Betting tax in Kenya 2026: 5% deposit + 5% stake + 5% withdrawal

Kenyan betting tax was overhauled in 2025 under the Finance Act 2025 and the Gambling Control Act 2025. The headline changes: the 20% withholding tax on winnings was scrapped and replaced by a flat 5% withdrawal tax on all withdrawals; a new 5% deposit tax was introduced; and the existing stake excise was reduced from 15% to 5%. The regulator changed too, the Betting Control and Licensing Board (BCLB) was replaced by the Gambling Regulatory Authority (GRA) under the new Act.

The three taxes that apply to bettors

1. Deposit tax, 5% on every deposit

New under the Finance Act 2025. When you fund your betting wallet from M-PESA via a paybill, 5% of the deposit amount goes to KRA as excise duty. The operator deducts this before the deposit lands in your wallet.

For a KES 100 M-PESA deposit, KES 5 is taken as deposit excise; KES 95 lands in your betting wallet. (The M-PESA paybill fee is a separate cost on top.)

2. Stake excise duty, 5% on every stake

When you place a bet, 5% of the staked amount goes to KRA as excise duty. The operator deducts this before the bet is placed. This rate was reduced from 15% in 2024 down to 5% under the Finance Act 2025.

For a KES 100 stake, KES 5 goes to excise; KES 95 is the effective stake placed.

3. Withdrawal tax, 5% on every withdrawal

New under the Finance Act 2025. When you withdraw from your betting wallet to M-PESA or bank, 5% of the withdrawal amount goes to KRA. This applies regardless of whether the withdrawal represents profit, your original stake, or both.

Critically: this replaces the previous 20% withholding tax on winnings. Under the old regime, only winnings above KES 5,000 attracted withholding (at 20%). Under the new regime, every withdrawal attracts 5%, but the rate is much lower.

Worked examples

Example 1: small loss

You deposit KES 200 from M-PESA. Deposit tax: 5% × KES 200 = KES 10. Wallet balance after deposit: KES 190. You stake KES 190 at odds 2.0. Stake excise: 5% × KES 190 = KES 9.50. Effective stake: KES 180.50. The bet loses. Wallet balance falls to KES 0. Total cost to you on the failed bet: KES 200 (the M-PESA paybill fee on the deposit was a separate expense).

Example 2: small win

Same setup, but the bet wins. Effective stake KES 180.50 × 2.0 = KES 361 returned to wallet. You withdraw the KES 361 to M-PESA. Withdrawal tax: 5% × KES 361 = KES 18.05. Net to M-PESA: KES 342.95. Of your original KES 200 deposit, you're up KES 143 net (versus the old 20% withholding regime where you would have been up about KES 132 because the small winning was below the KES 5,000 threshold for withholding).

Example 3: big win

You deposit KES 5,000. Deposit tax: KES 250. Wallet: KES 4,750. Stake KES 4,750 at odds 8.0. Stake excise: KES 237.50. Effective stake: KES 4,512.50. Bet wins. Gross return to wallet: KES 4,512.50 × 8.0 = KES 36,100. You withdraw the KES 36,100 to M-PESA. Withdrawal tax: 5% × KES 36,100 = KES 1,805. Net to M-PESA: KES 34,295.

Compare to the old regime: under 15% stake excise + 20% withholding above KES 5,000, the same bet would have netted around KES 30,600 (calculated in the legacy way: 15% stake excise = KES 750, effective stake KES 4,250, gross return KES 34,000, winnings KES 28,750 above the threshold, 20% withholding = KES 5,750, net KES 28,250). The new regime is meaningfully more generous to bettors on bigger wins.

Example 4: accumulator

You deposit KES 1,050. Deposit tax: KES 52.50. Wallet: KES 997.50. Place an 8-leg accumulator at combined odds of 100. Stake KES 997.50, stake excise KES 49.88, effective stake KES 947.62. Accumulator lands. Gross return: KES 94,762. Withdraw, withdrawal tax 5% = KES 4,738. Net to M-PESA: KES 90,024.

