Blow for gaming investors in court

The High Court has declined a request by gaming and betting investors to stop a law that would allow the Nairobi County Government to introduce new levies and increase licence fees.

In an application filed by the Association of Gaming Operators of Kenya, the investors argued that the new tax is bad for them as they are already struggling due to harsh economic times caused by the Covid-19 pandemic.

But Justice Anthony Mrima said the investors failed to lay basis for the grant of a temporary order.

The judge also said the petitioners delayed in filing the application and that they did not account for the three-month period after enactment of the disputed law.

The city county started implementing the new law in May this year while the investors filed their application towards the end of July, 2021. 

"Whereas petitions on infringement of Bill of Rights are not time-bound, a party, however, must account for the time between the alleged infringement or threat of infringement of the human rights and fundamental freedoms and the filing of the claim," said the judge. 

The law came into effect after approval by the Nairobi County Assembly. It requires public lotteries to pay up to Sh7 million, betting premises up to Sh1 million while casinos will pay up to Sh2.2 million for various licences.

Betting, lotteries, and gaming draw permits will be charged Sh5,000 per draw, while an entertainment tax of 10 per cent will be charged on winning revenue for the same.

The investors wanted the temporary order to remain in force pending hearing and determination of a case they filed challenging legality of the law. 

However, Justice Mrima said since the Act was passed in May, 2021 it means that by the time the County Government passed its budget for the year 2021/22 sometimes in June 2021, the revenues intended to be raised through the disputed law were factored in the budget. 

"That being the position, it then means that if the taxes are not collected, then the county government is likely to suffer revenue deficits which will adversely affect service delivery", said the judge.

In the petition, the investors argued that there was no adequate public participation in coming up with the Act and that the County Government only ran a single advertisement in the Star newspaper.

Their advocates told court that the national coverage of the newspaper is very minimal and that the public was not, therefore, accorded a reasonable opportunity to participate in the law making process. 

It is further argued that given the nature of the disputed Act, the investors ought to have been consulted.