Kenyans cut back on betting as taxes, inflation bite
Betting is down across age groups, but still more common among younger people. 14.3 percent of 18-25 year olds currently bet, with 13.4 percent considering it a good source of income.
The number of Kenyans engaged in betting has thinned since 2021 amidst new taxes targeting gains from gambling activities and an inflated cost of living cut people’s appetite in the industry.
Only 11.2 percent of Kenyans are currently engaged in betting, a drop of 2.7 percentage points from the 13.9 percent recorded in 2021, according to a new report by the Central Bank of Kenya (CBK), Kenya National Bureau of Statistics (KNBS) and the Financial Sector Deepening Trust (FSD) Kenya.
This comes after the government introduced a 20 percent withholding tax on winnings paid out to punters in January 2023, adding the tax burden to the already existing 12.5 percent excise duty on stakes placed by the gamblers.
Previously, gamblers only had to pay the excise duty on stakes, which was introduced in 2019, while the levy on winnings had not been introduced in 2021, when the last survey was done.
This meant that while gamblers need more money to place stakes, whatever amount they win from the betting companies is much less than before, reducing many people’s appetite in the activity.
Inflationary pressures and rising interest rates on loans have also pushed many Kenyans to the edge, reducing disposable income and forcing many to cut back on non-essential spending like gambling.
The Financial Access (FinAccess) Household Survey reveals that this year, the proportion of the Kenyan population that perceive betting as a good source of income has dropped from 11.2 percent in 2021 to 10.9 percent currently, the lowest ever recorded.
Compared to 2019, more than half of those that considered betting a good income source have changed their minds, and this has significantly taken a toll on the multi-million-shilling industry.
Data from the Association of Gaming Operators in Kenya indicates that the betting companies’ revenues have significantly dropped, from Sh46.8 billion in 2018/19 financial year to Sh17.4 billion in the year June 2023.
The amount spent by each of the gamblers on betting is currently estimated at Sh1,825, but urban dwellers spend significantly more than rural dwellers and the city residents are also more prone to punting.
Nearly all age sets have cut back on betting, but it still remains more common among younger citizens, with 14.3 percent of those aged 18-25 currently engaged in betting, and 13.4 percent of them considering betting as a good income source.
The survey also shows that the more educated and employed Kenyans are also more prone to betting than less educated ones, as are the employed compared to casual and agricultural labourers, meaning that most of the punters are using the platforms as a source of an extra coin.
