Betsafe joins firms exiting Kenya on increasing taxes

The number of betting firms licensed to operate in Kenya increased by 29 from September last year. 

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Betting firm Betsafe has exited the Kenyan market amid increased taxation that continues to push companies out of the multibillion-shilling industry.

Betsafe CEO Victor Sudi said the firm shut down Kenya operations effective May 14, rendering its employees jobless.

The firm is the latest to exit the market on grounds of what they termed as excessive taxation that has seen other players, including Betin, folding.

Betting firms are taxed on the gross gaming revenue at a rate of 15 percent besides paying corporate tax of 30 percent on profits.

They also pay income tax at the rate of 16 percent, adding to the annual licensing and compliance fees.

There was a proposal tabled in Parliament last year to have betting firms pay a gaming levy of 13 percent of their gross revenues.

"It's true that Betsafe Kenya will cease its operations in the country effective May 14, 2024," Mr Sudi said earlier in a phone interview with this publication.

Betsafe launched in Kenya in December 2020 through Bet High Kenya, which is the Kenyan subsidiary of Betsson.

Mr Sudi did not, however, disclose the number of people who have lost jobs due to the development but promised punters with outstanding balances will be refunded within seven days.

The government has since 2019 publicly declared war on betting firms through increased taxation in an effort to stem the runaway popularity of betting among the youth and the unemployed.

Betin and Sportesa (then registered under Pevans East Africa) exited the Kenyan market five years ago amid clashes with the taxman over billions of shillings in unpaid taxes.

SportPesa has since returned after the trading name was acquired by a new firm Milestone Games Limited.

Besides targeting betting firms, the government has also gone for gamblers through taxes on betting stakes and winnings.

The Kenya Revenue Authority (KRA) takes 12.5 percent of betting stakes, in addition to a 20 percent withholding tax on every winning.

There is also a proposal in the Finance Bill, 2024 to raise the tax on betting stakes to 20 percent as the government tightens control.

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Note: The results are not exact but very close to the actual.