Uganda’s new approach to gambling payments: progress or misstep?
The Ugandan government is working to channel all gambling payments through a single, state-operated gateway.
At first glance, this is a sound proposal. There are many unregulated operators, significant tax leakage and revenue loss to an underground, illegal economy. However, the practical implementation of this proposal and its feasibility at scale raise serious questions.
Under the proposed Tax Procedures Code (Amendment) Bill, 2025, all casinos, sportsbooks and other gambling entities will be required to process bets and winnings through a single, centralised payment gateway. This would ensure tax transparency and efficiency.
The Bank of Uganda will license this gateway, which will be linked to the Uganda Revenue Authority’s (URA) electronic payment systems.
Regulatory fixes
Policymakers want to address the lack of visibility in the gambling sector. The National Lotteries and Gaming Regulatory Board (NLGRB) has raised concerns about money laundering and terrorism financing. There are also high levels of illegal gambling, particularly in rural regions.
Innocent Davis Bamurike, founder and chief executive officer of an African sportsbook set to launch, has tracked Uganda’s proposed centralised gambling payments policy. “It has been on the cards for a few years now. As with all regulation changes, it didn’t fall from the sky,” he tells iGB. “The major goal has always been to greatly reduce tax leakages from suspected underdeclarations by operators”.
On whether underreporting was widespread, Bamurike is careful. “The NLGRB and URA have reasons to believe that full compliance was not universal across the sector. I would not claim to have direct evidence of this myself, but I understand why both government bodies felt a structural response was necessary”.
State minister for finance, Henry Musasizi, has stated there will be significant penalties for non-compliance. Operators that fail to use the centralised payment gateway will pay double the gaming or withholding tax due, or UGX110m (€26,268).
It is clear the primary motivation is tax compliance. By requiring bets to flow through a centralised gateway, the URA would gain real-time access to taxable transaction data, making it more difficult for licenced operators to underreport activity. This policy makes logical sense, but the methods used to achieve this goal deserve scrutiny.
Strategies for operators
From July 1st 2026, Uganda plans to impose a 30% tax on gross gaming revenue and a 15% withholding tax on player winnings. This is in addition to the centralised payment gateway policy. Regarding the potential impact, Bamurike explains, “I would not be surprised to see some smaller and newer operators reconsider their position in the market as the combined tax burden makes viability harder to demonstrate in the early years of operation”. For some, he adds, “the pressure continues until a point of exit”.
The concern about players migrating offshore is one that the industry has raised directly with regulators. Bamurike reveals this has not resulted in action. Instead, “a lot of what operators have shared has been ignored”.
A fiat gateway cannot track on-chain crypto movements directly
— Najib Balinda, Genius Gaming Consult
With nothing in place to assure operators, many have pointed to crypto gambling sites as an alternative for bettors. Najib Balinda, chief business development officer at Genius Gaming Consult and director at Netbet Uganda, has examined this claim.
He states that “A fiat gateway cannot track on-chain crypto movements directly, and over-regulation often drives tech-savvy users to VPNs and decentralised P2P crypto platforms, which bypass the centralised gateway entirely”. That gap, he warns, has already created an opportunity for unlicenced operators.
Balinda also raises an alternative model that policymakers may not have considered: a reporting-only approach. Operators would process payments independently, but stream real-time transaction data to a government monitoring node.
He argues, “This option is often more resilient and less prone to single-point-of-failure risks”. It could achieve the same tax and AML goals with considerably lower implementation risk. However, it has not featured publicly in the current proposals.
Outside the regulatory net
While legal operators scramble to integrate with the new centralised payment gateway, unregistered and illegal platforms are unlikely to comply. Licenced operators already under NLGRB oversight will be required to route all wagers and payouts through the URA-monitored system.
In contrast, unregulated operators will continue operating outside the gateway. This mirrors the UK’s GamStop self-exclusion system, where only licenced operators are required to connect. As a result, self-excluded or restricted players on GamStop can bypass protections by gambling on unlicenced or offshore sites. The result is a regulatory gap: responsible gambling tools and oversight apply only to the regulated sector.
