Betting firm Betsafe has joined the exodus of companies leaving the Kenyan market, citing a heavy tax burden that has rendered the industry unsustainable.

This development comes amidst the government's ongoing efforts to curb gambling, particularly among young people and the unemployed.

Betsafe's CEO, Victor Sudi, confirmed the company's closure on May 14, 2024, resulting in job losses for an undisclosed number of employees.

Sudi assured customers with outstanding balances that they would receive a full refund within seven days via M-Pesa mobile money transfers.

Betsafe's departure follows a trend in the Kenyan gambling industry.

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The company joins Betin and Sportpesa, who exited the market five years ago due to similar tax disputes with the Kenyan Revenue Authority (KRA).

Interestingly, Sportpesa has since re-entered the market under new ownership.

The Kenyan government's strategy to discourage gambling involves a two-pronged approach.

Firstly, betting firms face a significant tax burden.

They are taxed on their gross gaming revenue at 15 per cent, corporate tax at 30 per cent on profits, and an additional 16 per cent income tax.

On top of this, they must pay annual licensing and compliance fees.

A proposal for a further 13 per cent gaming levy on gross revenue was tabled in Parliament last year.

Secondly, the government targets gamblers directly through taxes on betting stakes and winnings.

The KRA currently deducts 12.5 per cent from every wager and withholds a 20 per cent tax on any winnings.

The Finance Bill 2024 proposes an increase in the tax on betting stakes to 20 per cent, further tightening the government's grip on the industry.

The effectiveness of these measures in achieving their intended goals remains to be seen.

While some companies have exited the market, others, like Sportpesa, have found ways to re-enter.

Only time will tell if the government's strategy will successfully curb gambling or simply force the industry to adapt and operate under a more stringent regulatory and tax environment.