Millions of gamblers will soon be forced to cede a portion of their betting stakes to the Social Health Insurance Fund (SHIF) and pension in line with legal changes that will make gambling costlier.
The Gambling Control Act 2025 gives the betting regulator powers to develop policies that will include, among other things, a mandatory savings component for SHIF or social retirement benefit for every betting stake.
A mandatory pension contribution or payment to SHIF will make betting costlier given that gamblers also pay 15 percent excise tax and 20 percent withholding tax for each winning bet.
This is likely to increase the pool of SHIF members and ultimately grow contributions to the scheme, on which the State is relying on to provide medical cover for all Kenyans.
According to previous estimates, there are more than 12 million gamblers in the country.
All Kenyans are required to enrol with SHIF and pay their contributions, with formal workers paying at rate of 2.75 percent of their monthly pay, while the same rate applies to households in the informal sector.
However, the Gambling Control Act 2025 does not say what will happen to gamblers who are already contributing to SHIF, either as salaried workers or under the household category.
“The Authority (Gambling Regulatory Authority of Kenya) shall develop policies for placing of bets for betting, lotteries and gambling that include a savings component for social health insurance or social retirement benefit,” the Gambling Control Act 2025 says.
“The minimum amount set under subsection (1) shall be inclusive of such a saving component for the player as shall be determined by the Authority in consultation with the Cabinet Secretary.”
Impact of levies
The State has progressively increased the 20 percent withholding tax and 15 percent excise tax levied on gambling over the years as part of its efforts to discourage gambling.
Compulsory SHIF or pension deductions from every betting stake will provide the government a windfall, given that punters place bets worth more than Sh150 billion every year.
These mandatory SHIF contributions come at a time when the State health insurer is grappling with a Sh76 billion unpaid bill to both private and public medical facilities.
The government is also keen to encourage a savings culture, especially among those working in the informal sector, as evidenced by the latest push to deduct money from betting stakes.
The newly formed Gambling Regulatory Authority of Kenya, the successor to the Betting Control and Licensing Board, is currently drafting regulations on the mandatory SHIF or pension contributions.
Increased betting levies are intended to reduce the appeal of the craze that has over the years turned into an addiction for millions of Kenyans seeking quick cash to foot bills.
According to a joint report by the Central Bank of Kenya and the Kenya National Bureau of Statistics, an estimated 40.4 percent of Kenyans aged between 18 and 45 years are actively betting.
Last year, gamblers spent an average of Sh1,825 on betting a month, with most of them viewing it as a source of income.
The 2024 FinAccess Household Survey also shows that younger, more educated individuals bet more than their rural peers.
Kenya is home to the largest number of youthful gamblers on the continent, at 76 percent, ahead of bigger economies like Nigeria and South Africa.
However, the increased taxes have failed to halt the gambling craze with more betting firms joining the fray to cash in on the billions of shillings that gamblers spend in pursuit of quick returns.
The minimum betting amount is Sh20, but the mandatory SHIF or pension savings mean gamblers must have more money in their betting accounts before placing a bet.
Currently, there are 188 licensed betting firms operating in the 2025/26 financial year, up from 100 three years ago, with the growth defying the steep taxation regime that has forced others to exit the Kenyan market.
Betting firms pay 15 percent tax on their gross gaming revenue, which is remitted to the Kenya Revenue Authority by 1am each day. They also pay a corporate tax of 30 percent on their profits.
