How Kenya’s new gambling regulation is creating calm out of chaos

Last year, Kenya’s Gambling Control Act established a new Gambling Regulatory Authority (GRA) and brought in a raft of new regulations.

The act replaced the existing legislation from 1966, while the newly established GRA took on oversight of the sector from the Betting Control and Licensing Board.

Kenya recently launched its first licensing cycle under the new regime, after five subsidiary regulations came into effect on 1 July.

Included is a review of licence applications within 14 days of submission, with a final board decision required within 30 days. Appeals must also go to tribunal within 14 days of rejection.

John Mutua, CEO of the Association of Gaming Operators Kenya (AGOK), says the Gambling Control Act’s provisions are “far-reaching in the best sense”, finally giving the industry the structural foundations it has needed after years of regulatory turbulence.

“What we are seeing is a fundamental shift in how operators will do business in Kenya,” Mutua explains to iGB. “Those who comply will survive long term, and those who choose to operate outside the compliance scope will find it increasingly difficult to sustain their business.

“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.”

Peter Kesitilwe, CEO of trade body the African iGaming Alliance, agrees Kenya is finally transitioning towards the stable, long-term regulatory framework the sector has historically lacked.

“The current framework appears more comprehensive and aligned than the previous approach,” he says. “You’ll find that it introduces clear structures, [including] your oversight structures, your appeals mechanism, stronger responsible gaming obligation and clearer online provision.

“The key now is consistency. What markets struggle with is unpredictability.”

What do Kenya’s new gambling regulations entail?

Strict advertising controls have been introduced, with every ad having to be approved in writing by the GRA and classified by the Kenya Film Classification Board. Ads must also dedicate 20% of their space to responsible gambling warnings.

Additionally, ads must not include any celebrity endorsements or be broadcast on TV or radio between 06:00 and 22:00, except during live sports.

Already included in the existing Gambling Control Act was a requirement for licensees to have a corporate body in which a minimum of 30% of shares are held by Kenyan citizens.

Mutua suggests this demonstrates a deeper interest in how businesses in Kenya’s licensed gambling sector are capitalised, with increased scrutiny on those running operations and no more “briefcase operations [that] run opaquely”.

“That signals a deep-seated desire to ensure that tax obligations carry direct accountability from Kenyans who hold that local stake,” he says.

“The act wants to know who the key players are in every licensed entity. It answers the fit and proper persons question not just at ownership level but across key staff, which is critical in ensuring that proper checks are run on everyone involved in the business.”

The tax scenario

A key part of the regulatory uncertainty in Kenya has centred on the tax rates, which have been altered on several occasions .

But that has settled, at least for now, with the Kenyan government last July enacting a 5% tax on every withdrawal from a betting wallet, replacing the previous 20% levy on net winnings.

Also, the government brought in a 5% excise duty on deposits, replacing the previous rate of 15%.

Mutua believes this new tax regime is “well-designed”.

“It is accurate, verifiable and simple to implement,” Mutua declares. “Those are not small things. A tax structure that operators can comply with cleanly, and that the revenue authority can audit without ambiguity, has real value.

“That combination of simplicity and transparency is precisely what a good tax regime looks like – and the data bears i