Two years ago it was reported that many gamblers in Kenya were using bets as a way to make a living. Of all participating in gambling, stats showed that 22.7 percent were relying on bets to pay bills. This changed when the Central Bank Of Kenya introduced a new tax. According to the Kenya National Bureau of Statistics, the number has now gone down to 11.2 percent. This represents a 63 percent drop. Looking at it another way, the average money used to place bets has gone from Sh2,559 to Sh939.
The state became aware of the increase in problem gambling, and so steps were taken to get the situation under control. On July 1st, new taxes were introduced. This included a 7.5 percent tax on every bet, as well as a 20 percent levy on every win. The impact of the taxes has been instant.
However, according to a government spokesperson, curbing the gambling problem has been complicated.
The spokesperson explained that the government’s efforts have been deliberate. Numerous measures were taken to not only combat illegal gambling but also to raise awareness. The taxes were introduced specifically to discourage youth gambling.
Sports betting in particular has found popularity with Kenyan youth. Worse still is that youths have reportedly been taking loans in order to fund their gambling habits. Some reports have even suggested that youths committed suicide after losing money.
Getting the taxes implemented has been a bumpy road. Although the levies had been introduced in 2019, they were later dropped in 2020. This followed aggressive lobbying by disgruntled betting firms. The taxes were introduced from July 1st, 2021. Sh7.50 out of every Sh100 bet must now be transferred to the Kenyan Revenue Authority.
A Difficult Economy
As it stands betting companies pay 15 percent on gross gaming revenue (GGR.) This is in addition to a 30 percent corporate tax on profits. If the levies will again be contested by the operators remains to be seen.
But there is more to this dilemma than meets the eye. As the Kenyan economy struggles, many turn to online betting in Kenya because they have few options. Unemployed locals, therefore, see betting as an alternative form of income. The danger is that this gambling craze is often fuelled by debt.
Although the situation still being ongoing, hopes are that problem gambling will be further brought under control.