Similarly, Uganda’s centralised gateway risks becoming another tool that increases compliance burdens on legal operators. It would also give the state greater visibility into licenced operators. Yet it may do little to curb the illegal market it is partly intended to address.
Deterrents for defaulters
The bill imposes severe penalties for non-compliance: either double the applicable gaming or withholding tax liability or a fine of UGX110 million (€26,268), whichever amount is higher. While these stiff sanctions are designed to drive compliance, enforcement against unlicenced and unregulated operators remains uncertain.
The problem is the penalty structure is calculated against tax liability. An unlicenced operator running games in rural Uganda is not filing gaming tax returns. Therefore, a fine based on a tax obligation that was never declared is an inappropriate deterrent for an operator outside the system.
The NLGRB’s recent enforcement drive, Operation Mashine Haramu, resulted in the confiscation of 104 illegal gaming machines across multiple locations. This is a reminder that unlicenced activity remains widespread and likely to persist even under the new policy.
Beyond enforcement challenges, the heavy penalties risk disincentivising legitimate operators. New market entrants and smaller licenced businesses may balk at high compliance costs, integration requirements and the threat of massive fines. This could discourage investment and slow the formalisation of the industry, forcing some operators out the market—or into the unregulated space.
Bets in one basket
The most immediate operational question is whether a single, centralised gateway can handle the real-time transaction volume of Uganda’s entire gambling sector.
Balinda explains: “While theoretically possible with high-availability cloud infrastructure, the primary risk is latency during peak sporting events or weekends, when transaction volumes spike by 10 to 20 times their usual levels”. He adds that even under optimal conditions, some transactions will require manual alignment.
Network downtimes can cause huge unresolved transactions that affect the business, and customers become impatient
— Najib Balinda, Genius Gaming Consult
Uganda’s betting market is also heavily dependent on mobile money, further complicating matters. Balinda identifies the specific fault lines: “The main challenges include API timeout handling, reconciling mismatched transaction statuses between the telco and the gateway and managing USSD and STK Push success rates, which can be unstable under heavy load”.
When those issues compound, the consequences extend beyond inconvenience. Balinda shares: “Network downtimes can cause huge unresolved transactions that affect the business, and customers become impatient while such issues are being resolved”.
Governance conflict
The bill proposes two bodies to oversee the central payments gateway. The Bank of Uganda will license the payment gateway, which will be linked to the URA’s electronic notice system. At the same time, the NLGRB will retain its regulatory powers over the gambling industry. While seemingly a logical division, this arrangement is rife with potential for bureaucratic tensions and regulatory conflict.
When disputes inevitably arise, it is unclear which body has ultimate authority to resolve them. If the gateway’s technical specifications, set under the Bank of Uganda’s National Payment Systems Act, contravene the requirements of the URA’s electronic notice system, which set of standards takes precedence? And if the URA penalises an operator for a transaction error originating from the gateway, who adjudicates the dispute?
These are not abstract problems. South Africa illustrates, in real time, what happens when regulatory bodies with distinct mandates are made to share oversight of the same market. The National Gambling Board (NGB) and the country’s nine Provincial Licensing Authorities operate under a divided framework, and the cracks are visible.
The NGB recently launched a portal designed to centralise information about licenced operators. However, it drew immediate criticism after some licenced online operators were found missing from the register. For other platforms, the register incorrectly listed them as closed, making them appear to be operating illegally.
These issues were directly traced to problems aggregating consistent data across separate provincial systems. Uganda is proposing to build a similar shared oversight structure from scratch and apply it to a new payment architecture. However, key operational details remain publicly unresolved.
The cost of compliance
This reform places an increased cost burden on licenced operators. A 30% tax on GGR is significant by regional standards. There is also a 15% withholding tax on player winnings, the infrastructure cost of integrating with a new centralised gateway and ongoing supervision fees. This puts substantial pressure on smaller operators.
