Tax on jackpot winnings in Kenya: the 5% and 20% rules and who deducts them

Two withholding taxes in Kenya's Income Tax Act can touch a jackpot payout, at very different rates. Which one applies depends on what the law calls the product you staked on, and the operator, not you, takes the tax off. This guide works through the definitions, an illustrative example and the points the law leaves open; payout deadlines by prize size are covered in how jackpot prizes must be paid out under the Act.

What are the two rates?

Section 2(1) of the Income Tax Act 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". The Third Schedule, Head B, taxes "withdrawals made by punters" at five percent: paragraph 5(i) for residents and paragraph 3(i) for non-residents.

The same section defines "winnings" as "a pay-out from a lottery or prize competition by a person licensed under the Gambling Control Act". Paragraphs 5(r) and 3(y) of Head B tax winnings at twenty per cent, for residents and non-residents alike.

Both definitions in their current form come from the Finance Act, 2026. Its section 2(d) substituted the definition of withdrawals, section 2(e) inserted the definition of winnings and section 21 added the 20% rate. Under section 1(c), those sections came into operation on 1 July 2026.

Is a bookmaker's jackpot a prize competition?

This is the question that decides between 5% and 20%, and the statutes answer it only through their definitions. The Gambling Control Act, 2025 treats bookmaking and prize competitions as different activities. Section 28(2) lists "a bookmaking" at paragraph (c), "a prize competition" at paragraph (e), public lotteries at (h) and online gambling at (i), each licensed in its own right.

Section 2 of that Act defines a bookmaker as a person who carries on "the business of receiving and negotiating bets", and a bet as a wager or stake of money on a "game, sport, lottery or exercise or any other event". A slip on 13 to 17 football matches, staked with a bookmaker, fits those words; the format is described in how jackpot bets work. The Act does not define "prize competition" at all, and section 84 deals with its licensing separately: the Authority may license prize competitions that cut across several counties, and a county government may license those confined to one county.

The Act's own definition of a jackpot, "the highest prize" from a displayed combination in a game of chance, describes the prize, not the licence it is offered under. Its definition of a lottery covers schemes that distribute property by chance. Neither turns a bookmaker's sports jackpot into a prize competition.

Read together, the definitions point one way. A football jackpot run by a licensed bookmaker is a bet, and its payout is money paid to a player's account by a licensee, which is the withdrawals wording at 5%. A jackpot run as a lottery or a licensed prize competition would be winnings at 20%; no KRA guidance applying the new definitions to jackpots was found on kra.go.ke, so ask your operator which rate it deducted and on what basis.

Who deducts and remits the tax?

The tax is collected at source. Section 35 of the Income Tax Act places the duty to deduct on the person making the payment, which here is the licensed operator. Withdrawals are listed in section 35(3)(h) for residents and section 35(1)(i) for non-residents; winnings in section 35(3)(q) and section 35(1)(w).

Section 35(5A) directs the Commissioner to pay the tax deducted from withdrawals into the Sports, Arts and Social Development Fund. Section 10(1)(o) deems winnings paid by a person to be income accrued in or derived from Kenya.

Illustrative example: one payout, two rates

Illustrative example: a licensed operator credits a jackpot payout of KES 1,000,000 to a player's account. The table applies each rate to the amount paid, as both definitions describe it. The figures are arithmetic only and do not show how any operator presents the deduction.

On a KES 1,000,000 payout the gap between the two treatments is KES 150,000. Bonuses for 12 or 13 correct, explained in jackpot bonuses for near misses, are money paid to the account too, so the same percentages apply to whatever amount is paid. Separately, the money deposited to place the bet attracted excise duty of 5% of the amount deposited for betting purposes.

Is the deduction a final tax?

Section 76A of the Income Tax Act says the Commissioner shall not assess income that has been subject to a withholding tax "which is also a final tax". The Third Schedule items for withdrawals and winnings do not carry the words "final tax", unlike some neighbouring items such as qualifying dividends.

The text therefore does not say whether the deduction ends your liability on that payout. If a large win sits alongside other income in the same year, put the question to KRA or a tax adviser.

Why some pages still say 20% on all winnings

KRA's frequently asked questions on betting, gaming and lottery tax, checked on 29 October 2026, still say the Tax Laws (Amendment) Act "reintroduced WHT on winnings at the rate of 20%". The same page defines winnings broadly, as covering betting, lotteries, gaming and prize competitions under the Betting, Lotteries and Gaming Act.

That Act was repealed by section 120 of the Gambling Control Act, 2025, and the Income Tax Act as revised to 1 July 2026 uses the narrower definitions above. Older articles that apply 20% to every betting payout reflect the earlier wording.

What this guide does not cover

Operator taxes such as betting tax, which KRA's FAQ puts at 15% of the revenue generated from betting, are charged on the operator's revenue rather than on your payout. Section 121(6)(a) of the Gambling Control Act keeps them in force until new provisions are enacted.

How fast a payout must reach you, and the checks that come first, sit in the Third Schedule of the 2026 Conduct Regulations and are covered in the payout guide linked above. The wider subject of jackpot predictions, including tax and tipster claims, is in jackpot predictions in Kenya: how they work.