National Assembly Sports Committee Push For Additional Taxes and Fees on Kenya’s Gambling Industry

As the newly introduced amendments to the Gaming Bill 2019 sweep seamlessly through Parliament, Kenya’s gambling industry could be heading into its toughest year yet.

Burdening the industry with additional taxes and fees is on the agenda of the National Assembly Sports Committee, who is pressing their implementation before the end of the current fiscal year in June 2020, according to local news outlets.

By the committee proposition…

… there should be an implementation of gaming levy at 1% on total revenue generated by sports betting operators.

Accordingly, companies that fail to pay such a fee could face penalties of up to KES200,000. The funds coming from fines and penalties would be used to finance the National Gaming Authority and its efforts to clamp down on unregulated operations.

Commenting on the newly proposed amendments, Committee chairman Victor Munyaka told that they will push for the bill to sail through to effect changes.

“It was a priority business before we broke for recess. We will fast-track it when the House resumes to effect the tax measures this financial year,” the lawmaker said.

Turbulent Times for Kenya’s Sports Betting Industry

News about the potential implementation of new gambling taxes and fees shook the gambling industry in Kenya, which was already standing on the glass legs. The situation was very tight after the Kenyan president invited lawmakers to a total ban on gambling back in August, but the new legislation was the breaking point for the major operators in the country.

The Kenyan gambling sector was deemed as “a hostile operating environment” by two sector’s leading operators – SportPesa and Betin – who have seized their operation in this country in October.

Along with a number of other Kenya-facing gambling companies…

… both operators were embroiled in a bitter dispute with country regulators and lawmakers over license renewal issues and the introduction of a 20% excise tax on all betting stakes placed by Kenyan bettors earlier this year.

SportPesa’s closing of the Kenyan operations resulted in 453 people losing their jobs. The effect on the overall annually gambling revenue aren’t familiar yet, but it’s estimated that this sector has suffered a huge financial hit.

Betting Advertising Industry Also Target of the Commission

To recall, regarding license fees for new operators…

… the committee has proposed a significant reduction. Operators will be required to pay license fees for all forms of online gambling in the amount of KES50 million. Totalizator licenses would be pegged at KES5 million, land-based casinos at KES10 million, prize competitions at KES10 million, and private lotteries at KES15 million.

On the other hand…

… already licensed operators will be facing higher license renewal fees:

• KES15 million annual renewal fee, instead of a KES30 million fee every three years
• Retail betting operators will be required to pay KES5 million every year
• Totalizators will have to pay a KES1 million fee
• Prize competition providers will be able to renew their licenses after paying a KES500,000 fee
• Casino licenses will be renewed at KES3 million annually

These conditions in the combination with 20% excise tax on all betting stakes were the reasons why SportPesa closed its operations in Kenya, with Betin following its footsteps.

The proposed amendments will also hit the betting advertising industry – media outlets will have to pay a 35% tax on revenue from betting adverts.

Also, the amendments aim to bar endorsement by people who pose as bet winners:

“A person shall not hold himself out by ment, promotion, notice or public placard with the aim of enticing of the public to participate in gaming.

A person shall not display any written or printed placard or notice relating to any form of game of chance in any shape or form that’s visible in a public street,” the report reads.

Other amendments include giving the National Gaming Authority the power to conduct security checks, vetting, and due diligence in relation to any gambling activities taking place on the territory of Kenya. It also suggests that the regulator will have the ability to handle complaints against gaming licensees, carry out investigations, and impose penalties.

Source:

“MPs seek tighter tax, media advert rules for betting firms”, the-star.co.ke, December 30, 2019.