For every Sh10,000 that a gambler wins, the KRA takes Sh2,000.īetting firms are taxed on the gross gaming revenue – turnover minus winnings paid out - at a rate of 15 percent and a corporate tax on profits at a rate of 30 percent. Parliament last year approved a 7.5 percent excise tax on every betting stake, adding to a 20 percent withholding tax that the KRA takes from every winning bet.īetting firms are required to withhold and transfer to the KRA Sh7.50 out of every Sh100 wagered regardless of whether the punter wins or loses. SportPesa was one of the 10 firms, including Premier Betting Kenya, Gameco LLP, Magic Slots and Cheza Gaming, whose licences were revoked in 2019 over the tax dispute. The huge payouts and amounts spent highlight how betting had become the preferred pastime for millions of Kenyans, prompting a government crackdown and imposition of higher taxes to stem the sector’s growth. While a few gamblers get lucky and win large sums of money, the activity represents missed opportunities and losses for participants as a whole. In the six months to June 2019, punters used Sh86.39 billion to bet and got Sh75.78 billion in payouts.īut the financial impact of the vast payouts remains unfelt given that most punters plough back the winnings to bet, ultimately losing the money.
Betting stakes rose to Sh15.8 billion while payouts increased to Sh12.34 billion the following year. Gamblers used Sh1.27 billion to bet through SportPesa in the 14 months to December 2014 and received Sh977 million as payouts. The disclosures show that the amounts gamblers used to stake and payouts by the firm were on a steady rise from 2014 until the company closed shop. Pevans’ records show that punters used Sh149.73 billion to bet through SportPesa in 2018, up from the Sh111.51 billion they spent a year earlier. The sports betting brand made a comeback to the Kenyan market in October 2020 under a new company called Milestone Games whose business performance remains a secret. The gaming firm ceased operations in July 2019 after the Betting Control and Licensing Board (BCLB) revoked its licence over unpaid taxes and penalties that the taxman estimated at Sh95 billion. Other big winners in the betting craze are the Kenya Revenue Authority (KRA) and mobile money operators whose platforms are used to fund the bets.
Pevans’ shareholders, comprising a few individuals, reaped the largest gains as the company recorded net earnings of Sh13.24 billion in the 68 months it operated in Kenya, an amount that is similar to the current market value of Bamburi Cement. The documents show that gamblers’ best year was in 2018 when their combined winnings peaked at Sh129.6 billion, rising from Sh95 billion the previous year. Most participants, however, eventually book substantial losses from the activity. The payouts comprise ordinary bets and jackpots where winners earn millions of shillings, pointing to the pull of the betting craze as Kenyans eye quick cash from popular sporting events such as soccer.Ī small group of lucky punters has struck it rich, including winners of mega jackpots. Most punters use part of their winnings to place new bets, meaning that the sums spent on betting represent the impact of recycled profits as well as growth in the number of customers and intensity of gambling.
The amount represents 85 percent of the Sh447.33 billion that gamblers staked in the period, according to Pevans’ audited financial statements and management accounts seen by the Business Daily. Kenyan gamblers won Sh380.53 billion in betting payouts from SportPesa between November 2013 and June 2019 when the company operated under Pevans East Africa, underscoring the scale of the prizes that are fuelling the betting craze.