Kenya Pushes to Simplify Gambling Tax Rules as Revenue Climbs to Sh28.45 Billion

Kenya’s gambling regulator is seeking changes to the country’s tax framework, arguing that simpler rules could improve implementation across a fast-evolving betting and gaming industry.

The Gambling Regulatory Authority has proposed reforms to the gambling tax regime under submissions to the National Assembly Departmental Committee on Finance and National Planning during consideration of the Finance Bill 2026.

Among the proposed changes is the removal of the legal definition of “winnings” and scrapping the 20 per cent withholding tax on prize competitions and short-term lotteries. The Authority argues that the current framework is difficult to apply consistently across both digital and physical gambling channels.

According to the submissions, implementation challenges become more pronounced where rewards are promotional, virtual, or offered in non-cash form.

The regulator is also proposing changes to how “amounts deposited” are defined for taxation purposes. Under the proposal, deposits would be simplified to mean cash deposited into a punter’s wallet regardless of source.

The Authority says the existing wording has created valuation difficulties around bonuses, promotional offers, credits, and tokens, making tax administration more complex.

Even as it pushes for changes, the regulator maintains that clearer taxation of deposits and withdrawals has expanded the tax base.

Data presented to the committee by the Kenya Revenue Authority shows gambling tax collections increased by 11 per cent, rising from Sh25.24 billion in the 2024/2025 financial year to Sh28.45 billion in the 2025/2026 financial year as of April. The proposals now place focus on whether a simplified tax structure can improve implementation while sustaining revenue growth in the sector.