How tax applies to money you deposit into and withdraw from a betting account
Two taxes touch a player's money. Excise duty is five per cent of the amount deposited into a betting or gaming wallet (Excise Duty Act, First Schedule, Part II, paras 4A and 4B). Withholding tax is five per cent of withdrawals made by punters (Income Tax Act, Third Schedule, Head B, para 5(i)).
Where the tax sits in the life of a deposit
Money in a player account passes two tax points. The first is on the way in, when you move money from a wallet to the operator, as described in the guide on how a mobile-money deposit reaches a player account. The second is on the way out, when the operator pays money back to you.
Neither tax depends on whether a bet wins. One is measured on what you put in, the other on what you take out. Together they mean that money cycled through a gambling account shrinks even before any bet is settled, which is one more reason gambling cannot sensibly be treated as a source of income.
The annotations on Kenya Law show that these provisions were amended in 2021, 2023, 2024 and 2025. The figures on this page were read on Kenya Law on 4 October 2026 in the versions named in the sources list. Check the current text before you rely on them, and ask the Kenya Revenue Authority or a qualified adviser about your own position. This page is not tax advice.
The provisions at a glance
| Tax | Charged on | Rate in the statute | Provision |
|---|---|---|---|
| Excise duty, betting | The amount deposited into a customer's betting wallet (not horse racing) | Five per cent | Excise Duty Act, First Schedule, Part II, para 4A |
| Excise duty, gaming | The amount deposited into a customer's gaming wallet | Five per cent | Excise Duty Act, First Schedule, Part II, para 4B |
| Excise duty, prize competition | The amount paid or charged to participate | Five per cent | Excise Duty Act, First Schedule, Part II, para 4C |
| Excise duty, lottery (excluding charitable lotteries) | The amount paid or charged to buy the ticket | Five per cent | Excise Duty Act, First Schedule, Part II, para 4D |
| Withholding tax, withdrawals (resident) | Withdrawals made by punters | Five per cent | Income Tax Act, Third Schedule, Head B, para 5(i) |
| Withholding tax, withdrawals (non-resident) | Withdrawals made by punters | Five per cent | Income Tax Act, Third Schedule, Head B, para 3(i) |
| Withholding tax, winnings | A pay-out from a lottery or prize competition by a licensed person | Twenty per cent | Income Tax Act, s.2; Third Schedule, Head B, paras 3(y) and 5(r) |
Excise duty: charged when money goes in
The Excise Duty Act treats betting and gaming as excisable services. Paragraph 4A of Part II of the First Schedule reads: "Excise duty on betting shall be five percent on the amount deposited into a customer's betting wallet", with a proviso that the paragraph does not apply to horse racing. Paragraph 4B uses the same words for a gaming wallet.
The Schedule also defines the phrase. The "amount deposited into a customer's betting wallet" means the amount of money transferred by a customer into the customer wallet maintained by a licensed betting and gaming operator for betting and gaming purposes. The annotations on Kenya Law show that these paragraphs were last amended by Act No. 9 of 2025.
The operator, not the player, sends the duty to the revenue authority. Section 36A requires excise duty on betting and gaming offered through a platform or other medium to be remitted "within twenty-four hours from the closure of transactions of the day", and defines that closure as midnight.
Withholding tax: charged when money comes out
The Income Tax Act now uses two separate terms. "Withdrawals" means any amount of money, cash equivalent or money's worth paid or disbursed to the account of a player by a person licensed under the Gambling Control Act, 2025. "Winnings" means a pay-out from a lottery or prize competition by such a person.
Section 35 requires the payer to deduct tax from both: withdrawals appear in s.35(1)(i) for non-residents and s.35(3)(h) for residents. The rates are in the Third Schedule. For withdrawals made by punters the rate is five per cent for residents and non-residents alike. For winnings, in the lottery and prize competition sense, it is twenty per cent.
Two further details are worth knowing. Under s.35(5) the person who deducts the tax must remit it within five working days and must give the person paid a certificate stating the payment and the tax deducted. Under s.35(5A) the tax deducted from withdrawals is paid into the Sports, Arts and Social Development Fund.
The timing of the payment itself is a separate matter, covered in the guide on how long an operator has to pay a prize or withdrawal.
Illustrative example
The figures below are arithmetic only. They apply the statutory percentages to round numbers and ignore wallet charges, which the mobile-money provider sets. How an operator presents the deductions on screen is described in its own terms.
- Deposit
A player transfers KES 1,000 into a betting wallet. Excise duty at five per cent of the amount deposited is KES 50.
