Economy

Sh20m betting entry fee to lock out small operators

BET

A man uses a slot machine: The bar has been raised for people eyeing a pie of the bets. FILE PHOTO | NMG

The entry fee for investors seeking a piece of Kenya’s betting and gaming pie has been raised from Sh40,000 to Sh20 million in a proposed law that is set to lock out small operators.

Companies have been paying a maximum of Sh40,000 to the Betting Control and Licensing Board as a deposit fee to be refunded later upon expiry or closure of operations.

The proposed deposit fee, which effectively raises the entry barrier, is contained in a bill tabled in Parliament last week. It also proposes steep increments in penalties to be slapped on companies in breach of industry laws.

“The bill seeks to amend the Betting, Lotteries and Gaming Act to enhance the penalties,” reads the proposed law. Investors who, for instance, provide false information when applying for or renewing their licence, will be liable to a fine of Sh1 million or a three-year jail term or both, up from only Sh5,000 currently.

The hefty fines proposal, if approved by Parliament, will also see betting firms that submit cooked financial statements hit with a Sh1 million fine or five years imprisonment of directors, up from just Sh10,000 currently.

READ: Betting tax cut by more than half to 15 per cent

The Treasury has proposed, through the same bill, a cut in the gaming tax from 35 per cent of gross revenues to 15 per cent, caving in to pressure from betting firms.

The companies had opposed the new tax which took effect on January 1, saying the high taxes are hurting their business and had opened the door for a black market for betting that could deny the taxman revenues.