The Finance Act 2026 has once again changed how winnings from betting, lotteries, gaming, and prize competitions are taxed.
Under the Finance Act 2025, the focus shifted to withdrawals from betting accounts. However, the Finance Act 2026 changes this approach by reintroducing the taxation of winnings.
What Is a Withdrawal?
A withdrawal is money a player transfers from a betting wallet or gaming account to a bank account, M-Pesa, or another payment method.
What Are Winnings?
According to the Kenya Revenue Authority (KRA), winnings include money won, spoils, profits, or proceeds of any kind that refer to the amount or payment of winnings.
This applies to payouts governed under the Betting, Lotteries and Gaming Act, including betting, lotteries, gaming, and prize competitions.
What Is the Effect of This Change?
According to KRA, Withholding Tax will now be imposed on gross winnings payable across the sectors governed by the Betting, Lotteries and Gaming Act.
The tax event arises when winnings are paid, rather than when funds are later withdrawn from a betting account.
Practical Example
Mary places a football bet using KSh 1,000. She wins, and the betting company credits her account with KSh 5,000. Under the Finance Act 2026, the focus is on the winnings credited to Mary, rather than when she later transfers the money to M-Pesa or her bank account.
Key Takeaway
- The Finance Act 2026 reintroduces taxation of winnings.
- Winnings include money won, spoils, profits, or proceeds from betting, lotteries, gaming, and prize competitions.
- According to KRA, WHT applies to gross winnings payable.
- Players and licensed operators should monitor further KRA guidance on implementation.
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