The High Court of Kenya has lifted a stay order that previously suspended numerous gambling regulations, allowing most of them to be enforced again, though the increased licensing fees and capital requirements remain on hold.
This ruling follows a stay order issued in July by Justice William Musyoka, which came about after a legal challenge from Thomas Buckley Opar Owuor and Ken Brance against the Gambling Control (Licensing) Regulations 2026. This stay had effectively frozen the licensed gambling sector in Kenya, ensuring that the new regulations only affected authorized operators.
On Friday, the High Court partially lifted this order. The Kenyan government, along with the Gambling Regulatory Authority (GRA), argued that the comprehensive stay order had led to a "regulatory vacuum," allowing unlicensed firms to operate without regulatory oversight from the GRA.
The court’s decision enables the GRA to resume key regulatory tasks, such as processing license applications, conducting due diligence on operators, and implementing anti-money laundering and consumer protection measures.
Despite this partial lift, the primary legal challenge concerning the suspended provisions is still set to continue. Written submissions are expected by September 21, with a full judgment anticipated on October 2.
The elements that remain under suspension include the increased licensing fees and new capital requirements for licensees.
According to David Sarinke, a partner at McKay Advocates in Kenya, while there is notable scrutiny regarding the increased fees, the ruling allows the resumption of the licensing process. He noted that the court did not clarify which licensing fees would apply in the interim and expects the GRA to revert to the previous fees used before the new legislation was introduced.
"Obviously, the reasonable thing to do is go back to the previous fees," Sarinke said, highlighting anticipation that the regulator will soon provide guidance on which fees will be applicable as licensing applications reopen.
Conversely, Steve Kipruto David, founder of KDS Advocates, doubts that the government will revert to the old fee structure. He pointed to intentions for stricter compliance and a consolidation of larger operators as factors influencing potential fee adjustments.
"I doubt it," he stated. "I view these fees as exorbitant, but it’s now a big game, and the big game is for the big guys. I think it will not be reviewed downward."
Last year, Kenya aimed to modernize its gambling laws initiated in 1966, leading to the establishment of the GRA and a set of new regulations. A controversial aspect of these regulations included steep increases in licensing fees. Previously, iGaming operators paid just over Ksh10,000 ($77) for a license application and annual fees ranging from approximately Ksh400,000 to Ksh1 million. Now, the application fee for an online bookmaker license has skyrocketed to Ksh5 million, with the license fee set at Ksh50 million, valid for a three-year period instead of renewals each year.
The original request for a stay order indicated that licensing fees had surged by between 200% and 49,900%, alongside a new capital requirement of Ksh100 million imposed on online bookmakers and iGaming operators. This substantial increase in fees raised concerns from numerous operators about their ability to comply, prompting some to contemplate closing down and risking job losses and declining government tax revenues.
The legal case also contends that these elevated capital requirements may violate constitutional principles, as they exceed proposed amounts discussed in public consultations, which are mandated under Article 10 of Kenya’s 2010 Constitution regarding public participation.
Sarinke mentioned that the government had supplied comprehensive evidence demonstrating public engagement in developing the regulations. Kipruto, however, anticipates that the public participation argument will fail, emphasizing that the unconscionability of the fees is a more compelling point.
He suggests that operators should receive additional time to comply with the capital requirements, advocating for an extension of the compliance period to allow operators to secure necessary funds more comfortably.
"They must be given an extended period," he argued. "Rather than telling these operators that you need to comply by the end of this year, extend it and give them maybe even two years for them to comply."
