya’s new 5% excise duty on both deposits and withdrawals represents a strategic pivot toward smarter, tech-enabled tax enforcement. With the shift in timing and reduction in rate, punters benefit from more transparent and fairer deductions. This is while the government broadens its reach in a booming sector.
But as betting activity intensifies, the need for responsible oversight, advertising restrictions, and social protections has never been more urgent.