- Withdrawal
Later the player withdraws KES 2,000. Withholding tax at five per cent of the withdrawal is KES 100, so KES 1,900 is paid out before any wallet charge.
- The same sums with no bets at all
If money were deposited and then withdrawn again without a single bet, both taxes would still apply. A player account is not a place to store money.
How to check the deductions on your own account
- Read the tax section of the operator's terms
Regulation 4(2)(l) of the Conduct of Gambling Operations Regulations requires an operator's approved terms and conditions to cover "payment of eligible taxes and statutory deductions". Section 72(6)(b) of the Gambling Control Act, 2025 separately requires disclosure of any processing fee.
- Compare the wallet message with the account credit
The mobile-money confirmation shows what left your wallet. The player account history shows what was credited and any duty recorded against it.
- Do the same on a withdrawal
Compare the amount requested, the tax shown and the amount that arrives in the wallet. Section 75 of the Gambling Control Act limits what a licensee may take from a player's balance to wagers, remittances at the player's request and bank charges.
- Ask for the record
If a deduction is not explained, ask the operator's customer care centre for the breakdown and for the withholding certificate that s.35(5)(b) of the Income Tax Act provides for.
- Re-read the law after any amendment
Kenya Law marks each consolidated Act with the date of the version. If the version date is later than the one in the sources list below, the rate may have changed.
What this page does not cover
Operators carry further obligations that do not appear on a player's statement. Section 121(6)(a) of the Gambling Control Act, 2025 keeps in force the provisions of the repealed Betting, Lotteries and Gaming Act on betting tax, gaming tax, lottery tax and prize competition tax "until new provisions are enacted". This guide does not describe those provisions.
Operator reporting is part of the wider system of oversight: the regulator's real-time monitoring framework is described in the glossary entry on the gambling control system. Whether a deduction from a withdrawal settles your own tax position in full is a question for the Kenya Revenue Authority or an adviser, not for a reference page.
The Kenya Revenue Authority's own withholding tax page, read on the same day, shows a single line for "winnings from betting, gaming, prize competition, gambling" at 20%. That wording does not separate withdrawals from lottery and prize competition pay-outs in the way the consolidated statute does. This page follows the statute text and records the difference so that you can check both.
Questions and answers
Is excise duty charged on my stake or on my deposit?
On the deposit. The Excise Duty Act, First Schedule, Part II, paragraph 4A reads: excise duty on betting shall be five percent on the amount deposited into a customer's betting wallet, with a proviso that the paragraph does not apply to horse racing. Paragraph 4B says the same for a gaming wallet.
What does the Income Tax Act mean by withdrawals?
Section 2 defines withdrawals as any amount of money, cash equivalent, or money's worth paid or disbursed to the account of a player by a person licensed under the Gambling Control Act, 2025.
Why does the KRA website show 20% for winnings?
The withholding tax table on the Kenya Revenue Authority website, read on 4 October 2026, lists winnings from betting, gaming, prize competition and gambling at 20% for residents and non-residents. The Income Tax Act as consolidated on Kenya Law (version dated 1 July 2026) defines winnings as a pay-out from a lottery or prize competition and taxes them at twenty per cent, while withdrawals made by punters are taxed at five per cent. Where the two differ, the statute text is the authority; ask KRA if you need a ruling for your case.
Who pays the tax over to KRA?
The operator. Section 36A of the Excise Duty Act requires excise duty on betting and gaming offered through a platform to be remitted within twenty-four hours from the closure of transactions of the day. Section 35(5) of the Income Tax Act requires a person who deducts withholding tax to remit it within five working days.
Do I pay tax even if I lose?
Excise duty is charged on the amount deposited, so it applies whatever the result of any bet. Withholding tax applies to amounts withdrawn.
Can I get proof of the tax deducted from a withdrawal?
Section 35(5)(b) of the Income Tax Act requires the person deducting tax to furnish the person paid with a certificate stating the amount of the payment and the amount of the tax deducted.
Sources
- Excise Duty Act (Cap. 472), ss.4, 36A and First Schedule, Part II, paras 4A-4D, Kenya Law (version dated 1 July 2025, marked latest), accessed 2026-10-04
- Income Tax Act (Cap. 470), ss.2, 35 and Third Schedule, Head B, paras 3 and 5, Kenya Law (version dated 1 July 2026), accessed 2026-10-04
- Kenya Revenue Authority: withholding tax, accessed 2026-10-04
- Gambling Control Act, 2025 (No. 14 of 2025), ss.72, 75, 121, accessed 2026-10-04
- Gambling Control (Conduct of Gambling Operations) Regulations, 2026, r.4, accessed 2026-10-04