Partnering With a Licensed Gambling Operator in Kenya: What the Law Allows

Kenya’s Gambling Control Act, 2025 replaced the old Betting Control and Licensing Board with the Gambling Regulatory Authority (GRA) and rewrote the rules for who may hold, and share, a gambling licence. Foreign operators and investors increasingly ask whether it is faster to approach the market through a company that already holds a valid licence rather than applying to the GRA from scratch. It can be, but the Act is specific about what that kind of partnership can and cannot look like, and treating it as a simple purchase of the licence is the most common structuring mistake we see.

Why Existing Licensees Attract Foreign Interest

Applying to the GRA directly means the applicant’s own corporate structure, directors, beneficial owners and finances go through the Authority’s vetting process, and the Second Schedule to the Act requires the application to be accompanied by a certificate of incorporation, a business plan showing the minimum investment and source of funds, two years of financial reports, a list of directors and a disclosure of beneficial ownership. For a new market entrant, that can take time. A company that was licensed under the repealed Betting, Lotteries and Gaming Act and remains licensed but is not trading at scale looks, on paper, like a shortcut: the vetting is already done and the licence is already in force.

That is a reasonable starting point for a search, but it answers only one question, whether a valid licence exists today. It does not answer the more important question, which is what a foreign partner is actually permitted to acquire in that company and on what terms.

The Licence Itself Cannot Be Bought, Sold or Reassigned

The Act defines a licence as an authorisation that is “assigned to a specific person and may not be re-assigned to another person.” There is no mechanism in the Act for transferring a gambling licence from one legal person to another by agreement. A structure that amounts to buying the licence itself, rather than investing in the company that holds it, has no basis in the Act and would leave a foreign partner without the legal protection it thinks it is paying for.

In practice this means the only lawful route into an existing licence is to work through the corporate licence holder as it stands: an equity investment in that company, a joint venture agreement between the foreign party and the company’s existing shareholders, or a services and revenue-sharing arrangement under which the licensee continues to hold the licence and the foreign partner supplies capital, technology or operational support. Each of these is a materially different legal structure with different tax, liability and control consequences, and the right choice depends on how much operational control the foreign partner actually needs.

The 30% Kenyan Shareholding Floor Sets the Ceiling on Any Deal

Section 29(a) of the Act requires that a body corporate may only be licensed if a minimum of thirty per cent of its shares are held by Kenyan citizens. This is not a target the parties can negotiate around in a shareholders’ agreement; it is a condition of the licence remaining valid at all. Any equity structure has to keep that floor intact both at signing and afterward, since diluting the Kenyan shareholding below thirty per cent through a later funding round or share issue would put the licence itself at risk.

This is one reason many cross-border arrangements in this sector are built as services or revenue-share agreements rather than straight equity deals: they let the foreign partner participate commercially in the licensee’s business without the parties having to permanently restructure the cap table around a statutory minimum that has to hold for the life of the licence.

Due Diligence Has to Go Further Than “Is the Licence Currently Valid”

Three provisions of the Act matter here and are easy to overlook if diligence stops at confirming the licence is live.

First, transition. Under section 122, a licence issued under the repealed Act remains valid only for its original term; once it expires, the holder must apply to the GRA for a new licence under the current Act, including the section 29(a) shareholding requirement and the Second Schedule declarations. A “dormant” licensee’s licence may be a wasting asset with a fixed expiry date rather than an indefinite one, so the actual expiry date, not just current validity, has to be confirmed before any deal timeline is set.

Second, the scope of vetting. Section 10(g) gives the Authority power to “conduct security checks, vetting and due diligence in respect of gambling activities, licensees, their shareholders, directors, beneficial owners and staff,” and section 30 applies a fit-and-proper test that extends to the directors of the licensed body corporate, covering prior breaches of financial-conduct law, involvement in a liquidated licensed entity, and any business practice that casts doubt on competence or judgment. If a foreign partner intends to place its own nominees on the licensee’s board, or is itself the beneficial owner behind the arrangement, that reach extends to them too, and it is worth diligencing the partner’s own principals against that standard before the GRA does.

Third, revocation risk. Section 33 allows the GRA to revoke a licence for breach of any provision of the Act, a false or untrue statement made in the original application, or breach of a licence condition, and a revoked licence cannot be reissued to the same holder for up to five years. A dormant operator that has let compliance lapse, whether on returns, security bonds or the Second Schedule disclosures, is a materially riskier acquisition target than one that has simply chosen not to trade, and that distinction is not visible from the public licence register alone.