HOW TO SET UP A CASINO BUSINESS IN KENYA

INTRODUCTION

The Kenyan gambling market was estimated to be worth $40 million in 2020 and ranked as the third in Sub-Saharan Africa when it comes to sheer market size, (after South Africa and Nigeria), but has the highest number of young gambling players in the entire region.

In Kenya, casino game is the 2^nd most popular form of gambling after sports betting although, only a handful of casino operators are licensed to operate within the country. Some of the biggest and most famous casinos in Kenya include the Casino Flamingo, the Mayfair Casino, and the Captain’s Club in Nairobi, and the Golden Key Casino, and the Senator Casino in Mombasa. Blackjack, roulette, and poker are among the most popular table games in Kenya.

Interestingly, the Kenyan government recently made changes to its gambling laws of 2020 which now allow more casinos and other gaming options. The changes also provide more opportunities for the gambling population and businesses in the country. Please note that apart from public gaming licence, there are also in Kenya the Bookmakers Licenses, Totalisator License, Pool Betting Scheme License, Permit Authorizing bookmaking at race meetings, Public Lottery Permit, Prize Competition Permit and the Amusement machine/Pool Table Permit.

It is important to state that anyone seeking to set up a casino business in Kenya may choose to operate an on-premises casino and online casino, this is because online casino licence is granted only to holders of on-premises casino or public gaming licence.

WHAT AGENCY REGULATES CASINO BUSINESS IN KENYA?

The Betting, Lotteries and Gaming Act (“BLGA”) is the primary legislation on all gaming activities in Kenya and the BLGA established the Betting Control and Licensing Board (“BCLB”) as the regulator of all gaming businesses, including casino, in Kenya.

WHAT ARE THE REQUIREMENTS TO REGISTER A CASINO COMPANY IN KENYA?

Please note that anyone who seeks to register a casino business in Kenya must first apply for a “No Objection Letter” from the BCLB before it can register such a business with the Registrar of Companies in Kenya.

The proposed company shall submit three (3) sets of preliminary Proposals addressed to: The Director, Betting Control and Licensing Board for the grant of a casino/public gaming licence. The Proposal must contain the following:

• A brief introduction of the proposed company;
• Purpose/objectives for registration;
• Proposed mode of operation (online/mobile/terminals/physical ticketing);
• Terms and conditions;
• Content service provider/Poverty Reduction Strategy Papers (PRSPS) and Communication Authority of Kenya;
• Odds Provider;
• Email address & phone number of a contact person for the applicant.

Please note that upon review of the Proposal, the BCLB shall issue to the proposed company a “No Objection Letter” to enable it complete the registration of a casino gaming company with the Registrar of Companies.

The requirements for registration of a casino/public gaming company with the Registrar of Companies, Kenya are as follows:

• Three proposed names of the company;
• Proposed registered address of the proposed company;
• Details of first directors, shareholders and company secretary to include the following:

1. Name
   1. Address
   2. Occupation
   3. Date of birth
   4. Telephone numbers and email addresses.

• Object clause of the proposed company;
• “No Objection Letter” from the BCLB;
• Memorandum of Association of the proposed company stating its object as gaming business;
• Articles of Association;
• Copy of international passport for foreign shareholder(s) or director(s) or  Kenyan national identification for each Kenyan director and secretary;
• A passport-sized photograph of each director, shareholder and the company secretary.

Please note that upon completion of casino company with the Registrar of Companies, the registered casino company shall proceed to apply to the BCLB for a casino/public gaming licence.

WHAT IS THE REQUIRED SHARE CAPITAL TO REGISTER A CASINO/PUBLIC GAMING COMPANY IN KENYA?

There is no provision for minimum share capital when incorporating any company in Kenya. Also, the initial share capital of a company registered in Kenya is exempt from stamp duty unlike in Nigeria and Ghana where stamp duty is chargeable on the initial share capital of a company.

CAN A FOREIGNER OWN A CASINO BUSINESS IN KENYA?

Generally, a foreigner can register and own a non-gaming company in Kenya without appointing a Kenyan director or shareholder unless otherwise required by specific law of Kenya. However, a company seeking to set up and operate a casino business in Kenya must have a Kenya shareholder before it can register such company with the Registrar of Companies.

ARE THERE OTHER REGULATORY REQUIREMENTS FOR FOREIGNERS SEEKING TO SET UP A CASINO BUSINESS IN KENYA?

