• CR Advocates LLP
• Intellectual Property, Uncategorized
• April 7, 2023

INSIDE THE WORLD OF GAMBLING IN KENYA: A COMPREHENSIVE GUIDE TO LICENSING REQUIREMENTS FOR BETTING COMPANIES

Are you ready to take a gamble? Kenya certainly is, with a booming gambling industry that has taken the nation by storm. But with dozens of companies offering their services, how can you be sure that you’re playing with a licensed and registered operator? In this article, we’ll take a closer look at the gambling industry in Kenya, exploring the key players licensing and regulations that govern them. So sit back, place your bets, and let’s see what the odds have in store for us.

In this article, we will delve into the world of gambling in Kenya, specifically focusing on the registration and licensing requirements for betting companies. Whether you’re a player, an investor, or just curious about the legal framework that governs the betting industry, read on to learn more.

PART A: INTRODUCTION

Gambling in Kenya has become a popular activity with the growth of the betting industry. As a result, there has been an increase in the number of companies providing betting services in Kenya. In this legal opinion, I will examine the requirements for licensing of gambling companies in Kenya.

PART B: CATEGORIES OF GAMBLING

The following are the main categories of betting in Kenya:

1. Public Gaming
2. Public lottery (short-term)
3. Public lottery (long-term)
4. Bookmakers
5. Totalizator

6. Public Gaming

   Public gaming refers to casinos and the activities carried out therein such as slot machines and table games. Casino gaming means any and all table and casino-style games played with cards. Casino gaming or “game” means baccarat, blackjack, twenty-one, poker, craps, dice, slot machines, roulette wheels, Klondike tables, punchboards, faro layouts, numbers of tickets, push cards, jar tickets, or pull tabs, and any other activity that is authorized by the Board as a wagering game or device under this chapter. “Casino gaming” or “game” includes on-premises mobile casino gaming.

7. Public lottery (Short-Term)

   This is a public lottery conducted for a specific charitable purpose by a registered institution or organization for a period of 3 months. The public takes part in lotteries by buying raffle or lottery tickets, draws are conducted to determine the winners who are awarded with prizes.

8. Public lottery (Long-Term)

   Public Lotteries are conducted by registered institutions or organizations to raise funds for charitable purposes under section 36 of the Act and must be for a charitable cause that is on-going. The long-term public runs for a period of one year or more. The public takes part in lotteries by buying raffle or lottery tickets, draws are conducted to determine the winners who are awarded prizes.

9. Bookmakers

   A bookmaker in this case implies sports betting, pool betting schemes and Totalizators. A bookmaker facilitates gambling most commonly on sporting events like football. A bookmaker accepts and pays off bets on sporting and other events at agreed-upon odds.

10. Totalizator

    This is a form of betting where participants compete by predicting the outcome of sporting events such as horse racing or football. The winners paid based on the amount of money they played. An organization markets itself by giving prizes to those who participate in its activities to boost its sales.

PART C: REGULATORY FRAMEWORK

The regulatory framework for betting companies in Kenya is governed by the Betting, Lotteries, and Gaming Act (Cap 131) Laws of Kenya. The act establishes The Betting Control and Licensing Board (BCLB) which is the primary body responsible for issuing and renewing licenses for betting companies in Kenya. The board ensures that all licensed companies comply with the provisions of the Act and its regulations.

PART D: LICENSING REQUIREMENTS

• Requirements for licensing Public Gaming

1. 1. The applicant is to complete the prescribed form.
   2. Submit a detailed concept for the proposed Business.
   3. Payment of:-
      • Application fee Kshs. 1,000,000/-
      • Investigation fee:
        1. Local Director 250,000/-
        2. Foreign Director 1, 000,000/-

Note: These fees are paid upfront and are non-refundable.

