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The High Court has delivered a significant victory to betting enthusiasts by halting the imposition of a 12.5% excise duty on bets. Justice Patrick Otieno has instructed the Kenya Revenue Authority (KRA) not to enforce this disputed tax until the hearing and determination of an application submitted by a betting enthusiast named Edward Okwama. Additionally, the judge has issued an order that directs betting firms Milestone Gaming Limited and Standard Global East Africa Limited not to subtract the aforementioned tax from betting fans during this period.

Order restraining first and second respondents (Milestone and Standard Global) from deducting 12.5 per cent excise duty from the petitioner and other players/wagers

Justice Otieno's ruling includes the following statement:.

"Pending the hearing and determination of the application inter partes, there be and is hereby issued a temporary conservatory order restraining first and second respondents (Milestone and Standard Global) from deducting 12.5 per cent excise duty from the petitioner and other players/wagers as provided for under paragraph 4A of part II of the first schedule of the Excise Duty Act of 2015."

Edward Okwama has taken legal action against Milestone, Standard Global, KRA, and the Attorney General. Milestone operates a betting platform under the Sportpesa brand, while Standard Global offers casinos on Sportpesa's website. Okwama's argument in this case revolves around the perceived unfairness of the current law, which levies a uniform tax regardless of whether a bettor has won or lost. He also contends that the law lacks provisions for refunds of the deducted tax in cases where sports events are disrupted by acts of nature, such as rain or storms. Okwama asserts that excise duty should only be applicable when there are actual winnings, as demanding tax in the absence of income or profit goes against fundamental principles of taxation.

Contradict international principles of neutrality

He notes, "The problematic effect of this provision is that the 12.5 per cent excise duty is levied under paragraph 4A part II on the applicant and other sports betting fans and players when they place a bet or play, notwithstanding if they win or lose their money." Okwama argues that it is discriminatory for the government to impose excise duty on bets when similar principles are not applied to other industries. He laments the double burden on bettors who are required to pay both the 12.5% excise duty and a 20% withholding tax on their winnings. He further points out that the multiple taxes levied on sports enthusiasts and players in the gaming sector contradict international principles of neutrality, efficiency, certainty, simplicity, effectiveness, fairness, and non-double taxation in a tax system. Okwama claims that over 57% of Kenyan youth aged 18 and above are sports enthusiasts who engage in betting for entertainment and economic reasons. Justice Otieno has instructed Okwama to serve the betting companies, KRA, and the Attorney General within 14 days, and the case is scheduled for mention on September 21.