Kenya Senate approves Gambling Control Bill, raising capital bar to KSh 100M to regulate online betting

Kenya is on the cusp of a significant transformation in its burgeoning gambling sector, as the Senate’s approval of the final version of the Gambling Control Bill paves the way for presidential assent. This landmark legislation introduces a stringent new minimum capital requirement of KSh 100 million (approximately US$770,000) for online betting operators, a dramatic increase from the previous KSh 250,000. This move is part of a comprehensive overhaul designed to weed out undercapitalized firms, enhance player protection, and bolster tax collection in an industry that has exploded in popularity but has also raised serious social concerns.

The new capital threshold, while substantial, represents a compromise from an earlier proposal of KSh 200 million, which a mediation committee deemed excessively high. This adjustment reflects a delicate balancing act by lawmakers: aiming to professionalize the sector without stifling legitimate operators entirely. The implementation and oversight of these new regulations will fall under the purview of the newly established Gambling Regulatory Authority (GRA), which is set to replace the long-standing Betting Control and Licensing Board (BCLB). This transition signifies a move towards a more modern, robust, and technologically capable regulatory framework for Kenya’s dynamic gambling landscape.

A New Dawn in Regulation: From BCLB to the Gambling Regulatory Authority

For decades, the Betting Control and Licensing Board (BCLB), established under the Betting, Lotteries and Gaming Act of 1966, served as Kenya’s primary gambling regulator. While it played a role in licensing and oversight, its framework was increasingly seen as outdated and ill-equipped to handle the rapid technological advancements and explosive growth of the online betting sector. Critics often pointed to the BCLB’s limited capacity to effectively monitor and enforce regulations, particularly concerning online platforms that operate across borders and leverage sophisticated digital tools.

The new Gambling Control Bill directly addresses these shortcomings by repealing the old Act and establishing the Gambling Regulatory Authority (GRA). The bill explicitly states: “The Authority shall be the successor of the Betting Control and Licensing Board… all the rights, duties, obligations, assets and liabilities of the Betting Control and Licensing Board existing at the commencement of this Act shall be automatically and fully transferred to the Authority.” This transition is not merely a change in name; it signifies a fundamental shift towards a more proactive and comprehensive regulatory approach.

The GRA’s mandate extends far beyond simple licensing. It is tasked with developing standards and norms for gambling activities, regulating and controlling all forms of gambling, developing and monitoring policies at both national and county levels, and establishing and maintaining a register of gambling machines and devices. Crucially, the GRA will also conduct security checks, vetting, and due diligence on gambling activities and personnel – a function previously handled by the National Intelligence Service (NIS) – streamlining the oversight process. This consolidation of powers under a single, modern authority is expected to enhance regulatory efficiency and effectiveness, moving Kenya closer to international best practices in gambling governance.

The KSh 100 Million Hurdle: Reshaping the Operator Landscape

The most immediate and impactful change introduced by the new bill is the KSh 100 million minimum capital requirement for online betting operators. This figure is a significant leap from the previous KSh 250,000, and even a reduction from an earlier KSh 200 million proposal. The rationale behind this substantial increase is multifaceted:

1. Weeding Out Undercapitalized Firms: The low entry barrier previously allowed numerous small, often poorly managed, betting firms to operate. This new requirement aims to filter out those lacking the financial stability to adequately protect player funds and meet their obligations. It’s a move to professionalize the industry by ensuring only robust entities can participate.
2. Protecting Player Funds: By mandating a higher capital base, the government intends to create a stronger financial buffer. Should a betting firm face insolvency or fail to pay out winnings, the increased capital provides a greater assurance that player deposits and legitimate winnings can be covered.
3. Bank Guarantee as a Safeguard: The KSh 100 million requirement will be secured through a bank guarantee. This is a critical mechanism. It means betting firms cannot simply declare they have the funds; they must secure backing from a reputable financial institution. This forces these firms to undergo rigorous due diligence by banks, which will scrutinize their balance sheets, business models, and operational integrity. In essence, the bank acts as an external auditor, providing an additional layer of scrutiny and accountability. If a firm defaults, the bank is contractually obligated to cover unpaid winnings and customer deposits, significantly reducing risk for consumers. This mechanism is designed to instill greater confidence in the sector and protect consumers from unscrupulous operators.

This higher capital requirement is expected to lead to market consolidation, as smaller operators may struggle to meet the new financial thresholds. While this could reduce the number of licensed firms, the government’s objective is to foster a more stable, transparent, and responsible gambling environment.

