NAIROBI, Kenya- Lawmakers have raised alarm over suspected underreporting of betting winnings by firms operating in Kenya, citing glaring inconsistencies in tax data submitted by the Kenya Revenue Authority (KRA).
Despite a surge in the amount Kenyans are wagering evidenced by rising excise duty collections taxes from betting winnings have declined, prompting suspicions of revenue manipulation by betting companies.
Betting firms are legally required to remit a 15% excise duty on the amount staked, 30% corporate income tax on profits, and a 20% withholding tax on player winnings.
From July 2024 to March 2025, excise duty collections rose by 24% to Sh9.9 billion, indicating higher betting activity.
However, during the same period, withholding tax from winnings dropped by Sh800 million compared to the previous year.
“If Kenyans are betting more, then logically there should be more winnings and, by extension, more tax revenue from those winnings,” said National Assembly Finance and Planning Committee Chairperson Kimani Kuria.
“This discrepancy suggests that some betting firms may be under-declaring payouts.”
Data from KRA illustrates the trend: in July 2024, the agency collected Sh866 million in excise duty equivalent to bets worth Sh5.77 billion.
Yet only Sh345 million was recorded in withholding tax from winnings, marking a 27% decline from the previous year.
September 2024 marked the highest monthly betting volume in the review period, with punters staking Sh8.84 billion, generating Sh1.326 billion in excise tax.
A similar trend followed in December with stakes worth Sh8.45 billion.
The sustained high betting volumes from September 2024 to March 2025, all exceeding Sh8 billion monthly, intensified scrutiny from MPs, who questioned the declining taxes on winnings despite higher gambling activity.
KRA’s Chief Manager for Betting and Gaming, Joseph Otieno, attributed the rise in excise duty to improved compliance through automation.
However, he acknowledged the declining winnings tax, explaining that it could be linked to odds variations, which affect payout levels.
“I agree that the numbers appear inconsistent,” Otieno said during a briefing with the committee. “While winnings are increasing, they’re not doing so at the same rate as the stakes—largely due to the fluctuations in betting odds, which are regulated by the Betting Control and Licensing Board.”
During the same nine-month period, the government collected a total of Sh19.6 billion in taxes from betting, up from Sh17 billion the previous year.
Homabay Town MP Peter Kaluma questioned the profitability of betting firms that continue to thrive despite contesting the excise tax burden.
Karachuonyo MP Adipo Kuome urged the government to weigh the social impact of gambling alongside revenue goals.
“Young people are losing their livelihoods—some even taking their lives due to addiction. Taxation must go beyond revenue and promote social protection,” Kuome said.
Lawmakers also raised concerns about the presence of foreign betting firms operating in Kenya without proper registration.
They called for stronger oversight of offshore operators and demanded that the KRA establish systems to track income from such entities.
The committee has directed the Betting Control and Licensing Board to ensure transparency in stake and winnings declarations.
It also called for a detailed analysis of high-volume games such as Aviator and various jackpots to evaluate compliance levels.
KRA has been instructed to investigate whether foreign-based firms are evading taxes while operating illegally in Kenya.
Parliament also requested detailed reports on betting patterns, taxation impact on jobs, and mechanisms for monitoring cross-border gaming platforms.