Yes, there are few regulatory requirements that must be fulfilled by foreigners who want to set up casino business in Kenya and they are as follows:

i. Background checks by the BCLB: The BCLB will not grant a casino or public gaming licence to any company with foreign shareholders or directors unless it carries out a due diligence on the directors and shareholders in their country of residence and satisfied that they have not been convicted of any crime involving fraud or dishonesty.

ii. Immigration Documents: A casino company with foreign shareholder or director will be required to provide a business/work permit and a notary certificate from the shareholder or director’s country of residence in other to open and operate a bank account in Kenya.

iii. Tax Registration: A casino company will be required to obtain a Personal Identification Number (“PIN”) from the Kenyan Revenue Authority (“KRA”), Kenyan tax authority.  The PIN is issued by the KRA to Kenyans or Non-Kenyan residents and it is essential for opening a bank account in Kenya. Please note that gaming revenue in Kenya are subject to 15% tax whilst, following the reintroduction of withholding tax by the Tax Laws (Amendment) Act, all winnings are subject to withholding tax at the rate of 20%. All taxes must be remitted by 20^th day of the month following the month of collection. Late payment attracts 1% interest per month.  

iv. Security Deposit: Upon the grant of the licence, the applicant is required to furnish the BCLB with security by means of a deposit or other acceptable security of a sum not exceeding Kshs. 40,000 which may be refunded upon the expiration or cancellation of the licence provided the gaming company may forfeit the deposit upon court order for liability to the gaming public or the authority.

WHAT ARE THE REQUIREMENTS FOR OBTAINING A CASINO/PUBLIC GAMING LICENCE FROM THE BCLB IN KENYA?

The requirements for a casino/public gaming licence are as follows:

• Completed Application for a casino/public gaming licence in Form 13A;
• Detailed concept about the proposed business;
• Evidence of payment of application and Investigation fees;
• Proposed operating name of the business (if different from the registered name);
• Particulars of directors and shareholders;
• A PIN certificate and Tax compliance certificate from Kenya Revenue Authority;
• A copy of the certificate of incorporation of the company;
• Articles and Memorandum of Association of the company whose objects must among others include gaming;
• Certificate of good conduct for directors of the company;
• Evidence of capacity to undertake casino/public gaming operation in a seamless manner;
• A business plan showing the minimum investment and sources of funding;
• A broad statement on the choice of Kenya for the casino/public gaming and the anticipated benefits to:
  • Punters/players
  • Kenyan public
  • Government of Kenya
  • Directors and shareholders;
• The proposed game of chance to be offered in the casino with a brief description of each game;
• The name and full address of the company that would be providing the applicant with the gaming equipment’s such as table, gaming machines, cards and all other devices and systems to be used in the casino;
• The rules for all the games to be offered as well as they pay back percentages;
• Proposal on how to mitigate excessive play and underage participation;
• Dispute resolution procedure;
• Audited Accounts for the company’s other business operation for the last three (3) years, and evidence that none of them has a pending litigation and if any, provide case/suit numbers, nature and status;
• The proposed principal place of business stating the following:
  • Physical and contact address
  • In case of a leased premises, a copy of lease agreement executed or due to be executed. Please note that the location will be subject to inspection to determine its suitability as a gaming premises. (Please note that for a new casino/public gaming premises, the location must be at least 5 kilometers from existing and operating public gaming premises.)
• Completed probity form by all the directors to facilitate due diligence.

Please note that the BCLB may require further details merited to finalize an application request in line with the BLGA of Kenya.

CAN A COMPANY LICENCED TO OPERATE ON-PREMISES CASINO/PUBLIC GAMING ALSO ENGAGE IN ONLINE CASINO BUSINESS IN KENYA?

In Kenya, there is no special requirement for grant of licence to operate an online casino business. A company seeking to operate an online casino business in Kenya must first obtain a licence to operate an on-premises casino from the BCLB. Upon grant of the on-premises licence, the company may then apply for approval from the BCLB to operate an online casino business in Kenya.

ARE THERE SPECIAL REQUIREMENTS FOR THE GRANT OF THE APPROVAL FOR ONLINE CASINO BUSINESS IN KENYA?

No special requirement is needed for grant of approval for online casino business in Kenya after grant of licence. All that the company is required to do is to make a formal application to the BCLB of its intention to commence or operate an online casino gaming business attaching its on-premises licence issued by the same BCLB.

The BCLB shall then grant an approval to the company to engage in online casino business.

IS THERE ANY COST PAYABLE FOR THE GRANT OF APPROVAL TO ENGAGE IN ONLINE CASINO BUSINESS?

It is completely free to obtain an approval from BCLB to engage in online casino business in subject to proof of having previously obtained the on-premises casino licence.

