Kenyan MPs to vote on gambling probe

Francis Kaguri is awarded a jackpot prize by Esther Kang’ethe of Sportpesa. Members of Parliament will today vote on a motion seeking to establish a select committee to investigate the multi-billion-shilling betting industry. (PHOTO: WILBERFORCE OKWIRI/ STANDARD)

Members of Parliament will today vote on a motion seeking to establish a select committee to investigate the multi-billion-shilling betting industry.

Lawmakers will decide on the formation of the 13-member team, in the shadows of the current legal framework under the Betting, Lotteries and Gaming Act.

They have justified the new investigation that will lead to a legal framework with claims that the betting firms are operating in a legal vacuum.

The Act has provisions on licensing, protection of minors and financial obligations of betting and gaming firms in the country.  

Under the  Act, it is illegal to negotiate bets with minors, send them advertisement messages or employ them in betting premises.

However, betting firms are likely to get away with light punishments in default, as section 28 of the Act provides a fine of Sh3,000 or imprisonment for a term not exceeding three months for involving minors in betting activities.

The Act also prohibits betting in public places, advertising of betting activities and compels betting firms to submit their books of account to the Betting Control and Licensing Board (BCLB) at least once a year. Default attracts a light penalty of Sh10,000 or a jail term of less than one year.

During debate on the motion last week, lawmakers argued that other than drawing in minors to their activities, betting and gaming companies have not been paying taxes on accrued revenue.

They blamed a weak legal regime for current gaps in betting regulations.

Another Bill

Other than the current motion, the issue of tax remission is also contained in another government-sponsored legislative proposal, currently awaiting debate in Parliament.

The Betting, Lotteries and Gaming (Amendment) Bill, 2015, seeks to compel betting firms to remit 7.5 per cent of their total betting revenue to the Government and even specifies the exact date such taxes should be surrendered.

People who win prize competitions will also be expected to remit taxes should the Bill become law. Currently, winners go home with the whole booty

"There shall be a tax known as prize competition tax chargeable on the cost of entry to a competition which is premium rated at the rate of 15 percent of the total gross turnover," reads the provision.

The twin efforts are the latest attempts to rein in betting firms, which last year moved to court to protest the introduction of a 20 per cent withholding tax through amendments to the Finance Act, 2013.