for early access to the latest igaming videos!
and get the latest igaming news first!
The decision secures government revenue while tightening control over the fast-growing gambling sector.
The High Court in Kakamega has upheld Kenya’s 12.5% excise tax on betting stakes, rejecting a legal challenge that sought to overturn the levy. The ruling, delivered by Justice Stephen Mbungi, reinforces the government’s stance on curbing betting-related harm while protecting much-needed public revenue.
The case marks one of the most significant tests of Kenya’s gambling tax regime since the tax was introduced under the Finance Act 2023.
A challenge against double taxation claims
The petitioner argued the law unfairly punished punters, but the court saw things differently.
The petition was filed in August 2023 by Edward Okwama, who named the National Assembly, the Kenya Revenue Authority (KRA), Milestone Gaming Limited, Standard Global East Africa, and the Attorney General as respondents.
Okwama claimed that the 12.5% excise duty on stakes, when combined with the 20% withholding tax on winnings, amounted to double taxation and violated the Constitution’s equality provisions under Article 27, a structure previously detailed in the Kenya iGaming Market Research Report. He also argued it duplicated taxes in breach of Article 2(4).
Court rules excise and withholding tax are separate
Justice Mbungi stressed that the two taxes apply at different points in the betting process.
In his ruling, Justice Mbungi dismissed the claims, explaining that excise duty applies at the moment of placing a bet, while withholding tax is charged only when winnings are paid out.
He also clarified that gross gaming revenue (GGR) is a separate levy imposed on betting companies, not on players themselves. With this distinction, the court concluded there was no unlawful duplication of taxes.
The judge said the framework was constitutional, balancing both regulatory and fiscal goals.
A win for Parliament and regulators
The National Assembly defended its role in passing the Finance Act, and the court backed its process.
The National Assembly argued that it had followed proper legislative procedure under Article 95 of the Constitution when introducing the taxes. The court accepted this defence, giving weight to the idea that lawmakers acted within their authority to safeguard the public interest.
The ruling also reaffirmed the KRA’s power to collect the excise duty, securing continued inflows to the national treasury at a time when Kenya faces mounting fiscal pressure.
Strengthening Kenya’s gambling framework
The ruling is about more than tax, it signals a tougher stance on betting-related harm.
Supporters of the decision say it strengthens Kenya’s gambling regulation framework, particularly as concerns grow over the social and financial impact of betting. Authorities argue that high taxation is a tool not only to raise revenue but also to discourage excessive gambling.
By upholding the tax, the court has effectively backed the government’s strategy of strict oversight, which it says is vital to address gambling addiction and financial hardship among young Kenyans.
What happens next?
The petitioner has not ruled out an appeal, but the precedent is clear.
Okwama has yet to confirm whether he will appeal the judgment. If he does, the case could move to higher courts, but legal experts believe the Kakamega ruling sets a strong precedent that will shape future challenges.
For betting operators, the outcome underlines the importance of compliance and signals that taxation will remain a central feature of Kenya’s gaming regulation. This comes against a shifting backdrop, with Parliament recently moving to lower excise duty to 5%, as covered in this update on Kenya’s 5% tax revision.
For players, the ruling makes clear that both excise tax and withholding tax are here to stay as distinct obligations.
A defining moment for the industry
Kenya’s gambling sector is at a turning point, and taxation will play a central role in its future.
The decision not only safeguards revenue for the KRA but also strengthens the government’s position in managing the country’s rapidly expanding betting market.
As the industry grows, the court’s ruling shows that Kenya intends to balance opportunity with responsibility, ensuring gambling contributes to the economy while limiting social harm.
Source: Focus Gaming News Africa
