Virtually all forms of gambling in Kenya have been legal since 1966, when the Betting Lotteries and Gaming Act outlined regulations and established the Betting Control and Licensing Board. Casinos started to be built soon afterward, but the industry really gained steam only in recent years, when increasing mobile penetration combined with a passion for football created a massive sports betting market.
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Landscape and Key Players
There are 30 licensed casinos in Kenya, most of which are located in major cities. Some of the biggest and most famous casinos in the country include the Casino Flamingo, the Mayfair Casino, and the Captain’s Club in Nairobi, and the Golden Key Casino and the Senator Casino in Mombasa. Blackjack, roulette, and poker are among the most popular table games in Kenya, and slot machines are also very widespread, with estimated totals of around 200 gaming tables and 1300 slot machines throughout the country.
The most popular form of gambling in Kenya is easily sports betting. There are nearly 30 sportsbooks licensed to operate in the country, and it’s estimated that the combined revenue of sportsbooks in Kenya is $2 billion. The first online sportsbook to enter the market was SportPesa, which received its license in 2013.
According to statistics from GeoPoll, SportPesa is far and away the most popular betting platform in Kenya, with 82% of Kenyan gamblers reporting that they had an account with the sportsbook. The other most popular operators are Betin, with 40%, Elitebet, with 22%, Betika, with 12%, Mcheza, with 12%, and Betpawa with 10%. SportPesa, Betboss, Lotto, and Tatua are all among Kenya’s top ten companies by advertising expenditure.
SportPesa, which operates all over Africa, offers detailed statistics, a Youtube channel, live match coverage, and a wide variety of sports to bet on, including niche sports. Betin offers explanations of different kinds of bets, betting tutorials, live streaming, and a variety of bet types for every match. Elitebet, which was one of the first sportsbooks to launch operations in Kenya, only takes bets on football, but offers the ubiquitous M-Pesa payment service as well as accumulator bonuses.
Betika is focused on sports betting and offers sizable bonuses to new users, as well as a massive jackpot that players can hope to win. The sportsbook Mcheza has a long list of sports to bet on and offers live betting, as well as casino games and a large potential jackpot. Betpawa has a very highly reviewed live betting facility.
Sports Betting Boom
Recent years have seen a massive boom in the sports betting sector across many countries in Africa. Countries like Nigeria, Tanzania, and Kenya have seen dramatic increases in sports betting activity, due to a few factors. First, there is a widespread passion for football, particularly European leagues like La Liga and the Premier League.
But just as important as the sport’s popularity has been the rapid advancement of mobile internet penetration, which in Kenya is rapidly approaching 100%. Tied to increased mobile penetration is the mobile phone-based money transfer service M-Pesa, which has made sports betting easily accessible and convenient for Kenyan punters.
Kenya has seen the continent’s third-highest revenues from gambling. According to a report from PwC, Kenya’s GGR in 2014 was around $20 million, with gambling revenues predicted to reach $29 million by the end of 2019, and total gambling turnover estimated to reach as high as $50 million by 2020.
Virtual sports and esports are also enjoying an increase in popularity. 2018 saw the foundation of the Esports Federation of Kenya.
Picture of the Kenyan Gambler
Gamblers in Kenya tend to be young, low-income, and male. They’re also likely to prefer betting via their smartphone, and above all else, their preferred form of gambling is betting on sports - especially football, which is the favorite sport to bet on for 83% of gamblers who responded to a GeoPoll survey.
According to statistics from GeoPoll, 57% of Kenyans who are over 18 (the legal age for gambling) have gambled in the past. Out of participants who had gambled at some point in the past, 69% were male and 44% were female. The age group that gambled the most was males aged 25-34, 77% of whom had gambled at some point in the past.
Smartphones are at the center of the recent sports betting boom. Of those surveyed, 88% of gamblers had placed bets via their mobile phone, and 55% of gamblers do so at least once a week.
A major difference between the Kenyan market and markets in other parts of the world is the average income of the players. 54% of Kenya’s population falls in the lowest socio-economic classes of LSM (Living Standard Measurement), meaning operators rely on large volumes and high frequencies of low-value bets.
The tremendous popularity of sports betting and the frequency with which most Kenyans bet - at least once a week - create substantial profits for operators. While most Kenyan gamblers only spend around $50 a month on betting, the formal gambling industry generated $28.3 million in taxes in 2015, the third-highest in Africa after Nigeria and South Africa.
Tax Dispute
Tensions between sports betting operators and the government of Kenya reached a breaking point over the summer of 2019. Government officials accused gambling operators of failing to comply with tax increases. According to the government, taxes applied to punters’ initial stakes as well as their winnings, creating a tax on overall gambling turnover.
Operators, however, had only applied the tax to gamblers’ winnings, leading government officials to accuse operators of avoiding taxes and suspend the licenses of 27 sports betting operators in July 2019. Operators that agreed to the government’s new tax regime had their licenses reinstated.
In the same month, telecom company Safaricom was banned from conducting sports betting transactions via M-Pesa, a move predicted to lower M-Pesa’s betting and gambling revenues by 35% when compared to the previous year. In August, President Uhuru Kenyatta even called for gambling to be completely banned, though support in parliament is far from unanimous and that outcome seems unlikely.
But not all operators were happy to comply with regulators’ wishes. One of the biggest sportsbooks in the country, SportPesa, announced that in light of a 20% excise tax on punters’ stakes it would cease operations in the country. The sportsbook explained that with a 20% turnover tax, operators would be forced to pay more in taxes than they had been able to generate in revenues.
In early October, SportPesa announced the layoff of over 400 employees as it ceased operations in Kenya. The sportsbook Betin has also pulled out of the country. However, a group of operators took a lawsuit to the Tax Appeals Tribunal, which ruled in favor of the operators, saying that the 20% tax could only be applied to winnings and would be collected from players, not operators. In the wake of this decision, SportPesa announced it would consider reentering the market.