The ability to make online payments has changed the trajectory of online gambling, significantly enlarging the potential customer base. Mobile money platforms such as M-Pesa are big businesses in Kenya. Vendors taking deposits uploaded to a mobile phone are then transferred to make payments are found on almost every street.

SiGMA News series on iGaming in the African continent examines how the iGaming industry is evolving in Kenya.

High volume, low value bets

Most Kenyan gamblers are aged between 18-25 and are either students or come from low-income backgrounds. Research suggests that this group sees online gambling as a way to supplement their income while having fun. Consequently, operators tend to focus on high-volume, high-frequency, and low-value bets.

Online-only segments are still in their infancy, with slots accounting for only a third of online casino profits. Still, more and more young adults find such games’ low risk and simplicity attractive.

The government tolerates the online segment, and the operators licensed in other jurisdictions can freely operate in the country. But legislators were planning to change that by drafting a Bill in 2019 to license online gaming and limit overseas operators, regulate advertising, and impose taxes. It is unknown if the bill in its present form will be passed as Kenyan law already permits activities like betting, lottery, casino games, and slots and does not distinguish between games of skill or chance.

In 2018 taxes for gross gaming revenue were reduced to 15 percent, down from an eye-watering 35 percent. But a proposed 20 percent on winnings and a suggestion that this tax extended to stakes led to SportPesa and others threatening to leave. Eventually, the tax change was stopped, but the government stated the tax rules were still under review, but nothing has been heard since the tax was first muted in 2020. Currently, winnings are taxed at a rate of 15 percent and the same amount is charged against betting revenue.

Related articles:

iGaming in Kenya Part 1: Kenya leads the region in iGaming adoption

iGaming in Ghana Part 1: New iGaming frontier in Ghana

iGaming in Ghana Part 2: Upside of iGaming in Ghana