Plugging Leakages: Enhanced Surveillance and Taxation

Beyond capital requirements, the new bill introduces sophisticated mechanisms to tighten enforcement and plug leakages in tax collection, a perennial challenge for the Kenyan government.

A key innovation is the mandate for real-time surveillance of all betting activity through an integrated electronic monitoring system. This system will allow the GRA to track wagers, payouts, and player balances across all licensed platforms in real-time. This level of oversight is crucial for several reasons:

• Tax Compliance: It provides the Kenya Revenue Authority (KRA) with direct, immediate access to transactional data, making it far more difficult for betting firms to under-declare revenues or evade taxes. In the financial year 2023/2024, the KRA collected KSh 24.269 billion in excise duty and withholding tax from 111 onboarded gambling companies, a significant increase from KSh 19.2 billion in 2023. This new system is expected to further enhance these collections.
• Market Integrity: Real-time monitoring helps detect fraudulent activities, irregular betting patterns, and potential money laundering, thereby enhancing the overall integrity of the gambling market.
• Problem Gambling Identification: By tracking player behavior, the system can potentially identify individuals exhibiting signs of problem gambling, allowing for targeted interventions and support.

In terms of taxation, the bill reaffirms a 15% tax on gross gambling revenue (GGR). GGR is typically defined as the total amount of money wagered by players minus the winnings paid out. This tax rate is in line with or slightly higher than some other African markets. For instance, while some countries might have lower corporate tax rates, the combination of GGR tax, excise duty, and other levies aims to ensure the government receives a substantial share of the industry’s profits.

Additionally, a monthly levy of up to 1% of GGR will be introduced to fund addiction treatment, research, and public awareness campaigns. This dedicated fund is a critical step towards addressing the social costs associated with the rapid growth of gambling. It acknowledges that while the industry generates revenue, it also creates societal challenges that require specific resources to mitigate. This levy provides a sustainable funding mechanism for responsible gambling initiatives, moving beyond ad-hoc funding to a more structured approach.

It’s worth noting that the Finance Bill 2025 also introduced a change to the excise duty on betting stakes, slashing it from 15% to 5%. However, this tax will now be applied when money is transferred into a betting company’s wallet, rather than when a bet is placed. This change is designed to close loopholes exploited by offshore betting firms operating virtually in Kenya’s booming gambling market, ensuring compliance across both local and foreign platforms.

Curbing the Craze: Advertising, Compliance, and Player Protection

The new legislation takes a firm stance on curbing the pervasive influence of gambling advertising, which has often been criticized for luring vulnerable individuals, particularly youth, into betting. The bill introduces tighter restrictions on advertising, including:

• A ban on advertising between 6:00 am and 10:00 pm: This “watershed” period aims to protect children and young adults who are more likely to be exposed to media during these hours.
• Limits on celebrity endorsements: This seeks to reduce the aspirational appeal of gambling often associated with successful public figures.
• A requirement that 10% of all advertisements promote responsible gambling: This mandates that operators actively contribute to public awareness about the risks of problem gambling and encourage safer practices.

Violations of these advertising provisions carry severe penalties, with offenders liable upon conviction to a fine not exceeding KSh 20 million or imprisonment for a term not exceeding five years, or both. This demonstrates the government’s seriousness in enforcing these new rules.

Beyond advertising, operators will face significantly higher compliance burdens, including mandatory audited accounts, rigorous record-keeping, and comprehensive reporting. This increased scrutiny aims to ensure transparency and accountability across all licensed operations. Penalties for non-compliance are steep, including fines of up to KSh 5 million and prison terms of up to 15 years for repeat violations, signaling a zero-tolerance approach to regulatory breaches.

Crucially, the law also creates a self-exclusion framework, allowing individuals to voluntarily ban themselves from all licensed gambling platforms for a specified period. This empowers individuals struggling with addiction to take control of their gambling habits. Furthermore, the bill explicitly bars gambling on credit, preventing individuals from accumulating debt through betting, and unequivocally bans participation by minors, reinforcing existing laws with stricter enforcement mechanisms. These measures collectively represent a robust effort to promote responsible gambling and protect vulnerable populations.

Kenya’s Betting Boom: Socio-Economic Drivers and Challenges

Kenya’s journey to becoming a major gambling hub is a complex story intertwined with its socio-economic realities. The country ranks third among Sub-Saharan Africa’s leading betting markets, behind only South Africa and Nigeria. This rapid growth is largely fueled by high internet and mobile money penetration (especially M-Pesa), which has made online betting incredibly accessible, even in rural areas. A 2025 GeoPoll survey (reflecting data from 2024 and early 2025) indicated that 79% of Kenyans reported having placed bets, though this was a slight decrease from 82.8% in 2024, showing a shift in regional dynamics where South Africa now leads in participation. Another report indicated that the Kenyan gambling market is projected to reach a value of nearly $831 million in 2025, with nearly KSh 1 trillion (approximately US$7.7 billion) gambled in Kenya annually.

