The GSTA summit in Nairobi provided an opportunity to raise important issues. It brought together regulators, government leaders, payment service providers, and gambling operators from across the continent. PawaTech’s Director of Public Relations, Gabriel Opoku-Asare, spoke at the summit about the global issue of tax revenue losses resulting from offshore betting platforms. According to forecasts, these losses could exceed $11 billion by 2029. This is precisely why balanced and sensible regulation is needed.
The summit, held from June 2 to 5, was a crucial forum for stakeholders in the iGaming ecosystem. The most critical issue to be addressed was the protection of the online gaming sector in Africa.
In his speech, Opoku-Asare drew particular attention to the fact that unlicensed offshore operators promoting themselves online pose a significant threat. He also proposed solutions that could protect African consumers and the region’s economy. He noted that revenue leaks are not theoretical—they mean clinics that will not be built, schools that will not be funded, and delays in infrastructure development.
PawaTech data clearly shows that Africa loses hundreds of millions of dollars every year through unlicensed offshore sites. These operators do not pay local taxes, do not create jobs, and do not reinvest anything in the economy. Instead, they extract profits from the African economy. If appropriate measures are not taken, the total loss is expected to reach $11 billion by 2029.
Opoku-Asare’s statement focused on the issue of sewage. This refers to the share of the rates that onshore operators pay to the budget. If the leakage is high, tax revenues will be higher, and gambling methods will become safer. Ultimately, the level of local reinvestment is expected to increase. However, low leakage will make the market more vulnerable, as it will be exploited by offshore sites, which are not regulated.
At the same time, there are few technological security measures in place, such as a VPN or IP blocking. These should be accompanied by competent regulatory and tax policies. If everything is done correctly, the legal market will become much more attractive than the black market.
Opoku-Asare cites excessive taxation as the main problem. This problem falls squarely on the shoulders of legal operators. The speaker explained that visible taxes for players and deposit fees are the factor that pushes people to choose offshore gambling operators.
According to experts, the Indian experience could be used to solve this problem. India has long suffered from issues with offshore gambling sites that attracted local youth with innovative games such as Plinko. This game became extremely popular in India — there were even information sites offering selections of online platforms with Plinko. However, the government decided to reduce taxes on online casinos, which led to an outflow of the population to offshore establishments and stabilized tax revenues to the budget.
Experts at a forum in Nairobi called for the Indian experience to be leveraged in reducing levies on legal operators. For example, a 1% deposit tax eats up to 10% of an operator’s total revenue, while a 4% commission can drain it by up to 40%. As a result, legal operations become simply unviable. Additionally, the region is also known for not withholding taxes on winnings, which encourages players to place bets abroad.
Even with these challenges, PawaTech has contributed over $100 million in taxes across the continent. It also reaffirms its commitment to operating in well-regulated markets. Opoku-Asare supports the call for more sensible regulation. He cited a study by H2 Gambling Capital, recently published in iGaming Africa, which states that the African iGaming sector could reach a size of $22 billion by 2029. However, there is a condition for this, which is that 90% of betting activity must be conducted through licensed operators. At the same time, the same study warns that tax rates exceeding 30% of gross gambling revenue will not only render the market inefficient but also unprofitable. The optimal tax range is 15-25%.
To achieve these goals, taxes should be levied on operators rather than players, and taxes should be based on income rather than transactions.
