Gambling sector faces reckoning as Kenya targets tax Evasion and money laundering
For years, Kenya’s fast-growing gambling industry has operated under a cloud of controversy, with allegations of tax evasion, money laundering and weak regulatory oversight undermining public confidence in the sector.
Now, the Gambling Regulatory Authority (GRA) says it is preparing to tackle these challenges head-on through a new real-time monitoring system that could fundamentally change how betting firms, casinos and lottery operators are regulated.
The proposed platform will require all licensed gambling operators to integrate their systems with a central monitoring network, giving regulators direct access to transaction data as it happens.
The move is expected to eliminate the long-standing practice where operators primarily relied on self-reporting revenues and betting volumes, a system critics say created opportunities for under-declaration of earnings and tax avoidance.
Speaking during the Gaming Tech Summit Africa in Nairobi, embattled GRA Director-General Peter Karimi who is facing possible ouster said the authority intends to strengthen oversight of an industry that processes billions of shillings annually through digital platforms.
Kenya’s betting market is among the largest in Africa, driven by widespread mobile phone usage and the popularity of online betting platforms.
However, the rapid growth has also exposed significant regulatory weaknesses.
Experts argue that tax evasion in the gambling sector thrives on opaque financial systems, offshore-hosted betting platforms and manipulation of transaction records. Some operators have previously faced accusations of understating revenues, depriving the government of billions of shillings in tax collections.
The concerns extend beyond taxation.
Law enforcement and financial regulators have increasingly identified gambling platforms as potential conduits for money laundering due to the large volumes of cash that move through betting accounts daily. Criminal networks can exploit weak monitoring systems to disguise the origins of illicit funds through multiple betting transactions before withdrawing the money as seemingly legitimate winnings.
The reforms come amid rising gambling tax revenues, with collections increasing from Sh25.24 billion to Sh28.45 billion by April 2026 following changes to the tax regime.
However, industry observers caution that revenue growth alone is not enough. They argue that unless regulators successfully seal loopholes that enable tax evasion, money laundering and illegal gambling operations, the sector will continue to pose significant economic and governance risks.
For the GRA, which recently replaced the Betting Control and Licensing Board, the challenge is clear: prove it can succeed where its predecessor struggled and restore integrity to one of Kenya’s most lucrative but controversial industries.
