Taxation and advertising - The biggest challenges facing the new Gambling Regulatory Authority

The Kenyan gambling industry is entering into a new phase, with the Gambling Regulatory Authority (GRA) taking over from the Betting Control and Licensing Board (BCLB) as the main regulatory body.

The BCLB did a good enough job, establishing Kenya as one of the best regulated gambling markets in Africa, but there is still plenty of work to be done to further clean up the multi-million dollar sector.

As a new institution, the GRA must build credibility and trust among both the public and industry stakeholders.

Any perceived inconsistency, inefficiency, or lack of transparency could undermine confidence in the authority and hinder its effectiveness.

The stakes are very high. Created under the Gambling Control Act, 2025, the new authority is expected to bring modern oversight to a fast-evolving, technology-driven industry, balancing growth with responsibility.

One of the biggest challenges facing the GRA is the taxation of the industry. Kenya has frequently adjusted its gambling tax policies, including taxes on gross gaming revenue, deposits, and withdrawals.

It has become a very volatile and controversial issue, leading to the closure of some of the biggest operators in the country.

The customers have also felt the brunt of Kenya's tax laws, having to pay taxes on all deposits and withdrawals. The quest to avoid paying these taxes has pushed many bettors to offshore sites.

In fact, in a desperate move to keep hold of customers, some licensed companies are now offering to pay the taxes on behalf of their visitors, thus appearing as though they are tax-free betting sites.

How does the new GRA find that balance between extracting the maximum tax revenue from the lucrative industry and maintaining the growth of the sector?

That is the major challenge - to somehow juggle all of these factors together, and arrive at a conclusion that creates optimal conditions for all stakeholders.

While Kenya was able to generate decent revenue from betting taxes under the BCLB, there was plenty that slipped away. The GRA now has the responsibility of plugging this hole and ensuring full tax compliance.

Illegal gambling remains a persistent problem in Kenya, with many offshore operators still able to target Kenyan users without obtaining local licenses.

Tackling this problem is easier said than done. Cross-border enforcement is complex, often requiring international cooperation and advanced technological tools.

To be effective, the authority must invest heavily in advanced monitoring systems capable of tracking real-time transactions and identifying suspicious behavior.

This requires both financial resources and technical expertise; two areas where new institutions often struggle initially.

Another major issue the GRA must deal with is advertising. Gambling advertising has become a contentious issue in Kenya, particularly due to concerns about youth exposure and addiction.

The government has previously imposed restrictions, like cutting down advertising time on radio and television; and banning celebrities from promoting gambling companies, but these regulations haven't always gone down well with stakeholders.

The media feel like they are being shortchanged and prevented from maximising revenue they can extract from betting advertisements, while celebrities have argued that they deserve a share of the money going around in the industry.

And for the betting companies, they need as much advertising as they can get in order to reach new customers.

It is now the responsibility of the GRA to navigate this sensitive area by setting clear guidelines that protect the public while allowing legitimate operators to market their services.

Beyond advertising, the authority is also responsible for promoting responsible gambling and mitigating social harm.

This includes addressing issues such as addiction, financial distress, and the impact of gambling on vulnerable populations.

Balancing commercial interests with public health concerns is one of the most difficult aspects of gambling regulation.

The Gambling Regulatory Authority of Kenya represents a bold step toward modernizing the country’s gambling sector.

With a broader mandate and stronger enforcement powers, it has the potential to create a more transparent, accountable, and responsible industry.

However, the challenges it faces are significant. From ensuring tax compliance to addressing social concerns, the GRA must navigate a complex and high-stakes environment.

Ultimately, its success will depend on how effectively it can build capacity, leverage technology, and foster collaboration among stakeholders.

If these challenges are addressed, the GRA could set a benchmark for gambling regulation in emerging markets.

If not, it risks becoming just another institutional reform that fails to deliver meaningful change.

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