The crux of the issue lies in the unexplained mismatch between the consistent increase in wagering volumes and the corresponding decline in tax revenues from winnings, raising suspicions of potential tax evasion or underreporting by betting companies.<\/p>\n\n\n\n
In Kenya, betting firms are subject to three key taxes: a 15 per cent excise duty on stakes, a 30 per cent corporate tax on profits and a 20 per cent withholding tax on winnings.<\/p>\n\n\n\n
The data released by KRA revealed that excise duty collections from betting activities rose by 24 per cent to Sh9.9 billion (\u20ac67.6m) between July 2024 and March 2025. However, withholding tax from winnings dropped by Sh800 million (\u20ac5.46m) during the same period.<\/p>\n\n\n\n
The trend was observed in July 2024<\/strong> when KRA received Sh866 million (\u20ac5.9m) in excise duty, reflecting a betting volume of Sh5.77 billion (\u20ac39.4m). However, the withholding tax from winnings for that month was significantly lower, 27 per cent year over year, at Sh345 million (\u20ac2.35m).\u00a0<\/p>\n\n\n\n During its session with KRA officials, the Finance and National Planning Committee<\/strong> raised concerns over the worrying gap between the excise duty collections and withholding tax from betting winnings. <\/p>\n\n\n\n Kimani Kuria<\/strong>, committee chairperson, said: “This mismatch suggests possible manipulation of declared winnings by betting companies. If more money is being staked, logically, there should also be more winnings.”<\/p>\n\n\n\n Kenya’s betting activity has reached new heights in recent months. Since September 2024, the country’s monthly stakes have consistently exceeded Sh8 billion (\u20ac54.6m).<\/p>\n\n\n\n However, members of parliament are concerned that the huge betting revenues do not tally with the declared winnings.<\/p>\n\n\n\n Responding to the query, Joseph Otieno<\/strong>, KRA’s Betting and Gaming Chief Manager, credited automation for the increased tax revenue. He also admitted withholding tax inconsistencies but attributed them to fluctuating betting odds.<\/p>\n\n\n\n Otieno said: “I agree there are discrepancies. While winnings are increasing, they’re not rising proportionately to the amount staked. That’s largely due to odds variations, which are regulated by the Betting Control and Licensing Board.”<\/p>\n\n\n\n Lawmakers also questioned whether all local betting firms are registered in Kenya and if KRA can effectively track revenue from operators based offshore. <\/p>\n\n\n\n MPs then directed KRA to probe tax evasion allegations against foreign betting firms operating locally.\u00a0<\/p>\n\n\n\n The committee concluded the session by demanding stricter regulation from the Betting Control and Licensing Board<\/strong> (BCLB) and greater transparency in reporting winnings and stakes.<\/p>\n\n\n\n They also requested a detailed analysis of popular games like Aviator<\/a> and Jackpot<\/strong> to evaluate their compliance with regulations. <\/p>\n\n\nThe Odds Factor<\/h2>\n\n\n\n
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