Since the government introduced taxation on proceeds from betting, it has caused rage among bettors, many finding it unreasonable to place any bet over a major slash on what they get after placing a bet.
On Tuesday in a local daily, the Association of Gaming Operations Kenya (AGOK) outlined the formula that is being used on 20% withholding tax on proceeds of betting in compliance with the government directive.
“We concur with the government on tax collection to meet its agenda but the methodology and interpretation of the term winnings gives the operators a bad image especially with their customers who do not understand that the contentious interpretation is from the government. We feel this will have a negative impact on tax collection,” the statement by Agok CEO Aloyce Omondi read in part.
The formula used to calculate 20% tax on bets
The statement outlined that the companies use betting odds, which are normally in decimal format, to calculate winnings.
“A Ksh10 bet at odds of 2/1 would return Ksh30 (Ksh20 of winning plus Ksh10 stake) id successful. If unsuccessful, you would lose your Ksh10 stake” the statement outlined.
“A Sh10 bet at odds of 3.0 would return Sh 30 (Sh20 of winnings + Sh10 stake) if successful. If unsuccessful you lose your Sh10 stake. The calculation is now winnings = (odds x stake) stake”
The association stressed on how much it complies with the government order, yet said the methodology and interpretation of the term winnings gave the operators a bad image especially with their customers who do not understand that the interpretation is from the government.
AGOK, however, made a request to the Betting Control and Licensing Board (BCLB) to issue licenses to the remaining betting firms in the country as they continue to engage in legal tax dispute resolution mechanism.