On Thursday, Kenya Parliament approved an amendment to the Finance Bill 2025, reducing the excise duty on bets from 15% to 5%. This change comes just months after the duty was raised from 12.5%, potentially incentivizing more betting activity.
During the third reading of the tax bill, lawmakers also amended the payment process for excise duty in the betting sector. The point of taxation has shifted from the moment a bet is placed to when funds are transferred from mobile money wallets to betting accounts. This change aims to enhance tax enforcement, particularly against foreign or virtual betting operators that were hard to monitor under the previous system.
The new framework allows the government to collect excise duty before funds enter platforms that often operate beyond local regulatory reach, leveraging Kenya’s tightly regulated mobile money infrastructure.
MP Kimani Kuria, chairman of the Finance Committee, explained, “The current taxation regime charges excise duty when you place a bet. Now, every time a Kenyan transfers money from their mobile wallet to a betting company’s wallet, that’s when the excise duty will be paid.”
Kenya Additional Tax Requirements
In addition to the excise duty on stakes, betting companies are required to withhold winnings at a rate of 20% and pay 15% of gross gaming turnover, minus the amount paid out as winnings.
This amendment aligns with the overarching theme of this year’s Finance Bill, which focuses on increasing revenue by closing loopholes in tax collection rather than introducing new taxes. Even sectors like alcohol, tobacco, and betting, typically seen as easy targets for taxation, have been spared from new tax increases.
The Kenya Revenue Authority (KRA) has integrated its systems with 36 betting firms to enable real-time transaction monitoring, helping to curb tax evasion and boost compliance. This digital oversight marks a strategic shift in tightening revenue controls over a sector often criticized for its 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 by 15% to KSh 4.81 billion, a decline attributed to tighter odds and lower payouts. This indicates a trend where more money is being staked, but less is being won.
Public Scrutiny and Regulation
Betting has come under intense public scrutiny for its impact on livelihoods and the rise of addiction. Calls for stricter regulation have led the Betting Control and Licensing Board (BCLB) to review gambling advertisements and restrict influencer marketing. While higher taxes are intended to limit the lucrative nature of betting, the reduction of excise duty raises questions about the government’s commitment to regulation.
Kenya ranks as the third most active betting market in Sub-Saharan Africa, following South Africa and Uganda, according to a 2025 survey. The betting industry continues to expand rapidly, with the total amount staked rising 17.04% to KSh 75.18 billion in the nine months leading up to March 2025.
