NAIROBI – Kenya's online gambling industry has exploded into a multi-billion shilling behemoth, profoundly reshaping the nation's economic and social landscapes. Driven by unprecedented mobile penetration and a youthful, tech-savvy population, the sector is projected to generate approximately US$831.80 million (KSh 108.1 billion) in revenue in 2025, with forecasts predicting a market volume of US$1.03 billion by 2029. This rapid expansion, however, presents a dual-edged sword for the country: a significant source of tax revenue on one hand, and a burgeoning public welfare crisis on the other.

The Regulatory Tightrope

In response to escalating concerns over addiction and its societal impact, Kenyan authorities have initiated a sweeping overhaul of the industry's regulatory framework. On August 20, 2025, President William Ruto signed the Gambling Control Act, 2025, into law, replacing the archaic 1966 legislation. This new act establishes the Gambling Regulatory Authority (GRA), which succeeds the former Betting Control and Licensing Board (BCLB), aiming to introduce stricter oversight. Peter Mbugi, the Acting Director General of the GRA, stated in October 2025 that the new law marks a "historic milestone" designed to address the complexities of the modern online gaming landscape.

Recent regulatory actions have been aggressive. In May 2025, the BCLB, in a multi-agency operation, announced a 30-day suspension of all gambling advertisements to formulate new guidelines. The subsequent rules, unveiled in late May and early June 2025, imposed stringent restrictions, including a ban on celebrity endorsements, mandatory health warnings, and the pre-approval of all marketing content by the BCLB and the Kenya Film Classification Board (KFCB). Further proposals presented to the National Assembly in July 2025 seek to mandate selfies for identity verification to curb underage gambling and significantly increase the minimum capital requirements for operators.

Economic Engine vs. Social Drain

The economic contributions of the betting industry are substantial. The Kenya Revenue Authority (KRA) reported collecting KSh 19.6 billion (US$150 million) in excise and income taxes from the sector in the 2024/25 fiscal year. Between July 2024 and March 2025 alone, the total amount staked surged by over 17% to KSh 75.18 billion. This revenue stream is bolstered by a revised tax regime under the Finance Bill 2025, which, while reducing the excise duty on stakes from 15% to 5%, shifted the point of taxation to the moment funds are transferred from a mobile wallet to a betting account, a move designed to capture revenue from foreign-based operators. Betting companies are also required to withhold 20% of winnings and pay a 15% tax on gross gaming revenue.

This economic boom is inextricably linked to the rise of mobile money. Platforms like Safaricom's M-Pesa have become the backbone of the industry, enabling seamless, instant, and micro-transactions that make betting accessible to millions. However, this convenience fuels a darker side. Studies and reports highlight a severe social cost, with rising cases of gambling addiction, debt, and mental health crises, particularly among unemployed youth who view betting as a source of income. Research has documented a negative effect on the welfare of young participants, with some studies showing that nearly 70.9% of student gamblers borrow money to fund their activities. Tragic incidents of suicide linked to betting losses have been reported, underscoring the devastating human toll of the crisis.

The Path Forward

The Kenyan government stands at a critical juncture, tasked with balancing the industry's economic potential against its profound social risks. The new Gambling Control Act and the GRA's mandate to integrate technology like AI for real-time monitoring represent a significant step towards a more controlled environment. The state's ability to enforce these new regulations—from advertising restrictions to shutting down unlicensed operators—will be paramount. As the market continues its rapid growth, the effectiveness of these measures will determine whether Kenya can harness the economic benefits of online gambling without sacrificing the well-being of its most vulnerable citizens. FURTHER INVESTIGATION REQUIRED.