The gambling scene in Kenya is vibrant, particularly in cities like Nairobi. Our local casinos offer many options and gaming experiences for enthusiasts.
Though not as luxurious as the ones in Las Vegas or Macau, these casinos still prove to be top-notch facilities with a five-star experience for Kenyans and tourists alike.
With over 83% of adults engaged in casual betting, Kenya boasts the largest young betting audience globally. As the continent with the fastest-growing youth population, technological advancements in gaming and the influx of new players are common.
Yet, one question arises: is investing in land-based casinos still viable?
The Situation of Land-Based Casinos
Land-based casinos have great appeal due to its alluring environment and winning possibilities.
The Kenyan gambling market, valued at $40 million in 2020, is the third biggest in Africa, following South Africa and Nigeria. It continues to grow every year, with a notable emphasis on sports betting in which football is dominant.
Kenya counts on 30 licensed casinos, mostly based in Nairobi. People travel throughout the country to have the full experience and play popular games including blackjack, roulette, poker, and an extensive array of slot machines.
However, the charming environment can also be a disadvantage for many bettors and enthusiasts. In a place where casual players meet professionals, the competition can get frustrating. The heavy taxation imposed by the Kenyan government on the betting industry resulted in a notable decline in payouts.
Taxes such as a 12.5% levy on betting stakes, a 20% withholding tax on winnings, and a 15% tax on gross gaming revenue for betting firms could harm market growth and profitability.
The Kenyan government has implemented multiple taxes targeting the betting sector, including a tax on betting stakes initially set at 7.5% and later raised to 12.5%. Additionally, there’s a withholding tax of 20% on winnings and a 15% tax on betting firms’ gross gaming revenue.
These relatively heavy tax burdens, coupled with a 30% corporate tax on profits, have the potential to stop market growth. Moreover, the proposed Gambling Control Bill of 2023 introduces further financial obligations, including a 15% tax on gross gaming revenue and a monthly fee, enhancing industry’s challenges.
Compared to Brazil’s new gambling law, Kenya imposes hefty taxes on the gambling industry, but they are less harmful on online casinos. The legislation defines online games and sets out requirements for operators, including local ownership, technical standards, and corporate policies on lower taxes.
Operators will be subject to a 12% tax on gross gaming revenue, while bettors will face a 15% tax on net prizes.
Brazil’s regulation only taxes operators at 12% on gross gaming revenue and bettors at 15% on winnings exceeding R$2,112, which is likely to result in a better experience and outcomes for both operators and bettors.
Advantages of Online Casinos
Among African users, Kenya has one of the largest internet penetration rates, with more than 43% of its people accessing the internet via mobile devices. This resulted in a great investment in iGaming and the online casino sector, particularly given the convenience it offers.
In 2019, 88% of bettors used mobile phones to place wagers, a trend expected to rise. M-Pesa, a popular mobile money service, also helped expand the customer base for online gambling businesses significantly.
According to a study from KTO about bets during the 2022 World Cup, 9 out of 10 people use smartphones to place their bets. The online casino environment provides a lucrative opportunity with the rising popularity of online-only segments, such as slots, attracting young adults with low-risk, simple gaming experiences.
Why choosing Online Casinos
The online casino is a great opportunity for local and foreign operators, with the market projected to reach significant revenue milestones in the coming years. Projections suggest a market volume of over US$55 million in 2024, with an annual growth rate exceeding 5%.
Playing at online casinos makes it easier to learn the games and also receive payments in some cases. There are lots of different games to choose from, and you can enjoy the casino experience from home. Bettors also don’t have to worry about closing time and transportation, being able to “sit” at a virtual table at any time to enjoy their game.
While land-based casinos continue to be a great attraction in Nairobi, the online gambling sector emerges as a promising avenue for both players and businesses.
Despite its relatively smaller size compared to larger economies, the online gambling market in Kenya holds significant importance within its own economic context.
