The business daily is reporting that Kenyan betting figures hit KES 88.5 billion in the year ending June 2023. This happened despite harsh economic conditions that have often fueled protests and strict laws meant to curb the betting tax. The figure was derived from KES 6.6 billion excise tax paid to the Kenya Revenue Authority (KRA) by betting operators. The tax represents 7.5% of the amount wagered by punters.
For context, this figure is just slightly lower than the trade volume at the Nairobi Stock Exchange (NSE) which totalled KES 94.2 billion in the same period. The money staked can support the annual budget of up to four key government departments. Pause for a second to think about that.
Play! In that one second you paused, Kenyans staked KES 2,806 online! The average minimum wage in Kenya is KES 504 (15,120 pm) according to Trading Economics. However, some people earn as little as KES 300 per day, especially in rural areas. Despite that, Kenyans’ betting stakes are enough to pay football star Neymar’s daily wages four-fold! Al-Ittihad’s Neymar is one of the best-paid footballers in the world!
What Inspires Kenyan Betting?
Kenyans’ proverbial resilience is reflected in their betting habits. Despite the risks involved, 13.9 % of Kenyan adults are active punters. Urban males aged between 18 and 36 are the most prevalent bettors. 11.2% of the population views betting as a reliable source of income.
The high unemployment rate in the country is a huge contributor. People with little to no consistent income risk it all for a chance to win big and ‘get out of the block.’ Additionally, the remarkable internet penetration in the country makes betting easy. The mobile phone is the most popular tool in Kenyan betting.
Betting companies combine accessibility with crazy marketing to go to the deepest pockets of the practice. They embrace local mobile money transfer options and USSD codes to make it possible for even those using feature phones to place bets.
Publicized stories of the occasional jackpot winner ensure that Kenyan betting lovers never lose that thirst. Bookmarkers lead the profit race against casinos. They pocketed KES 16.3 billion against casinos’ 6.4 billion in the highlighted period.
These astronomical profits attract the government which demands a share of the pie in the form of ever-increasing sin taxes. A 20% withholding tax on winnings is already among the highest in the world. Moreover, the Financial Act 2023 raised excise tax from 7.5% to 12.5%, effective July 2023. The withholding tax is remitted daily through a KRA system that is linked to the betting providers. All these measures – including punishments for guideline violations – do not appear to faze punters or their providers. Therefore, the government is likely to collect even more from the sector this tax cycle.
Moreover, the government has shown an appetite to dive even deeper into the industry with a proposed National Lottery.