Betting firms cry foul over ban on cash transactions

KAMPALA - The betting industry is up in arms following a government proposal to ban cash transactions in the sector. Stakeholders warned that the measure could further cripple the industry. 

The outcry accrues from the Tax Procedures Code (Amendment) Bill 2025, which was tabled by finance minister Matia Kasaija. 

The Bill is currently being scrutinised by the Parliament’s finance committee chaired by Rwampara County lawmaker Amos Kankunda of the National Resistance Movement (NRM). 

According to the proposal, people who want to bet can either place their bets using their gadgets or through the machines at betting hubs or shops. 

The law proposes that an operator of a casino, gaming or betting activity shall only receive a wager or money staked and only make payouts through the gaming and betting centralised payments gateway system licensed by the Bank of Uganda. 

The Bill further proposes to insert Section 93(B), where any operator who fails to comply with the system would be liable to a penal tax equivalent to double the gaming or withholding tax due, or sh110m whichever is higher. 

The centralised gateway shall be expected to interface directly with the Uganda Revenue Authority’s electronic notice system, allowing for real-time monitoring of transactions and tax compliance.

However, while appearing before MPs on Thursday, April 24, 2025, Dr Innocent Nahabwe, the chairperson of Uganda Betting and Gaming Alliance, labelled the move as ill-conceived and detrimental to their survival in business. 

He was flanked by Dennis Rubanza and Bernard Rwakihembo. 

“I know there is a move towards electronic payments and they are benchmarking on the region. We think if it needs to be done, it should be in a phased approach to ensure that we are able to adapt and we have new systems that can be able to accommodate this. But in the meantime, we think cash should be maintained,” Nahabwe said. 

He noted that as of last year, they paid sh196b in taxes, with projections of sh250b this year. 

“But beyond that, even in our areas, from the communities where we come from, we know that the buildings that are there, in most of those townships and constituency headquarters that you lead, are actually occupied by betting companies. 

All those companies are employing so many people. We employ over 150,000 people in this sector,” Nahabwe said. On his part, Rubanza said the company he represents remits over sh2b in gaming tax every month.

He stressed that despite the negative perception surrounding the industry, betting plays a vital social role. 

Rubanza said betting is a painkiller for thousands of unemployed youths who would otherwise be a menace to society. 

During the hearing, Nahabwe also pointed out that betting companies are being stifled by targeted taxes that seem designed to cripple the industry. 

He noted that many operators have already exited the market under the weight of these levies. Citing the computation of withholding tax, Nahabwe explained that the tax is currently imposed not just on winnings, but on the total stake plus winnings, a practice he described as punitive and unsustainable. 

“Like last night, it was Arsenal against Crystal Palace and the odd is 1.02 for Arsenal and Arsenal wins, you have staked sh1m and you have won sh1.02m. The computation is that we would charge 15% withholding tax on that amount. Essentially, we would pay you around sh850,000 and yet you staked sh1m.

In that case, what we are doing, we just say that we will pay you sh1.02m and carry the extra burden of carrying the tax because the bettor just can’t simply understand it,” Nahabwe said. 

“For a day, when we have made a loss which is quite often, we are only allowed to put zero. The computation for pool and gaming tax is such that when you have a bad week, you actually have to borrow to be able to just pay the taxes,” he explained.

Darker side 

However, Sheema Municipality MP Dickson Kateshumbwa (NRM) said while the industry provides jobs, it has a dark side. 

“We have also listened to some activists who think that this industry actually is a very big danger that people are betting chicken in the village, Emyooga money and Parish Development Model funds and it is not a very productive sector in terms of wealth creation. It takes away, but it does not multiply the income,” he said. 

“In my constituency, in every small trading centre, there is a betting house. Of course, you look at it from the employment and rent, angle but where is the money coming from? If I am betting sh10,000 and another one is using sh10,000 to plant cabbages, who is adding wealth,” Kateshumbwa noted. 

Mbale Industrial Division MP Karim Masaba said children have been known to bet yet there are laws against it, before lambasting betting companies “I have not heard of a circumstance where a betting company is asking for someone to display their national identity card before they can bet in these shops. You are creating a problem for the country,” he said.

Need for sensitisation

The chairperson of Parliament’s finance committee, Rwampara County lawmaker Amos Kankunda, said there is need for mass sensitisation and regulation of betting. 

“Even when we were young in our villages, grazing goats and cows, we were betting. Betting is a natural thing; even when you hide away from it, it is here with us. So, we need to see how to regulate it effectively,” he said.