In a fiscal move that has captured the attention of compliance officers across the continent, Kenya’s Finance Bill 2026 has put gambling winnings under the spotlight.
The draft legislation proposes a comprehensive 20% withholding tax that would apply uniformly to both residents and non-residents participating in the country’s multi-vertical gaming sector.
A Reversion to Past Regulatory Frameworks
Kenya’s Finance Bill 2026, initially tabled in Parliament on April 30, officially entered its public participation phase on May 11, with formal submissions closing today, May 25. If passed into law, the measure would fundamentally reshape the country’s betting tax framework. The local landscape was revised only last year to focus on a 5% operational levy tracking deposits and withdrawals.
The new draft law makes clear that winnings will face a direct 20% tax under extensive amendments to the Third Schedule of the Income Tax Act. Legal analysts at Cliffe Dekker Hofmeyr noted that the proposal:
“…introducing a 20 per cent withholding tax (WHT) rate on winnings”
They further elaborated that the update represents:
“…a reversion to the earlier tax position”
The analysts added that the changes would extend taxation to withdrawals at 5% and winnings at 20%, while broadening the definition of deposits to include chips, tokens, credits, or similar instruments used in gambling.
Tightening Oversight Across a Top-Tier African Ecosystem
Kenya continues to rank as one of Africa’s largest and fastest-growing gaming markets, with mobile payment platforms like M-Pesa fueling massive growth in sports betting and online casino engagement. Finance Bill 2026 goes beyond basic gambling taxes, explicitly spelling out what counts as winnings and withdrawals while tightening federal oversight of digital payments and virtual assets.
Winnings are defined as payouts from licensed betting, gaming, lottery, or prize competition operators, excluding the original stake. Concurrently, withdrawals are described as any money or cash equivalent taken from gambling accounts. These rigid definitions are meant to close structural gaps in the law and ensure that all transactions tied to betting are captured under the tax net.
The proposals sit within a broader government push to expand state revenue and strengthen regulation of digital transactions. Reaction to the new measures has been mixed. Supporters argue that higher taxes and stricter oversight could boost state revenue and improve accountability.
Conversely, critics warn that heavier taxation risks driving price-sensitive players toward offshore or unregulated sites, potentially undermining the very regulatory oversight the government is trying to enforce.
