Key Moments:
- Effective July 17, 2025, withholding tax on player winnings increased from about 15% to between 20% and 25%.
- Industry experts have warned that rising taxes may push bettors toward unlicensed offshore platforms.
- The reforms are intended to boost state revenue and promote responsible gambling, according to Ethiopian authorities.
New Tax Measures Set to Transform Ethiopian Betting Market
Ethiopia is undergoing a major shift in its gambling landscape following the implementation of a new tax framework. Proclamation No. 1395/2025 has introduced changes that have already caused significant reaction within the industry. Beginning July 17, 2025, the withholding tax on winnings has climbed from roughly 15% to a band between 20% and 25%. Meanwhile, the operator turnover tax remains fixed at 15% on total stakes or sales.
Operators and Players Adjust to Increased Tax Burden
The revised tax requirements are changing the dynamics for both operators and bettors. Detailed analysis from Betrush highlights that these adjustments present layered impacts. Operators could see diminishing profit margins, leaving less to allocate toward marketing and player promotions. For gamblers, reduced payouts and a drop in promotional opportunities could erode the appeal of regulated betting channels.
Betrush commented, “The game has changed,” emphasizing that smaller operators may struggle to continue in this environment, while larger, more capitalized companies may consolidate their market position.
Potential Shift Toward Offshore Betting Sites
With returns under pressure, the risk of players migrating to unlicensed or offshore platforms is rising. These alternative sites often promote better payouts and relaxed conditions, making them increasingly attractive when compared to the regulated market. Such a shift could not only reduce tax collections for the government, but also expose bettors to less regulated environments with limited consumer protection.
Policy Aims to Balance Growth, Revenue, and Responsibility
Ethiopia’s officials have justified these reforms as necessary for advancing the sector, securing public income, and fostering safe gambling habits. With over 134 million residents and a young, rapidly growing mobile user base, Ethiopia’s market is among the continent’s most dynamic. The new tax rates are now comparable to those in Kenya and South Africa, though Ethiopia’s unique industry structure may lead to disproportionately greater effects on operators and consumers.
Future Outlook and Unanswered Questions
The country’s betting landscape is at a pivotal juncture. As Africa’s gaming market grows from a value of $2.16 billion in 2024 to a projected $10.81 billion by 2033, Ethiopia is set to remain a key player. However, as Betrush notes, only agile companies will be able to thrive under mounting tax pressure. The industry’s future may hinge on whether the country can expand its gaming economy without prompting players to leave for less regulated alternatives.
| Measure | Previous Rate | New Rate (Effective July 17, 2025) |
|---|---|---|
| Withholding Tax on Winnings | ~15% | 20% – 25% |
| Operator Turnover Tax | 15% | 15% |
- Author
Daniel Williams
