Number of Kenyans relying on betting to pay bills falls to 11pc


Close-up cropped shot of male hands making bets using gambling mobile application on his phone. PHOTO | SHUTTERSTOCK | NMG

The number of Kenyans who bet to pay bills dropped by half last year as cash used for placing stakes went down by 63 percent in the wake of new taxes introduced to curb the gaming craze.

A report by the Central Bank of Kenya and Kenya National Bureau of Statistics shows that gamblers who rely on betting for livelihoods dropped to 11.2 percent from 22.7 percent two years ago. The average cash used to bet dropped to Sh939 from Sh2,559.

The drops came at a time the State imposed a 7.5 percent tax on every betting stake from July 1 in addition to a 20 percent levy on every winning bet to tame the gaming addiction.

“This could be partly attributed to the government’s deliberate measures to combat irresponsible and illegal betting in 2019 and increased public awareness against betting,” the report says.

The Treasury reintroduced the taxes in addition to the levy on winnings to discourage gaming among youth.

Sports betting has gained popularity among the youth, with some funding their addiction by taking loans from banks and digital lenders. There have also been reports of punters committing suicide after losing all their money.

The excise tax on betting stakes was introduced in 2019 but was removed in July last year through amendments to the Finance Act, 2020 following lobbying by betting firms

MPs amended the law from July 1 to reintroduce the tax that compels betting firms to withhold and transfer to the Kenya Revenue Authority Sh7.50 out of every Sh100 wagered regardless of whether the punter wins or loses.

The excise was meant to erode the firms’ revenues and hurt their profitability. Betting firms are taxed on the gross gaming revenue — turnover minus winnings paid out — at a rate of 15 percent. They also pay corporate tax on profits at a rate of 30 percent.

Betting has turned out to be a source of income for unemployed Kenyans who use it to pay their bills in an economy that is struggling to create jobs.

The report shows that 14 percent of Kenyans rely on betting to pay their bills, making gaming the alternative source of employment that has seen most gamblers tap soft debts from digital lenders to fund the craze.

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