Members of Parliament have raised concerns over suspected manipulation of betting winnings by firms operating in Kenya, citing inconsistencies in tax revenue data provided by the Kenya Revenue Authority (KRA).
According to lawmakers, while the volume of money staked by punters has been steadily rising,reflected in a sharp increase in excise duty collections, taxes from winnings have paradoxically declined, raising red flags over possible underreporting by betting operators.
The Finance and National Planning Committee engaged KRA officials in a heated session to address the apparent discrepancies. Betting firms are required to pay a 15% excise duty on stakes, a 30% corporate tax on profits, and a 20% withholding tax on winnings.
KRA data shows that excise duty collections from betting activities grew by 24% to Sh9.9 billion between July 2024 and March 2025. In contrast, withholding tax from winnings declined by Sh800 million over the same period.
“This mismatch suggests possible manipulation of declared winnings by betting companies,” said Committee Chairperson Kimani Kuria.
“If more money is being staked, logically, there should also be more winnings.”
In July 2024, KRA collected Sh866 million in excise duty, equivalent to a betting volume of Sh5.77 billion. However, only Sh345 million was reported as withholding tax from winnings that month a 27% drop compared to the previous year.
September recorded the highest betting volume in the nine-month period, with stakes totaling Sh8.84 billion and resulting in Sh1.326 billion in excise duty. December followed closely, with Sh1.268 billion collected, reflecting Sh8.45 billion in stakes.
The consistent trend of Kenyans staking over Sh8 billion monthly since September 2024 raised alarm among MPs, who questioned whether declared winnings were being suppressed.
KRA Chief Manager for Betting and Gaming Joseph Otieno attributed the rise in tax revenue to enhanced compliance through automation.
However, he acknowledged the anomaly in withholding tax, attributing it to variations in betting odds that influence payouts.
“I agree there are discrepancies. While winnings are increasing, they’re not rising proportionately to the amount staked. That’s largely due to odds variations, which are regulated by the Betting Control and Licensing Board,” Otieno explained.
From July 2024 to March 2025, the government collected Sh19.6 billion in taxes from gambling activities—15% more than the Sh17 billion collected during the same period the previous year.
Homabay Town MP Peter Kaluma questioned how betting firms continue to post significant profits despite challenging the excise tax. His Karachuonyo counterpart, Adipo Kuome, urged the government to weigh social costs alongside revenue generation.
“We’ve seen youth lose their livelihoods, even take their own lives. Tax policy should not just be about revenue it must also protect society,” said Kuome.
MPs also raised concerns about whether all betting firms operating locally are domiciled in Kenya, and whether KRA has effective mechanisms to track revenues from offshore-based operators.
The committee called for tighter oversight by the Betting Control and Licensing Board and demanded transparency in how winnings and stakes are declared. A detailed analysis of popular games such as Aviator and Jackpot has also been requested to assess compliance.
Additionally, KRA has been tasked with investigating possible tax evasion by foreign-based betting firms operating in the country, following revelations that some offshore entities may have been operating illegally.
