The High Court in Kakamega has dismissed a petition challenging the imposition of a 12.5 per cent excise duty on the amount staked by participants in betting activities, delivering a major blow to the gambling community.
The petition, filed on August 21, 2023, by Edward Okwama, sought to nullify certain clauses of the Excise Duty Act, 2015, as amended by the Finance Act, 2023. Okwama argued that the levy amounted to double taxation, as gamblers are also subject to a 20 per cent withholding tax on winnings. He further claimed the provisions were discriminatory, thus violating Article 27 of the Constitution.
In his ruling, Justice Stephen Mbungi rejected these arguments, stating that the excise duty did not breach the Constitution and could not be classified as double taxation.
“It is a cardinal principle of the law on interpretation of a statute that all the provisions of the statute should be read holistically but not in isolation,” Justice Mbungi noted.
He explained that there is a clear distinction between the taxes in question. Under Section 29(a) of the Betting Lotteries and Gaming Act (Cap 131), Gross Gaming Revenue is a separate tax levied on betting companies, while excise duty is charged directly to punters.
“Therefore, it cannot amount to double taxation. Similarly, it is not the same tax,” he ruled.
The verdict comes shortly after President William Ruto assented to the Gambling Control Bill, 2023, introducing stricter regulation in the betting industry. Among its provisions is a minimum betting stake of Ksh20, with hefty penalties for operators who allow smaller wagers. Offenders risk fines of at least Ksh5 million or imprisonment for up to five years.
With the High Court’s decision, the government’s tighter grip on the gambling sector gains momentum, a shift likely to reshape Kenya’s betting landscape in the months ahead.