Bamurike is direct about what integration will demand. “For operators running on in-house platforms, the engineering time and testing required should not be underestimated, particularly for smaller teams managing multiple priorities simultaneously”. For those on outsourced platforms, customisation costs are typically considerable.
Balinda puts the realistic implementation timeline at two to four months for a mid-sized operator, though third-party platform dependencies can push that further. Regarding cost, he explains, “There are many factors that determine this cost, so it is unrealistic to estimate any amount”.
Lessons from Kenya
Kenya offers an insightful regional comparison, serving as a warning for Uganda’s current approach.
Bamurike draws on Kenya’s 2019 experience in detail. He explains, “Kenya introduced an aggressive tax regime that included a 20% excise duty on stakes alongside tighter compliance frameworks. Within months, several of the biggest operators in the market had suspended operations. Sportpesa, Betin, and others essentially went dark. The market took years to stabilise”.
Kenya moved too fast, made too many changes simultaneously
— Innocent Davis Bamurike, Chief Executive
Bamurike goes on to suggest that greater centralised oversight should be pursued with caution. “It is clearly the right direction for a maturing market. The lesson is about sequencing and consultation. Kenya moved too fast, made too many changes simultaneously and underestimated how quickly operators would reach their viability thresholds”.
Bamurike argues that Uganda should adopt a phased approach, rather than activating everything at once. He also suggests establishing a clear liability framework before going live, rather than after the first failure. Finally, he believes a transition period should be introduced, allowing compliant operators to adapt without penalties for integration time.
Unresolved issues
Before the bill secures parliamentary passage and presidential assent, there remains a window to address gaps that could become permanent structural weaknesses.
According to Bamurike, this is a good time to include a liability framework in case the gateway fails. “The proposals are silent on who bears commercial responsibility if the gateway experiences outages, processing delays, or data errors,” he says.
“For a licenced operator, every minute of payment downtime is a direct commercial loss. Players cannot deposit, active bets cannot settle, and trust erodes quickly”. He wants to see a formal service level agreement between the gateway operator and licenced sportsbooks. This would include defined uptime guarantees, a published incident response protocol, and a compensation mechanism for demonstrable losses. “Getting this right before the law is enacted is far easier than litigating it after”.
Privacy concerns arise regarding the storage of KYC data on a centralised, government-linked server
— Najib Balinda, Genius Gaming Consult
Balinda raises privacy considerations, noting that the URA integration involves sharing transaction hashes and user identifiers through a secure API tunnel. “Privacy concerns arise regarding the storage of KYC data on a centralised, government-linked server,” he says. Balinda then highlights particular concern around access at the regulatory and revenue authority level.
Another key unresolved issue is the timing of the centralised payment gateway rollout relative to the accompanying tax reforms. Without clarity on whether the harmonised 30% GGR tax and 15% withholding tax will be implemented simultaneously with the gateway, operators face serious challenges in developing coherent compliance strategies.
A gateway introduced without a finalised tax framework becomes little more than an expensive monitoring tool lacking commercial purpose, while a new tax regime without a functioning gateway risks becoming an unenforceable duty. To date, the government has provided no clear timeline or sequencing for these interconnected measures.
Gateway to success?
The Ugandan government is committed to bringing its gambling economy under tighter state control, and with good reason. If implemented cleanly, the centralised gateway could deliver the transparency and tax predictability officials are promising, while strengthening AML defences.
Yet as Bamurike and Balinda make clear, there are risks. These include a technically fragile single-point system, an unresolved liability framework, a combined tax burden that threatens smaller operators and gaps that crypto and offshore platforms could exploit. They are operational realities the bill must address before it becomes law.
Sector-wide visibility must translate into sustainable revenue growth, rather than accelerating the offshore and underground activity it is designed to stop. As Bamurike, who is experienced in navigating regulatory changes, puts it: “For regulation to be improved, some unpleasant situations have to play out. The smart ones will be sure to plan ahead”.
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iGB L!VE