WHAT IS THE IMPLICATION OF OPERATING A CASINO GAMING BUSINESS IN KENYA WITHOUT A VALID LICENCE?

It is an offence for anyone to engage in the business of casino and gaming activities generally without obtaining a valid licence from the BCLB and any person who is found guilty of such act shall be liable to a fine of about Kshs. 3,000,000or a term of imprisonment not exceeding ten years or to both fine and imprisonment. Where the person is a second or subsequent offender, he or she shall be liable to a fine of about Kshs. 5,000,000 or to imprisonment for a term not exceeding fifteen years or both.

WHAT ARE THE APPLICABLE FEES FOR OBTAINING CASINO OR PUBLIC GAMING LICENCE IN KENYA?

The applicable fees for obtaining a casino licence by local or foreign applicant are as follows:

Please note that there may be other costs associated with post-incorporation registrations and documentation.

Please note also that the public gaming licence is issued for only one location and where the company decides to change location, it must pay to the BCLB a transfer of location fee in the sum of Kshs. 100,000.

IS THERE ANY CASH DEPOSIT REQUIREMENT FOR CASINO LICENCE IN KENYA?

Upon issuance of a casino/public gaming licence, the company will be required to furnish the BCLB with security deposit of a sum not exceeding Kshs. 40,000 or any other amount as may be approved by the BCLB.

Please note that the security deposit shall be refunded to the company on the expiration or cancellation of the casino/public gaming licence, unless it becomes forfeited by a Court Order by reason of conviction for an offence under the BLGA or for fraud or dishonesty.

WHAT ARE THE PROCEDURES FOR OBTAINING PUBLIC GAMING/CASINO LICENCE IN KENYA?

The process of obtaining a casino or public gaming licence is as follows:

i. The Application for public gaming/casino licence in Form 13A;

ii. Payment of the required application and investigation fees;

iii. The BCLB shall review the Application and will require the Applicant to make a presentation regarding the proposed operation for the public gaming/casino licence applied for. The presentation shall be judged on the following criteria;

• The depth of understanding of the operations of Bookmaker,
  • Submission of the requisite documents,
  • Level of preparedness to commence operations, and
  • How the Applicant demonstrates innovativeness and creativity in the industry.

iv. The BCLB will review the Application regarding any areas of non- compliance with the licence requirements which the applicant will be required to address;

v. Upon successful review and approval of the application, the BCLB will advise the Applicant on payment of the applicable licensing fees and thereafter proceed to issue the licence.

WHAT IS THE VALIDITY OF A CASINO LICENCE IN KENYA?

By Section 9 of the BLGA, a Casino Licence is valid for one (1) year and expires on every 30th of June following the date of issue.

WHAT IS THE TIMELINE FOR OBTAINING PUBLIC GAMING/CASINO LICENCE?

Registration of company in Kenya takes about to 15 to 30 days unlike Nigeria where registration of company can be completed within 24 hours.

The estimated timeline for obtaining a casino licence in Kenya is about 6 months subject to fulfilling all licensing requirements.

WHAT BEST PRACTICES CAN A CASINO GAMING COMPANY ADOPT IN ITS OPERATION?

Kenyan gaming laws are designed to ensure that responsible gaming is conducted honestly, competitively and free of criminal and corruptive elements. Some of the best practices that should guide a casino gaming operator include but are not limited to the following:

1.         To establish and maintain responsible accounting principle

2.         Maintain systems for reliable record keeping of all activities relating of the company and ensure prompt filing of periodic reports with the BCLB;

3.         Monitor and report all complex, unusual, suspicious and/or large transactions (equivalent to or above $10,000) to anti-money laundering enforcement agency;

4.         Ensure that only persons of the legal age limit have access to participate in gaming activities;

5.         Develope a safe and secure casino platform with safeguards against cybersecurity.

6.         The company should endeavour to display its name, address, and telephone number on its websites and the licence must be displayed at the business location.

7.         Include privacy policy and terms and conditions in the company’s website to engender trust in the customers.

8.         Ensure strict compliance with various Kenyan laws, regulations and ensure internal controls pertaining to the gaming activities.

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About KORIAT & CO.

We are a commercial law firm in Nigeria with network of lawyers and consultants in Ghana, Kenya and Rwanda.

We assist local and foreign clients to process company registration and business licences in Nigeria, Ghana, Kenya and Rwanda. We also provide legal advisory and support services to promoters and registered businesses.

The above article is not legal advice and does not automatically make its readers our clients unless they have engaged our services to represent them in any way.

Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 if you require additional information or assistance in respect of the subject covered in the above article.