A report compiled by the Central Bank of Kenya in association with the Kenya National Bureau of Statistics late last year reveals a lot about the local betting industry. It shows a significant decline in the number of Kenyans using betting to pay their bills. According to the report, the main reason for the decline is the introduction of higher taxes on gaming and betting. This in turn has led to a 63 percent drop in gaming spending. 

As for the number of gamblers relying on betting to pay their bills, this number has dropped. It’s dropped from 22.7 percent (in 2019) to 11.2 percent. This represents a decline by more than half over the course of two years. 

Reducing Illegal Betting

The drop is directly linked to the 7.5 percent increase in betting taxes. The change came into effect on July 1, 2019. Also newly imposed had been a 20 percent levy on every winning bet. This would have contributed to the massive decline in a big way too. 

According to the report, the taxes were imposed by the government. It was a deliberate measure for counteracting a wave of irresponsible and illegal betting seen in the country. The idea had been to increase the public’s awareness regarding irresponsible betting. 

The levy on winning had been introduced specifically to discourage gaming and betting among underage persons. Younger individuals have been shown particularly problematic. They fund their gambling and betting by taking unsecured loans from banks, online financial institutions and lenders. This has led to several reports of suicide by young people who had lost all their money to illegal gambling. 

Many Changes – Little Progress

The excise tax on betting stakes was introduced as far back as 2019. July 2020’s amendment to Kenya’s Finance Act saw this form of tax removed. This was following big-scale opposition from betting firms. 

MPs, however, shortly after the removal, introduced taxes mandating betting companies in Kenya to withhold an Sh7.50 share of every Sh100 wagered. Companies had to transfer this portion to the Kenya Revenue Authority, regardless of whether the bettor loses or wins. 

But despite all the changes, the report clearly shows that up to 14 percent of Kenyans still rely on betting activities to pay their monthly bills. This means betting and gaming continue to be viewed as alternative sources of income. Especially for cash-strapped bettors in a country plagued by unemployment. 

Failing better job creation and education, while on the decline, is a trend that will likely continue indefinitely to at least some extent. 

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