Malawi regulator warns new gambling taxes may hurt revenue and compliance

Authorities raised the withholding tax on gambling winnings in 2025 as part of efforts to increase government revenue from the fast-growing sector.

Malawi.- The Malawi Gaming and Lotteries Authority (Magla) has raised concerns that recently introduced gambling taxation measures could unintentionally suppress industry performance and reduce government revenue, a position that reflects wider debates currently unfolding across Africa’s regulated gaming markets.

Following a familiarisation visit to Magla’s Blantyre offices, former Minister of Industry, Business, Trade and Tourism George Patridge confirmed that the authority is facing both administrative and commercial challenges linked to the new Taxation Act. According to Patridge, the regulator believes the measures, if implemented without adjustment, may discourage betting activity and weaken compliance. He said: “They related to us the difficulties that they have in implementing the new Taxation Act as it relates to gambling, both administratively and in terms of the likelihood that revenue may decline if the new taxation measures are adopted.”

The concerns emerge against the backdrop of Malawi’s wider tax reforms. Under amendments introduced in 2025, authorities raised the withholding tax on gambling winnings as part of efforts to increase government revenue from the fast-growing sector. While such measures are common across African jurisdictions, industry analysts have repeatedly warned that sharp tax hikes can push players toward unregulated markets, undermining long-term revenue collection.

Magla’s Director General, Rachel Mijiga, noted that the authority has opted for consultation rather than confrontation. Engagements have already taken place with major operators, including BetPawa, Betway and Premier Bet, as Magla works to understand how the tax framework is affecting operations and customer behaviour. She said: “Once we’ve gathered information, we are going to have a session with the Ministry of Finance, the Treasury Department as well as the Malawi Revenue Authority to align with the operators on the best way forward for a win-win situation.”

This collaborative approach aligns with Magla’s broader regulatory strategy. In recent months, the authority has intensified enforcement against illegal gambling while expanding electronic monitoring systems to improve transparency and compliance across licensed operators.

Despite short-term uncertainties linked to taxation, Magla remains optimistic, projecting 60 per cent revenue growth in the new financial year beginning April 1. Whether that target is achieved may depend largely on how effectively policymakers balance revenue ambitions with industry sustainability.