A few weeks back, the Kenyan government decided to take charge in the ongoing online sports betting battle by implementing a 20% tax on all betting stakes. This lead to the exit of the two main betting companies, SportPesa and Betin. But it also made a big chunk of the market up for grabs for foreign operators, who will look to strike while the iron is hot.
The question of online sports betting has long been a dividing issue in Kenya. On one hand, there are advocates who claim that online betting is beneficial for the state, as it generates both a tax income, sponsorships for national events, and jobs for Kenyans (SportPesa and Betin are estimated to have laid off 2500 employees as they left the Kenyan market). On the other hand, there are those who claim sports betting is a bad influence on the population due to gambling addiction.
The growing ease of mobile betting is also a worry, as it makes it harder to keep online betting away from children, who are more prone to be affected negatively from it.
Whether the new law with higher taxation is a way to force the hands of operators and purposely push them away, or if it is what the Kenyan government thinks is a reasonable level is hard to say. However, it has made the market a lot more restricted. A statement from SportPesa claimed that the tax is based on a fundamental misunderstanding of the betting industry, as reported by Goal.com.
However, this uproar has created an opening for foreign operators, who are not shy to claim the market shares left by Betin and SportPesa.
When it comes to the growth of African betting, Kenya is at the forefront, and has therefore attracted a large interest from abroad. There are several international betting sites that are active in Kenya, and they welcome Kenyan players with open arms. Among them are well-known brands such as Bet365 and Betway, but also the underdog 22Bet who separates themselves by offering deposits with Airtel and M-Pesa.
Where this story will end is still unknown, but as domestic laws make it more difficult for homegrown operators, the Kenyan government will have to count on foreign operators to claim more and more of the real estate in the online betting market.