Key Takeaways
- The Gambling Regulatory Authority (GRA) has called on Kenyan lawmakers to eliminate a proposed 20% levy on gambling winnings included in Finance Bill 2026
- According to the regulator, imposing taxes on non-monetary prizes such as gadgets or service vouchers would prove impossible to enforce effectively
- The GRA advocates for maintaining taxation exclusively on cash deposits, describing this approach as “simple, stable and predictable”
- Revenue from gambling taxes climbed 11% to reach Ksh28.45 billion (approximately $220 million) by April 2026 using the existing deposit-focused framework
- Parliamentary review of Finance Bill 2026 continues after the public comment period ended on May 25
Kenya’s authority responsible for gambling oversight is challenging government efforts to reintroduce a 20% levy on gambling winnings, warning that such a measure would prove difficult to implement and could destabilize the sector.
The proposed tax appears in Finance Bill 2026. If passed, it would reinstate a withholding levy on proceeds from prize competitions and short-duration lotteries. This represents a reversal of 2025 reforms, when Kenya shifted to a framework that applies taxes to deposits and withdrawals rather than winnings.
Regulator’s Position to Lawmakers
The Gambling Regulatory Authority (GRA) presented its arguments to the National Assembly’s Finance and National Planning Committee during a May 26 hearing.
Peter M. Karimi, serving as GRA Director General, explained to members of parliament that prize competitions function “primarily as marketing promotions where players do not even wager a stake.”
The oversight body cautioned that attempting to tax non-monetary rewards—including electronics, home goods, wellness services, or vehicle maintenance packages—would present insurmountable enforcement challenges.
Additionally, the GRA requested that Parliament completely eliminate the term “winnings” from gambling legislation, noting it leads to classification complications.
Debate Over Gaming Credits and Tokens
Another contentious matter emerged regarding the proper definition of taxable deposits.
Parliamentarians are considering expanding the tax framework to encompass chips, tokens, and gaming credits. However, the GRA contends these frequently originate from promotional offers or complimentary wagers and lack genuine monetary value.
The regulatory authority maintains this expansion would introduce unpredictability and administrative complexity for both industry operators and customers.
As an alternative, the GRA recommends limiting taxation exclusively to actual cash deposits transferred directly into player accounts. Such a method, the regulator emphasized, would maintain system clarity and simplicity.
The authority referenced performance metrics under existing regulations as proof of effectiveness. Revenue collections increased 11% to Ksh28.45 billion—equivalent to roughly $220 million—by April 2026. This represents growth from Ksh25.24 billion, approximately $195 million, during the preceding period.
The GRA attributes this improvement to the 2025 regulatory changes. Through focusing on deposits and withdrawals, authorities broadened the revenue base while avoiding industry disruption.
Finance Bill 2026 currently proposes more extensive coverage, encompassing deposits, withdrawals, and cash-equivalent instruments. Parliamentary members continue evaluating these provisions. The public consultation window concluded on May 25.
Lawmakers have not reached a final determination. The legislation remains under parliamentary consideration, and the eventual decision will determine Kenya’s future approach to gambling taxation.
The GRA’s stance remains unambiguous: the present framework successfully generates increased revenue, and extending taxation to winnings and non-cash prizes threatens to complicate enforcement without delivering substantial additional benefits.
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