Kenya Gambling Regulation

Gambling Regulation The Republic of Kenya sits on Africa’s east coast, bordering Somalia, Uganda, Ethiopia, South Sudan, and the Indian Ocean. Largely considered the third-biggest economy in the region, along with South Africa and Nigeria, the country’s gross domestic product was estimated at US$98.8 billion in 2020, with agriculture, horticulture, manufacturing, and exports being the main contributors to the local economy.

Gambling is popular and perfectly legal in Kenya. According to GeoPoll research conducted in 2019, 57% of adult Kenyans have placed a bet in the past, with gambling being particularly prevalent among men aged 25 to 34. Many locals prefer to bet via their smartphones, which is unsurprising given the greater mobile penetration Kenyans have experienced over the past several years.

Kenyan law allows for various forms of gambling, including casino gaming, bingo, and lotteries. Sports betting is also legal in Kenya, as can be expected from a country that is home to some of the keenest football fans in the world. Land-based betting activities became legal back in 1966. In 2019, the Kenyan legislature proposed a new bill that sought to revamp the country’s outdated legislation and introduce new online gambling regulations.

Land-based gambling activities in Kenya have been legal since the mid-1960s and are regulated by the Betting, Lotteries, and Gaming Act of 1966. This legislation also established the Betting Control and Licensing Board (BCLB), which oversees the sector and works to eliminate unauthorized gaming throughout the country.

Part II of the 1966 Gaming Act outlines the regulator’s structure and powers. The BCLB operates under the Kenyan Ministry of Interior and Coordination of National Government. Members serve terms of no more than three years and are appointed by the Minister of Interior. The Board meets at least once every three months and submits detailed reports to the Minister annually.

The agency is authorized to issue operating licenses to approved operators and to revoke or temporarily suspend them when violations occur. However, it cannot suspend a permit for more than 14 days. The BCLB is also responsible for investigating Kenyan players’ complaints against its licensees.

Licensing Requirements in Kenya

Surety and License Validity

Licensing Requirements in Kenya

All gambling businesses that wish to operate legally in Kenya must first obtain permits from the local regulator, the BCLB. The agency issues several types of licenses, depending on the gambling product offered. Operators can apply for pool betting, tote betting, bingo and lotteries, casino gambling, and gaming machine licenses.

If a land-based company wants to serve food and drinks on its premises, it must obtain a Food and Hygiene permit and a Health certificate. Fire inspection compliance certificates are also required for land-based businesses that operate in different Kenyan counties.

Bookmakers may not offer games of chance or alcoholic beverages on their premises, in line with Part III of the 1966 Betting, Lotteries, and Gaming Act. Those who violate these restrictions face imprisonment, monetary penalties, or both.

Surety and License Validity

Applicants must also provide certificates of incorporation, along with their contact information, to the BCLB. Application fees apply, but the exact amounts depend on the company’s size, the location of its premises, and its number of employees. Section 5 (2) of the Betting, Lotteries, and Gaming Act authorizes the Kenyan regulatory body to conduct investigations or request additional information before reviewing an application.

The BCLB must send county authorities copies of approved gambling companies’ applications before issuing any licenses. Approved applicants must deposit up to KES40,000 as surety. Each operator will receive a refund of the surety if the license is canceled or expires. The BCLB may adjust the surety amount based on the size of the gambling business.

Licenses granted by the Kenyan authorities are non-transferable, meaning a licensee cannot transfer their permit to any other party. Those who violate this condition face monetary sanctions of up to KES2,000 and imprisonment for a maximum of two months.

Under Section 9 of the 1966 Act, each license remains valid until the end of June of the year following its issuance. Both the Fire Inspection Compliance certificate and the Food Hygiene permit are valid for one year.

1Corporate Tax Rates in Kenya

Licensed gambling companies must meet their tax obligations, which include a 30% corporate tax for local operators and 37.5% for foreign entities operating in the Kenyan market. In addition, companies with employees must register for and contribute Pay As You Earn taxes as required by the Kenyan Income Tax Act. They must also remit Value Added Tax under the provisions of the Value Added Tax Act.

Gambling firms that provide taxable services or products worth KES 5 million or more in a calendar year should register for VAT remittance. They must also register all employees with the National Security Fund and the National Hospital Insurance Fund.

2GGR Tax Rates in Kenya

Kenyan bookmakers are subject to a 15% tax on their gross gaming revenue (GGR) as stipulated in Section 29A of the Betting, Lotteries, and Gaming Act. GGR represents an operator’s total turnover minus the amounts paid to patrons as winnings.

The GGR tax was previously 35%, but the government reduced it following outrage from local bookmakers. The current 15% tax must be paid to the Kenya Revenue Authority by the 20th of each calendar month. The same rate also applies to prize competitions, casinos, and lottery operators, as provided in Sections 44A and 55A of the 1966 BLG Act.

3Excise Duty and Withholding Taxes

Back in 2019, the Kenyan Finance Committee increased the excise tax on betting stakes from 10% to 20% in an effort to raise additional government revenue. A 20% withholding tax also applied to gamblers’ profits. With this tax in place, a winning wager of KES 1,000 would return only KES 800 to the bettor, while the operator withheld the remaining KES 200 and remitted it to the Kenya Revenue Authority.

