Kenya has made significant strides in regulating its gambling industry with the implementation of the Gambling Control Act, which was enacted last year. This act established the Gambling Regulatory Authority (GRA) and replaced outdated legislation from 1966, marking a new era for the sector. As of July 1, Kenya has commenced its inaugural licensing cycle under this new framework, following the introduction of five subsidiary regulations.
A notable change is the expedited process for reviewing license applications, which must be completed within 14 days, with final decisions rendered by the board within another 30 days. If an application is rejected, appeals must be filed with a tribunal within two weeks.
John Mutua, CEO of the Association of Gaming Operators Kenya (AGOK), regards the act's provisions as exceptionally beneficial, arguing that it lays essential foundations for an industry that has endured regulatory upheaval. "What we are seeing is a fundamental shift in how operators will do business in Kenya," Mutua explained. He emphasized that compliance will be crucial for survival in the long run, cautioning that those who operate outside the new regulations will struggle to maintain their businesses. "For years, we operated under a patchwork of ministerial directions and a Betting Control and Licensing Board that was, frankly, under-resourced for the market it was trying to regulate," he added.
Peter Kesitilwe, CEO of the African iGaming Alliance, concurs that the industry is finally moving towards a stable regulatory framework that it has long been missing. "The current framework appears more comprehensive and aligned than the previous approach," he stated, noting the introduction of detailed oversight structures, clearer appeal mechanisms, and stronger obligations for responsible gaming.
The new regulations also mandate strict advertising controls. All advertisements must be approved by the GRA and classified by the Kenya Film Classification Board. Additionally, ads must allocate 20% of their space to responsible gambling warnings and cannot feature celebrity endorsements or air on TV or radio from 6 a.m. to 10 p.m. unless during live sports events.
One requirement already set in the Gambling Control Act is that licensees must have a corporate entity with at least 30% of shares owned by Kenyan citizens. Mutua believes this change reflects a commitment to ensuring that businesses in Kenya's licensed gambling sector are transparently operated, discouraging “briefcase operations” that lack accountability. He emphasized that the regulatory body is keen on identifying key figures in licensed businesses, scrutinizing not only ownership but also critical staff involved.
The tax landscape surrounding gambling in Kenya has seen considerable unpredictability in recent years. However, as of July 2023, the government enacted a 5% tax on withdrawals from betting wallets, replacing a previous 20% tax on net winnings. Additionally, a 5% excise duty on deposits has replaced the former 15% rate.
Mutua describes this new tax regime as "well-designed", stating it is straightforward and easy to audit. He remarked that a transparent tax structure creates value, leading to a 29% increase in tax collection since the new framework's adoption. This system provides stability that benefits operators, players, and the government alike, allowing for better planning and investment.
The revamped tax laws have also drawn interest from international investors. Super Group CFO Alinda van Wyk noted that the simplified tax structure facilitates operations in Kenya again, a market that previously suffered from excessive taxes that drove legal operators away. "Now that Kenya has changed its tax laws, you see the negative impact unreasonable taxes have on the industry," van Wyk shared, asserting that the new tax framework not only aids operators and revenue authorities but also offers some protection to customers. "It gives us the ability to say, ‘Okay, now things are stabilised, we see a path to profitability and we will try Kenya again’. So it’s definitely on the roadmap," she concluded.
