2018 proved to be a hugely momentous year for Kenyan casino operators, with the country’s president passing a bill that saw the tax they paid on gross gambling revenue slashed from 35 percent to a much more lucrative 15 percent. 

Despite facing significant opposition from his government, President Uhuru Kenyatta’s decision has already attracted promises of significant investment from figures like Victor Chandler, who intend to open new online enterprises in response to the falling tax rate, amongst other factors.  

A celebration for casino owners and operators 

In September 2018, after notable clap back from his cabinet and the country’s politicians, President Uhuru Kenyatta announced that he’d affixed his signature to a new and improved Finance Bill – one which saw Kenyan betting operators popping champagne corks country-wide. 

The bill delivered a significant reduction in the recently hiked betting taxes, helping to reduce casino industry overheads, at the same time as increasing providers’ profits. 

The move came on the back of a parliamentary session that local media sources described as “chaotic”, and introduced some marked changes to the nation’s governance, most pertinently – in this instance – via a significant reduction of the tax rate paid by betting operators. 

This saw the gambling tax reduced from an excruciating 35 percent, to a far more easily swallowed 15 percent. At the same time, a 20 percent tax was imposed on bettors’ winnings.  

The government claimed this new and improved split tax regime would generate an impressive $295 million per year for the country’s coffers, yet there were many who disagreed with its introduction. 

Opposition MPs, in particular, were vocal in their condemnation, with many an insult hurled at National Assembly Majority leader Aden Duale, a key figure behind, and supporter of, the proposed gambling tax reduction. 

The introduction of indirect taxes

Although this move has already done much to impress online operators, like those featured on directory sites such as Oddschecker, which share the best free bets and sign up offers with those who wish to play, it has not removed the burden of payment entirely. 

Rather, it has spread the distribution of taxation, shifting it onto winners too, as we mentioned above, and also levying capital in the form of new indirect taxes, which will primarily affect online betting operators.  

These include, for example, a 15 percent tax on internet and data services, and a 20 percent tax on the fees banks charge for money transfers. 

Despite this, operators seem to uniformly approve of this alternative legislation, with the online casino industry expected to expand quickly within the country, and a number of investors outlining plans to set up there.  

A response to unfair taxation

Given the significant opposition it faced, you might be wondering why President Kenyatta was so eager to pass his controversial Finance Bill 2018. The answer lies in an earlier government decision to hike all gambling taxes to a uniform 35 percent rate – a nearly five-fold increase for betting operators. 

This vastly unpopular move led to many gaming companies being forced to close their Kenyan operations, on the grounds that they were no longer economically viable once this additional 35 percent was added to the 30 percent corporation income tax they already paid.  

Nonetheless, all previous attempts to remedy the situation had been rejected by legislators, with President Kenyatta finally resorting to drastic measures: a complete refusal to sign the Finance Bill until a newly reduced 15 percent betting tax was added to it. 

The tax on punters’ winnings was also reintroduced, having earlier been scrapped due to concerns over the impossibility of its implementation on technical grounds. 

A brighter future for the betting industry 

The move on the part of President Kenyatta appears to have been a resounding success, not only in helping to once again make casino-based businesses a viable economic proposition, but also in attracting new interest and investment from international sources.

One of the most notable of these is Victor Chandler, an investor who has already expanded his online operations into 160 different countries. With such figures now displaying a newfound willingness to set up shop in Kenya, the future of the country’s casino industry seems to finally be assured.