The hike did not sit well with betting operators in the country. Two of Kenya’s largest bookmakers, Betin and Sportpesa, withdrew from the local market, which caused betting revenue to drop.

On a more positive note, President Uhuru Kenyatta gave his assent for the passage of the 2021 Finance Act on June 29, 2021, which revised the excise duty once again, reducing it from 20% to 7.5%. The changes took effect at the beginning of July 2021 and apply to prize competitions, gaming, betting, and lotteries (excluding charitable ones).

Online Gambling in Kenya

Online Gambling Remote gambling in Kenya is subject to the Betting, Lotteries and Gaming (Online Gaming) Regulations of 2019. Said regulations cover online and mobile lotteries, sports betting, casino gaming, and all other forms of remote gambling. Remote operators must provide the BCLB with a list of the games they intend to offer to Kenyan players and information about their gaming servers, including their location.

All foreign operators must set up and run in-house customer support centers within the country to assist local players and respond to their inquiries. The companies should also maintain a database containing information about all wagers placed by Kenyan customers and their corresponding outcomes. The processing of customers’ sensitive information must be conducted in alignment with the Data Protection Act of 2019. Operators can disclose customers’ sensitive information, but only on the condition that players have given their consent.

The 2019 Regulations also stipulate that remote operators must pay customers’ winnings within seven days of the win. Last but not least, the Regulations state that operating online or mobile gambling without a license, or with a suspended or revoked license, constitutes a criminal offense. Those found guilty of this contravention are liable for fines and/or incarceration of up to five years.

In May 2019, a new gaming bill was submitted to the country’s National Assembly and went through a first reading. If the bill passes as an act, it will establish a National Gaming Authority to replace the existing regulator, the BCLB. The new Gaming Authority would have the mandate to issue operating permits to gambling operators, including remote ones.

The bill also proposes new licensing fees for different gambling activities (KES 100 million for remote gambling operators), along with a 15% tax rate. It would also create a Gaming Appeals Tribunal whose primary purpose would be to assist in resolving disputes between licensees and Kenyan customers.

As is the case in most jurisdictions where gambling is legal, licensed Kenyan operators must run their businesses in alignment with various social responsibility requirements. For starters, all gambling companies must ensure that only individuals who are legally old enough to gamble have access to their services and products.

Of course, this applies to both terrestrial and remote gaming operators. Kenyans can legally gamble provided they have reached the age of majority (18 years old). Selling lottery tickets is legal only if the buyer is at least 16 years old. The only exceptions apply when an underage individual engages in gaming activities that take place in private dwellings under the supervision of parents or legal guardians.

The Kenyan gambling regulator has the mandate to grant permits for conducting public lotteries, where a minimum of 25% of the overall proceeds must go toward socially beneficial initiatives such as public welfare and distress relief. Many Kenya-licensed operators donate to charities or fund local sports clubs.

Gambling Advertising and AML Policies in Kenya

Gambling Advertising Since gambling is an activity that might lead to various social harms, advertising it in most countries is subject to severe restrictions, and Kenya is no exception. Brick-and-mortar gambling operators in the country must obtain advertising signage permits if they use signage measuring between 300 and 600 millimeters.

Gambling venues that meet this criterion must apply for advertising signage licenses, issued by the authorities of the Kenyan counties. The permits are valid for one year. County governments can cancel them in case of contravention of the licensing terms and conditions. Other than that, only BCLB licensees can legally advertise their products and services to Kenyan residents.

The license numbers should be clearly visible on the ads. All advertisements must promote responsible gambling and specify that the legal gambling age in the country is 18 years old. Betting activities cannot be glamorized or marketed as a quick means of earning money. Operators can advertise their products on television only between 9:00 pm and 6:00 am.

As for ads broadcast on radio, their number should not exceed four per hour, with the time restrictions coinciding with those for televised advertising. Kenyan law disallows gambling advertising immediately before and after religious, family, and children’s programs. In early September 2021, local lawmakers unveiled plans to impose an outright ban on gambling-related programs on television, but the measure has not yet been adopted.

All gambling businesses, land-based or remote, should operate in compliance with the Anti-Money Laundering Act of 2009. They should watch closely for all suspicious or unusual transactions and report them to the authorities.

In line with the guidelines provided by the Central Bank of Kenya, financial institutions must require their customers to present written statements explaining the reasons for all monetary transactions over USD 10,000. Should the customer provide false information or decline to file the written statement, the bank must immediately report the transaction as suspicious.

Conclusion

Conclusion Kenya is home to one of the fastest-growing gambling industries in Africa. Gambling in the country has been legal since the mid-1960s and has been monitored by the Betting Control and Licensing Board (BCLB) ever since. Kenyans undoubtedly enjoy gambling for recreation, with sports betting and online casinos topping the list of the most popular gambling activities in the country.

A bill outlining a new licensing and tax regime for online gambling operators recently went through its first reading in the National Assembly. If approved in the future, the bill will also lead to the creation of a new National Gaming Authority to replace the existing regulator, the BCLB.