1. 4. The proposed operating name of the business if different from the registered one.
   5. Business form (sole Proprietorship of the joint venture).
   6. Names of Directors and shareholders to be supported by a current CR12.
   7. A PIN certificate and Tax compliance certificate from Kenya Revenue Authority.
   8. A copy of the certificate of incorporation or registration as the case may be.
   9. Certificate of Good Conduct for the Company Directors.
   10. Memorandum and articles of association for your company whose objects must among others include gaming.
   11. Evidence of capacity to undertake public gaming operations in a seamless manner.
   12. A business plan showing the minimum investment and Sources of funding.
   13. Submit a broad statement on the choice of Kenya for the licenses applied for and the anticipated benefits to:-
       • Punters/players
       • Kenyan public
       • Government of Kenya
       • Directors and shareholders
   14. The proposed games of chance to be offered in the casino with a brief description of each game.
   15. The name and full address of the company(s)/manufacturer(s) that/who will be providing the applicant with the gaming equipment, such as tables, Gaming machines, cards, and all other devices and systems to be used in the casino.
   16. The rules for all the games to be offered as well as the payback percentages.
   17. Proposal on how to mitigate excessive play and underage participation.
   18. Dispute resolution procedure.
   19. Audited Accounts for the applicant’s other business operation for the last three (3) years, and evidence that none of them has pending litigation and if any, provide the Case No. nature and status.
   20. The proposed principal place of business is Physical and contact address.
   21. In case of a leased premises copy of the lease agreement executed due to be executed, The location will be subject to inspection to determine its suitability as a public gaming premise and for new public gaming premises the location must be at least 5 kilometers from existing and operating public gaming premises.
   22. The License Shall be issued for only one specific location.
   23. In addition to the submission of the above information, you will be expected to complete a Probity form to facilitate due diligence.
   24. Demonstrate ability to pay the applicable fees shown below.
       • Application fees – 1,000,000/= (non –refundable)
       • License fee Grant – 3,000,000/=
       • Annual License fee – 500,000/=
       • Investigation fee (local Director) – 250,000(non-refundable)
       • Investigation fee (foreign Director) – 1,000,000/=(non-Refundable)
       • License renewal – 25,000/=

• Requirements for licensing of bookmakers

  1. The applicant is to complete the prescribed form.
  2. Submit a detailed concept about the proposed business.
  3. Payment of the application fee is 10,000 and the Investigation fee (local Director) is Kshs. 50,000 and (foreign Director) –Kshs.500,000/=. These fees are paid upfront and are non-refundable
  4. The proposed operating name of the business is different from the registered name.
  5. Business form (sole Proprietorship of the joint venture).
  6. Names of Directors and shareholder’s directorship to be supported by a current CR12.
  7. A PIN certificate and Tax compliance certificate from Kenya Revenue Authority.
  8. A copy of the certificate of incorporation or registration as the case may be.
  9. Articles and memorandum of association for your company whose objects must among others include bookmaking
  10. Detailed mode of operation for the bookmakers business and evidence of capacity to undertake bookmaking operation in a seamless manner
  11. A business plan showing the minimum investment and Sources of funding
  12. Submit a broad statement on the choice of Kenya for the licenses applied for and the anticipated benefits to:-
      • Punters/players
      • Kenyan public
      • Government of Kenya
      • Directors and shareholders
  13. Certificate of Good Conduct for the Company Directors
  14. The proposed sports events and types of bets to be offered for betting purposes
  15. The name and full address of the company that would be providing the applicant with the Bookmaking Odds, to be supported by a copy of the agreement between your company and the Odds Provider
  16. The proposed terms and conditions of the bookmaking operation
  17. Proposed bookmaking architecture
  18. Proposal on how to mitigate excessive play and underage participation
  19. Dispute resolution procedure
  20. Audited Accounts for the applicants other business operations for the last three (3) years, and evidence that none of them has pending litigation and if any, provide Case No. nature and status
  21. The proposed principal place of business
      • Physical and contact address
      • In case of a leased premises copy of the lease agreement executed or due to be executed
      • The location will be subject to inspection to determine its suitability as a betting premise
  22. In addition to the submission of the above information, you will be expected to complete a Probity form to facilitate due diligence. The Probity form must be completed by all directors to facilitate due diligence
  23. Demonstrate ability to pay the applicable fees shown below.
      • Application fee Ksh.10,000
      • Investigation fee Ksh.500,000 for foreign applicants and Ksh.50,000 for the local applicant. Both application and investigation fees are non-refundable
      • License grant fee Ksh.200,000
      • Annual license fee Ksh.50,000
      • Premises grant fee ksh.100,000
      • Premise annual fee Ksh.50,000
      • License and premises renewal fee Ksh.5,000 each.
  24. Commencement of operations.

