Economy
New law forces gamblers to save with every bet placed
Tuesday March 28 2023
Devki Group of Companies chairman, Dr Narendra Raval (Guru). FILE PHOTO | JEFF ANGOTE | NMG
The government will slash a chunk of the billions staked every year from punters and channel them into a compulsory Hustler Fund-style savings kitty promoted by President William Ruto’s administration as a way of developing a savings culture among Kenyans.
Punters will also stake a minimum of Sh20 through online gambling in the proposed changes to gambling rules by the Presidential Taskforce on the establishment of a National Lottery.
The new Bill proposes to carve out part of the wagered amount for savings which will be determined by the new Gambling Regulatory Authority in consultation with the Interior Cabinet Secretary.
“A player in the online gambling activity shall not bet an amount less than twenty shillings in a competition. The minimum amount shall be inclusive of such saving component for the player as shall be determined by the Authority in consultation with the Cabinet Secretary,” says the draft Gambling Control Bill.
Read: Court quashes betting tax, limit on gambling in 5-star hotels
The Bill, which targets the millions of Kenyans who bet every year, is the latest tool by the Ruto administration to enforce savings in the informal sector after the Hustler Fund, which has so far collected more than Sh1 billion.
The new Bill, if approved, will replace the Betting, Lotteries and Gaming Act.
The proposal to force punters to save with every bet they place will add to the deductions and taxes placed on the gambling and betting industries.
For instance, wagered amounts currently attract tax at the rate of 7.5 percent while winnings attract withholding tax at the rate of 20 percent.
The new proposals have, however, retained the gambling tax (currently known as the betting) tax at 15 percent of the revenue generated by the betting and gambling firms.
The firms shall nevertheless be required to pay a monthly gambling levy to the Gambling Regulatory Authority at the rate of no more than one percent of the monthly gross gambling revenue.
Operators risk penalties of up to Sh5 million or an imprisonment term of up to six years for contravening the order by permitting a person to engage in online gambling activity for an amount less than the prescribed Sh20.
The operators shall be tasked with registering participants in online gambling and putting in place measures to ensure that minors are not registered, including having to request for proof of age.
The proposed law describes online gambling as any form of communication undertaken through remote communication and shall see operators licensed as either online bookmakers, online lotteries or online casinos.
Read: State to scrap betting board, replace it with an authority
The operators will be required to set a gambling control system that shall capture key operational disclosures, including online security, safety and security against criminal activities, online payment ecosystem, protection measures against vulnerability and gambling and underage gambling, awareness and education and responsible advertising.
The Gambling Regulatory Authority shall be expected to facilitate real-time monitoring of gambling and make the same available to the Communications Authority of Kenya (CA) and other relevant government agencies.
“In the case of mobile online gambling, lottery or a betting licence, particulars of network connectivity with two links to mobile operators shall be provided to the Authority [CA],” the draft bill reads further.
Operators are expected to pay out prize money within two days and within seven days for non-monetary prizes.
The proposal to repeal the 1966 Betting, Lotteries and Gaming Act is part of the presidential taskforce’s mandate to reform the sector.
“The task force is mandated to propose reforms that seek to regulate the betting and gaming sector, which has over a period of time been the subject of extreme opinion and controversy, with the primary objective being to transform the sector into a force for social progress, anchored on the necessary safeguards that assure a responsible gambling environment,” said the taskforce’s chairperson, Narendra Raval.
The task force has opened the proposed legislative framework, including a National Gambling Policy and a draft National Lottery Bill, to public participation beginning next Monday.
President Ruto appointed the task force on February 16 to, among others, examine the existing administrative, institutional, policy and legislative structures and systems in the betting and gaming industry.
The proposed National Lottery is expected to shore up funding for sports, culture and arts and boost current funding provided through the Sports Arts and Social Development Fund.
