Punters in Kenya have experienced a significant drop in their winnings despite an increase in the amount of money staked on bets and games. Data from the Kenya Revenue Authority (KRA) reveals that the total payouts to gamblers between July 2024 and March 2025 decreased by 14.87 percent, falling from Sh28.27 billion ($218.8 million) to Sh24.07 billion ($186.3 million). This dip in winnings comes amidst what appears to be shrinking odds offered by bookmakers, likely influenced by taxation measures.
Impact of withholding tax on payouts
The KRA data on withheld taxes remitted by betting and gaming firms provides a clear picture of the reduced payouts. These taxes, which are equivalent to a 20 percent withholding tax on winnings, dropped to Sh4.81 billion in the nine months ended March 2025, down from Sh5.65 billion in the same period the previous year.
Analysis of the data indicates that monthly withholding taxes on winnings saw a year-on-year decline in seven out of the nine months under review since July 2024. The only exceptions were December, which recorded an 18 percent growth, and March, with a 2.0 percent increase.
This trend contrasts sharply with the excise duty collected from the amount staked by punters, which remained in growth territory throughout the review period.
Rising stakes and increasing excise duty
Despite the decrease in payouts, the amount staked by punters in the betting and gambling industry continued to climb. Calculations based on monthly duty remitted to the KRA show that the amount wagered increased by 17.04 percent, rising from Sh64.23 billion ($497 million) a year ago to nearly Sh75.18 billion ($582 million).
The excise duty on the amount wagered also saw an increase. It was 12.5 percent until last December before being raised to 15 percent following the enforcement of the Tax Laws (Amendment) Act, 2024. Consequently, betting and gaming firms handed over Sh9.98 billion to the KRA in the nine months as excise duty, a 24.45 percent jump over the Sh8.03 billion collected in the previous year.
The enduring appeal of betting
The popularity of betting has continued to rise, particularly among young people, both employed and jobless. Many see it as offering a game-like thrill and an opportunity to make quick money despite the heavy taxes imposed on both betting stakes and winning bets.
Punters have increased their spending on betting in the hope of striking wins to cover daily expenses or improve their economic situations, seemingly defying the heavy taxation. Some individuals even fund their betting habits through digital loans, while the growing number of jobless youths have turned to betting in the hope of financial returns. A high rate of unemployment and increased cost of living have been key drivers of the betting craze over the years.
While a few punters do get lucky and win large sums, the activity generally represents missed opportunities and losses for participants as a whole.
Daily bets and winnings
The KRA data provides insight into the daily activity within the betting sector. Between July 2024 and March 2025, Kenyans placed an average of Sh274.37 million ($2.12 million) in bets daily while winning an average of Sh87.83 million ($697,726.4).
The issue of significant losses suffered in betting sessions has raised concerns, with some youthful punters being on the receiving end. This attracted the attention of key state agencies, including Parliament, the Interior Ministry, and the Betting Control and Licensing Board (BCLB).
Regulatory measures and concerns
In response to these concerns, the BCLB recently suspended advertisements on betting, gaming, and lottery activities on all media platforms for 30 days. This move will allow further streamlining of the rules governing the industry, including scrutiny by the .
BCLB board chair Jane Mwikali stated that the suspension followed growing suspicions that some firms were increasingly misrepresenting gambling as a legitimate investment opportunity and a shortcut to wealth creation. The erroneous depiction occasions adverse socioeconomic consequences, with devastating effects on individuals, families, and the broader community. Of particular concern is the rampant airing of gambling advertisements during the watershed period (5:00 am to 10:00 pm), Dr Mwikali wrote in a press statement.
Taxes on gross gaming revenue
In addition to the 15 percent excise duty on bets and the 20 percent withholding tax on winnings by punters, the KRA also levies a betting and gambling tax at a rate of 15 percent of gross gaming revenue. This revenue is calculated as turnover less the amount paid out on successful wagers.
KRA data shows that taxes on gross revenue generated by betting and gaming firms amounted to Sh4.81 billion ($37.2 million) in the nine-month period ended March, an increase from Sh3.39 billion ($26.2 million) the previous year. This indicates that betting firms generated Sh32.09 billion ($248.3 million) in gross revenue during the review period, a 41.89 percent jump from Sh22.61 billion ($175 million).
Defying crackdowns and projecting future tax collections
The rise of betting has occurred despite heavy crackdowns on existing gaming firms and stiff taxation year after year. In 2019, for instance, the Interior Ministry, then under Cabinet Secretary Fred Matiangi, clamped down on gaming firms over allegations of criminal activity, including money laundering and tax evasion, in a battle that nearly wiped out the sector.
However, projections for the current financial year suggest a potential slowdown in the betting craze. Taxes from the betting sector are projected to dip by Sh4.2 billion ($32.5 million). The BCLB projects that the government will raise Sh20 billion ($155 million) in gaming taxes, excise duty on betting stakes, withholding tax on winning bets, and taxes on the firms. This will be a drop from the Sh24.2 billion ($187.3 million) raised in the year ended June 2024, underlining a potential shift in the trajectory of the betting industrys contribution to tax revenue.