Upon successful applications and issuance of a license to an applicant, the license MUST be operationalized within six (6) months and evidence shall be required to demonstrate commencement of operations or milestones achieved towards its operationalization.

All applicants shall be required to appear before the Board and make a presentation regarding the proposed operation for the license applied for.  The presentation shall be judged on the following criteria;

• • • Understanding of the operations regarding the license being applied for in this case Bookmakers.
    • Submission of the requisite documents
    • Level of preparedness to commence operations
    • Demonstrate innovativeness and creativity
    • Potentiality.

The Board may require further details merited to finalize your application request in conforming to the regulations as per the Betting Lotteries and Gaming Act, Cap 131 Laws of Kenya.  You shall also be issued with operational requirements for the license once your applications is successful.

• Requirements for licensing of public lottery

1. Public Lottery is conducted for a specific charitable purpose by registered instruction/organizations.
   • The application/promoter must submit fifteen (15) copies of the following;- Duly completed and signed public lottery forms.
   • Duly completed and signed guarantor forms. (NB: All guarantors must be indemnified) The applicant and the guarantors must also submit photocopies of their national identity cards.
   • A copy of the institution’s/organization’s registration certificate.
   • A sample ticket of those to be issued for sale.
2. Applications must be submitted at least thirty (30) days before the date set for the start of the lottery.
3. Pay a non-refundable application fee of Kshs. 2,000.
4. The permit fee for a public lottery permit is 3% of the total proceeds to be collected or Kshs. 75,000 (whichever is the less) for a period of three (3) months.
5. Applicants/promoters must produce proof of possession of the prizes to be won/awarded in the lottery. The applicant/promoter may also be required to furnish the Board with a sealed bank guarantee drawn in its favour (Board) to cover the top prizes. The bank guarantee must be valid for a period of not less than six (6) months or as may be stated by the Board.
6. The tickets to be issued for sale must be printed with a security feature, and must also indicate the following:-
   • Name and full address for the organizers of the lottery.
   • Name of the lottery
   • Prize of each ticket.
   • 1st, 2nd and 3rd prizes.
   • Closing date for the sale of tickets and the date of the draw.
   • The words “authorized by Betting Control and Licensing Board” permit no——. (Quote permit number)
7. The lottery must be conducted within the authorized period.
8. Awarding of the advertised prizes does not in any way depend upon successful sale of lottery tickets.
9. The number of tickets sold must be declared to the Board before the draw.
10. In a lottery where the winners are determined by draws, all the draws must be conducted in public and in the presence of an official form of the Board. In the case of lotteries whose draws is conducted by way of a blower using numbered balls, the following must be done before the draw.
    • The drawing equipment must be kept in a secure place at all times.
    • The blower must be tested before the draw.
    • All the balls must be weighted and measured to ensure that they are of the same weight and size.
11. The venues, dates and times of the draws must be communicated by writing to the Board at least seven (7) days before the dates set for the draws.
12. In any draw, a winning entry/coupon must have:-
    • Full name and ID card number of the participant.
    • Participant’s full address.
13. For any winner to be presented with a prize he or she has won, the following documents must be produced:-
    • Original letter from the organizers of the lottery informing the participant of his/her winning.
    • Original ID card/valid driving license/passport
14. Draw results must be published in the media within fourteen (14) days after the draw.
15. An audited statement of account must be submitted to the Board within two (2) months after the draw.
16. All unclaimed prizes must be declared to the Board.
17. No applicant/promoter shall be issued with a permit to conduct a new lottery unless returns from previous lotteries he may have conducted have been submitted to the Board.

BETTING CONTROL AND LICENSING BOARD – LICENCE FEES BREAKDOWN

In conclusion, Whereas gambling companies in Kenya have faced ferocious legal and regulatory attacks. It is a thriving industry that has been experiencing significant growth over the years. With the increased demand for gambling services, it’s essential for companies to ensure that they comply with the relevant laws and regulations to avoid legal battles and possible closure.

“The information provided in this article is intended for general legal advice and does not constitute legal advice for any specific transaction or case. Since each transaction presents a unique legal context, it is advisable to retain a legal adviser for specific transactions.”

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