The effective tax rate on a typical bettor

Under the new triple-5% regime, on a deposit-stake-withdraw cycle:

• Deposit KES 100 → wallet receives KES 95 (5% deposit tax)
• Stake KES 95 → effective stake KES 90.25 (5% stake excise)
• If you win and withdraw the KES 90.25 × odds back: 5% withdrawal tax

For a single losing bet: total tax burden 5% (deposit) + 5% of remaining stake (=4.75% of original deposit) = ~9.75% of the original deposit, before the bet runs.

For a winning bet with withdrawal: deposit tax + stake excise + withdrawal tax = a compounded effective rate that varies by win size. For a typical 2.0-odds win, the all-in tax burden is roughly 13-14% of the original deposit.

Compared to the old 15% stake excise + 20% withholding regime, most casual bettors are slightly better off under the new rates. Heavy losers pay slightly more (because of the new deposit tax), and big winners pay much less (because the 20% withholding has been replaced by 5%).

What operators pay

Beyond the bettor-side taxes, operators pay:

• 15% Gross Gaming Revenue (GGR) tax, payable monthly to KRA. GGR = stakes received minus winnings paid out.
• 1% monthly addiction-rehab levy on gross revenue, new under the Gambling Control Act 2025, ring-fenced for funding gambling-addiction rehabilitation programs.
• 30% corporate income tax on operator profit.
• Standard PAYE and VAT on operator staff and procurement.

These don't hit the bettor directly, but they affect the odds operators offer. Higher operator-side tax burden tends to push odds slightly less generous over time.

New regulatory rules under the Gambling Control Act 2025

Beyond taxes, the Act introduced several player-protection and operator-conduct rules:

• Minimum bet of KES 20 on online platforms, intended to discourage micro-stake reckless betting.
• KES 200 million security deposit required from online betting operators as a condition of licence.
• Advertising restrictions: celebrity and influencer endorsements of gambling are banned. Adverts must include responsible-gambling warnings and the GRA helpline.
• National ID + live selfie verification required for all bettor accounts. Operators face penalties for allowing under-18 betting.
• GRA replaces BCLB as the licensing and supervisory authority. See our GRA explainer.

How betting tax has changed in Kenya

• Pre-2018: light tax regime; market grew rapidly with limited consumer protection.
• 2019: 20% excise on stakes introduced. 20% withholding on winnings. Mass migration to offshore operators.
• 2020: excise temporarily reduced to 7.5%.
• 2021-2024: excise restored to 15%, plus 20% withholding on winnings above KES 5,000.
• 2025 (Finance Act 2025): excise on stakes reduced to 5%; new 5% deposit tax; 20% withholding on winnings replaced by 5% withdrawal tax.
• 2026 (current): the 5% / 5% / 5% triple structure is in effect. GRA replaces BCLB. Gambling Control Act 2025 regulatory rules apply.

Do I declare betting income to KRA?

For individual bettors, the operator-deducted taxes (deposit, stake, withdrawal) satisfy the tax obligation at source. No additional declaration is required for winnings already taxed via the withdrawal route. KRA may still ask for a source-of- funds explanation for very large irregular gains (e.g., when buying property), in which case operator tax certificates are the relevant evidence.

For bettors using offshore operators that don't apply Kenyan tax, technically you owe Kenyan income tax on net winnings. KRA enforcement on this is light for individual bettors but increasingly cross-referenced with bank inflows.

Bottom line

Three 5% taxes for bettors. The biggest behavioural implication of the new regime: the deposit tax means every shilling you put into a betting wallet is already 5% smaller before any bet. The smartest financial response is the same as before, set a small deposit limit on your operator and stick to it. Lower deposits mean lower aggregate tax burden and lower aggregate losses.

For more on healthy use, the GRA helpline (0800 222 333), and self-exclusion, read our responsible gambling guide.

Resources

• Responsible gambling, limits, signs, support
• GRA, what replaced BCLB
• Betika paybill explained
• Paying KRA via M-PESA
• KRA, Kenya Revenue Authority
• GRA, Gambling Regulatory Authority