Football remains the undisputed king of betting choices, driven by the global popularity of leagues like the English Premier League and local competitions. However, the emergence of new, fast-paced digital games like “Aviator” has magnified concerns about addiction. Aviator is a “crash game” where players bet on an ascending multiplier, represented by an airplane taking off. Players must cash out before the airplane “flies away” (crashes), making it simple, intense, and highly addictive due to its rapid-fire nature and immediate gratification/loss. The psychological hooks of such games are potent, and their proliferation without adequate safeguards has been a major concern for public health advocates.

The explosion of betting as an alternative revenue stream in a country beleaguered by immense unemployment, particularly among the youth, has presented significant challenges. With a large youth population and limited formal employment opportunities, many young Kenyans turn to betting with the hope of quick riches, often viewing it as a shortcut to poverty eradication. This desperation can quickly spiral into addiction, leading to financial ruin, mental health issues, and even suicide, as documented in various studies on the social impact of gambling in Kenya. The original news content noted that the regulator remained “incapacitated to tame addiction,” highlighting a critical gap that the new bill aims to fill through dedicated funding for treatment and awareness campaigns, as well as the self-exclusion framework.

A Regional Perspective: Kenya in the African Gambling Landscape

Kenya’s new Gambling Control Bill positions it as one of the more progressive regulatory environments in Africa, aiming to strike a balance between industry growth and social responsibility. Comparing it to other major African markets reveals varying approaches:

• South Africa: Often considered the most established and mature gambling market in Africa, South Africa’s industry is regulated by the National Gambling Act of 2004. It permits licensed sports betting and land-based casinos but prohibits online casinos, though many South Africans access offshore sites. South Africa’s framework emphasizes responsible gambling measures and has a well-developed regulatory infrastructure. Kenya’s previous Betting, Lotteries and Gaming Act already mirrored some of South Africa’s rules, and the new bill further refines its approach.
• Nigeria: Africa’s largest economy and most populous nation, Nigeria is a massive market for gambling. However, its regulatory landscape is more fragmented, with both federal and state-level bodies (like the National Lottery Regulatory Commission and the Lagos State Lotteries and Gaming Authority). While mobile penetration is high and demand for betting is immense, illegal betting platforms and tax evasion remain significant issues. Nigeria has also seen its own challenges with price hikes and consumer protection, as evidenced by the legal action against MultiChoice. Kenya’s integrated monitoring system and stricter capital requirements could serve as a model for Nigeria in addressing its own regulatory gaps.
• Ghana: Known for having one of the most structured gambling industries in Africa, with regulations dating back to the 1960s. The Gaming Commission of Ghana was established in 2006 under the Gaming Act, Act 721. Ghana’s clear legal framework and diverse betting options have contributed to a thriving sector despite its smaller population.

Across the continent, common trends include the dominance of mobile-first betting, the surging popularity of sports betting (especially football), and the growing challenge of regulating new digital games and offshore operators. The African gambling market is projected to grow at a Compound Annual Growth Rate (CAGR) of 5.81% until 2029, making regulatory evolution across these nations crucial.

Looking Ahead: Balancing Revenue and Responsibility

The passage of Kenya’s Gambling Control Bill marks a critical juncture. It represents a determined effort by the government to bring order to a rapidly expanding, yet often chaotic, industry. The increased capital requirements, robust surveillance mechanisms, stricter advertising rules, and dedicated funding for addiction treatment collectively signal a shift towards a more responsible and sustainable gambling ecosystem.

The success of this legislation will depend heavily on its effective implementation and enforcement by the new Gambling Regulatory Authority. While the bill aims to generate more consistent tax revenue for the government and protect vulnerable citizens, it will also undoubtedly present challenges for existing operators, particularly smaller ones. The market will likely see consolidation, with larger, more financially stable firms dominating.

Ultimately, Kenya’s new gambling law reflects a broader global trend: governments grappling with how to harness the economic benefits of a booming industry while mitigating its significant social costs. By setting a higher bar for entry, demanding greater transparency, and investing in social safeguards, Kenya is attempting to chart a course that balances revenue generation with the imperative of public welfare. The world will be watching to see if this ambitious legislative overhaul can indeed tame the betting craze and foster a healthier, more responsible gambling environment for its citizens.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

28th July, 2025