Malawi’s gambling sector at risk as tax hike drives players to unlicensed sites
The tax often hits small margins above the stake, cutting into earnings and creating a sense of unfairness, especially since operators already pay taxes on gross gaming revenue and licensing fees.
Malawi.- Malawi’s gambling landscape is at risk of a mass shift to unlicensed sites following recent tax increases on winnings, with players and observers concerned about the impact on everyday punters using licensed platform.
Last December, the country’s parliament approved an increase in the withholding tax on betting and gambling winnings from 10 per cent to 15 per cent as part of the Taxation (Amendment) (No. 2) Bill. The legislation also removed previous tax-free thresholds, such as exemptions for winnings below certain amounts like 100,000 kwacha (€50) or 500,000 kwacha (€245) in some cases, meaning the 15 per cent tax now applies to all winnings, regardless of size. Punters have expressed frustration over the impact on their returns.
A Malawian nurse and avid sports fan, Baby Gin (@LESofficialMw), took to X in early January 2026 to share a detailed thread about the struggles of everyday punters under the new tax regime. She said: “Punters stake their own personal funds and bear 100% of the financial risk when placing bets. In the event of a loss, no relief or compensation is provided. However, when a punter records a win, a 15% withholding tax is deducted from the gross payout.”
Baby Gin added that the tax often hits small margins above the stake, cutting into earnings and creating a sense of unfairness, especially since operators already pay taxes on gross gaming revenue and licensing fees. The user warned of potential outcomes, including reduced betting activity on licensed platforms, increased migration of punters to unregulated or illegal betting services, and loss of trust between regulators, operators and consumers.
In a recent interview, Peter Kesitilwe, CEO of Africa iGaming Alliance, warned that Malawi’s sharp changes to winnings taxation and levies will curb regulated activity and likely hinder growth in the sector. The gaming veteran has long championed evidence-based, sustainable gambling taxation that balances government revenue needs with consumer protection and prevents offshore operators from disrupting the regulated market.
When bettors shift to unlicensed or offshore sites, it’s a lose-lose situation for players and the government. Players face unregulated platforms with no consumer protections like fair odds or dispute resolution, while the government loses gambling revenue and faces societal costs of unchecked illegal gambling. Bettors and gambling stakeholders are urging the Malawian government to reconsider the tax approach before its adverse effects start biting harder and licensed gambling activity dwindles.
