When it comes to the gambling and gaming
industry, Africa should be the next big area to focus on. This is due to its
huge population (over 1.2 billion people), the high rate of internet and
smartphone penetration. Kenya, alongside South Africa, Nigeria and Ghana are
some of the countries where the gambling industry has really expanded in the
last couple of years.
In particular, the gambling industry has been
booming in Kenya in the last couple of years. The success of the gambling
industry in Kenya is greatly due to the hugely successful mobile money industry
in Kenya. Virtually, every adult in Kenya has a mobile money account. In fact,
MPESA, the leading mobile money platform in the country, is the dominant medium
of financial transactions in Kenya. This, coupled with the high rate of
internet and smartphone, has led to the success of sports betting and online
casinos and, to a lesser extent, land-based casinos. In fact, the growth in
sports betting and online casinos has been unbelievable since 2014.
There have been concerns, however, about the
implications of the rising gambling culture in the country and lack of clear-cut
regulations in terms of taxation. According to a survey by Geopoll, Kenya has the highest number of youths
involved in gambling and gaming activities. There have been recent developments
and proposed changes relating to the control of gambling and gaming industry in
the country that industry players need to keep track on, to ensure compliance
or be ready for adjustments if necessary.
When it comes to gambling and gaming
regulations in Africa, Kenya is at the forefront compared to other countries;
its regulation framework is more organised. Gambling and gaming laws are
outlined in the Betting Lotteries and Gaming Acts of 1966. The Act puts the
Betting Control and Licensing Board (BCLB) in charge of all administrative
duties of gaming and gambling activities both at the national and county
government level. This includes 11 bingo halls, 30 casinos, one horse racing
track event and 3 Sportsbooks. The BCLB is placed, in turn, under the Ministry
of Interior and Coordination of National Government.
The global gambling and gaming activities are
on the rise, and newer and more sophisticated forms of gambling are blooming.
This has raised concerns over the legal framework of gaming and gambling in
Kenya. The Betting Lotteries and Gaming Acts of 1966 has all been caught up,
and there is a need for its review.
Applying for a gaming licence in Kenya, the
applicant is required to get in touch with the Betting Control and Licensing
Board (BCLB) and fill a special form referred to as Form 13A. Upon completion,
an application fee is paid to the board to carry out an evaluation to determine
the suitability of the applicant.
After realising the huge potential in the
online gambling industry in terms of the revenues collected, the Kenyan
government decided to impose greater taxes on players and operators alike.
Corporate tax for betting companies was increased from 20% to 35%. There were a
lot of backlash from operators. SportPesa, arguably the largest sports betting
operator in Kenya, withdrew its sponsorship for the national football team in
retaliation. On their part, players were to part with 20% of their winnings.
This regulation was, however, halted by the high court in April 2019.
All in all, the overall handling of online
gambling and land-based casinos in Kenya has been great. This year, 2019, the
government invited all stakeholders to a meeting and several things were
proposed as outlined below.
The stakeholders meeting was held on 1st April
2019. The Cabinet Secretary to the Ministry of Interior and Coordination of
National Government outlined several proposed measures and changes to the
regulatory framework of the betting industry in the country. During the
meeting, the Cabinet Secretary expressed the need for a total overhaul of the regulatory
framework of the betting industry since it is inadequate. Among his major
concern was the need to protect youths and the poor who are predominantly
involved in gambling activities in Kenya. He insisted that online gambling and
gaming has become a crisis.
The ministry announced the following proposed
measures and changes:
The Ministry intends to come up with a gambling and
gaming policy together with a Bill that will be presented to the National
Assembly for consideration regarding new statutory regulation of betting
activities upon completion of consultation among industry stakeholders.
The Cabinet Secretary announced that all gaming
licences would stand suspended as from 1st July 2019 apart from those who will
have complied with the law and their tax obligations as will be determined by
the BCLB. The Cabinet Secretary expressed his concerns over low tax received
from the sector compared to the huge revenue generated.
The Cabinet Secretary issued directions to the
Communications Authority of Kenya and BCLB to ensure that advertisements are
not repugnant to good taste or deceptive. He ordered the two bodies to review
all advertisements relating to gaming and gambling activities in Kenya.
The Cabinet Secretary also ordered the Immigration
department jointly with BCLB to document all agencies involved in gambling
activities and vet all the foreign nationals involved in gaming and gambling
The ministry announced that there would be another
meeting later between the relevant government agencies, including The National
Treasury and Communications Authority, and other industry players to collect
their views on the running and operations in the gaming industry.
The cabinet Secretary reiterated the ministry’s
resolve to have clean, organised and reformed gambling and gaming industry in
Among his commitment, the Cabinet Secretary
promised an overhaul of the regulatory framework of the gambling and gaming
sector. Operators and other industry players can expect significant regulatory
and administrative changes in the gaming sector. They, therefore, need to keep
track of any change and ensure compliance.
It would also be very vital for industry
players to take part in the sectoral consultations between the government
agencies and stakeholders. Their input in the proposed legal, regulatory review
process is important. It will also help them anticipate and prepare adequately
for the expected changes.