The National Assembly Committee on Sports has recommended a reprieve for betting firms in Kenya, proposing a reduction in taxation rates outlined in the Gambling Control Bill, 2023.

The committee suggests lowering the gambling levy from 15 per cent to 13 per cent of the gross gaming revenue and eliminating the proposed one per cent gaming tax.

The government had introduced these taxes as part of efforts to curb the allure of the Kenyan betting market to firms and address concerns over the rising trend of gambling.

However, the committee's recommendation could provide a significant boost to betting firms, whose revenues have faced sustained pressure from increased taxation in recent years.

The committee's report emphasizes the potential negative consequences of additional taxes, stating, "Introduction of additional taxes or levies will lead to shutting down of business activities by legal gambling and betting operators, encourage the boom of illegal markets and consequently result in the reduction of revenues to the State."

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Currently, betting firms are subject to a 15 per cent tax on the gross gaming revenue, calculated as turnover minus winnings paid out.

Additionally, they pay a 30 per cent corporate tax on profits.

Gamblers are also taxed, facing a withholding tax of 20 per cent on every winning bet and an excise tax of 12.5 per cent per betting stake.

The Association of Gaming Operators, representing betting firms, had petitioned Parliament to discard the proposed taxes, citing the industry's struggle with over-taxation. The committee's recommendation aligns with these concerns.

The focus now shifts to lawmakers, who are expected to consider and potentially adopt the committee's report.

If approved, this would set the stage for the passage of the Gambling Control Bill into law without the initially proposed tax burdens on betting firms.

The two taxes initially intended for the gross gambling revenue could have further impacted the already diminishing earnings of betting companies.

Over the years, betting firms in Kenya have faced challenges in maintaining robust earnings due to a combination of increased taxation and a decline in the amounts wagered by gamblers.

The parliamentary decision on the proposed tax reductions will probably shape the future landscape of the gambling industry in the country.