In 2021, Kenya experienced the start of a massive renewed clampdown on betting and gambling.
However, despite the government’s push to clamp down on all forms of betting by enforcing sky-high tax rates on operators and bettors alike, the national betting industry continues to grow.
A recent report released by the country’s Betting and Licencing Control Board (BCLB), confirms that betting firms have now increased from 76 to 100. This means there are now 24 more betting firms operating in the country compared to the beginning of the second half of 2021.
The increase marks a growth of 31.5%, which is, of course, fantastic news for Kenya’s local betting and gambling scene.
Betting, it seems, is able to withstand even the highest of tax margins, which is good news for the local economy, bettors, and also local and international investors.
Betting Boom Created Concern
The Kenyan government created a new wave of concern for the market when it increased the excise duty rate to 7.5% last year.
When looking at the division of taxes, this means Kenyan revenue authorities collect Sh7.50 per Sh100 spent by a bettor. Additionally, it makes no difference to the rate imposed whether or not bets are won.
What’s more, the Kenyan government also collects an additional 20% of all winnings. That includes additional taxes and levies collected from the betting firms themselves.
The betting firms that entered the market over the course of the past year are all owned by Kenyan nationals, confirmed Peter Mbugi, who is the CEO of the BCLC.
Local betting firms that newly entered the market include Hollywood Bets, Mofabet (Johannes Swift), Safe Bet, Unibet, and Zukabet (Muvana Limited). This uptick in the number of betting firms operating in the country has led to revenue income to the tune of Sh204 billion.
Ironically, it’s precisely this increase in revenue that is at the root of the government’s concern over the social and economic impact on individual bettors. Not only have higher tax rates been rolled out, but the government has also announced stricter regulations for betting-related marketing and advertising.
Young Bettors at Biggest Risk
Another cause for concern, at least from the government’s point of view, is that betting has become an increasingly more popular activity among younger Kenyans – both employed and unemployed, with many regarding it as a way of supplementing or even creating income.
What’s more, bettors appear much more willing to part with larger bets than what had previously been the case. During the six months leading up to the end of September 2021, bettors bet a whopping Sh83.2 billion at Safaricom’s M-Pesa.
According to a report released by the operator, it’s currently experiencing an increase in bets of up to 69% every year.
M-Pesa Shines Light on Sector
What the report by Safaricom regarding M-Pesa’s annual take clearly indicates, is that betting is now Kenya’s second-largest form of revenue spending and income. The first is consumer-to-business transactions.
It is clear to see that betting on sports is now the second-largest line of revenue, trailing only consumer-to-business.
Since betting firms aren’t required by law to make their financial records private, as is the case with all private entities operating in Kenya, the real-time information is typically revealed only during court cases.
An interesting legal scuttle in this regard took place between the Kenya Revenue Agency and Pevans East Africa. According to the court’s records, Pevans in 2018 accepted bets to the tune of a gigantic Sh149.7.
Kenya clearly remains a lucrative region for betting firms indeed.