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Malawi’s new tax rules, introduced in December, have changed the betting industry, and stakeholders are warning that this might lead to players moving to unlicensed gaming platforms.
Winnings that were once partly exempt are now fully taxed, with the rate climbing from 10% to 15%. No matter the size of the payout, every player is subject to the same deduction. Previously, there were exemptions for winnings under 100,000 kwacha (€50) or 500,000 kwacha (€245).
“Punters stake their own personal funds and bear 100% of the financial risk when placing bets. In the event of a loss, no relief or compensation is provided. However, when a punter records a win, a 15% withholding tax is deducted from the gross payout,” Baby Gin (@LESofficialMw) a Malawian nurse, stated on X, according to a Focus Gaming News report.
She noted that even small gains above the stake are being taxed, leaving bettors feeling shortchanged, especially since operators themselves still pay licensing fees and gross revenue taxes.
Unlicensed betting sites risk becomes real
The concern is that this feeling of being cheated will drive people away from licensed platforms. Reduced activity on regulated sites could mean more punters turning to unlicensed or offshore services, where taxes don’t apply but protections for players are absent. It will also mean less trust between consumers, operators, and regulators, plus lower government revenue.
Peter Kesitilwe, CEO of the Africa iGaming Alliance, warned that sudden changes in taxation risk slowing down the sector’s growth. He has long argued for balanced policies that raise revenue without pushing players into the black market. Without such balance, he said in a recent interview, offshore operators will gain ground at the expense of Malawi’s regulated industry.
Stakeholders agree that if players move to unregulated platforms, both sides lose: bettors face unsafe markets with no guarantees of fair play, and the state misses out on tax income while dealing with the social costs of unchecked gambling.
Source: Focus Gaming News
