Uganda's Museveni Blocks Gambling Tax Overhaul Over a Casino Carve-Out

Uganda's plan to raise taxes on gambling has stalled at the last step. President Yoweri Museveni has declined to sign the Income Tax (Amendment) Bill 2026 and the Excise Duty (Amendment) Bill 2026, returning them to Parliament rather than assenting, after objecting to a clause that would tax betting winnings while exempting winnings from land-based casinos. Deputy Speaker Thomas Tayebwa relayed the president's position during a parliamentary sitting, telling MPs that Museveni is against passing Clause 11 of the Income Tax Amendment Bill into law.

The package it belongs to would reshape how Uganda taxes the sector. Finance Minister Matia Kasaija presented the Lotteries and Gaming (Amendment) framework to bring the tax on betting gross gaming revenue in line with casino GGR at 30%, ending a two-tier system that currently charges 30% on gaming and casino activity but 20% on betting, the lower rate reflecting betting's thinner margins. A second measure would add a 15% withholding tax on players' net winnings. Both were set to take effect with the new financial year that starts in July 2026, and together they would push Uganda toward the top of the tax range in the region.

What Museveni objected to

The president's problem is not the tax itself but its shape. Clause 11 introduces a withholding tax that raises the financial burden on bettors by taxing their winnings, but it inserted an exemption for winnings from land-based casinos licensed under the Lotteries and Gaming Act, 2016. Museveni argued that carving out one category while taxing another is both unfair and exploitable. "The exemption creates opportunities for tax avoidance and revenue leakage. There is no justification for exempting one category while taxing the other," he said, warning it would distort competition between operators.

A procedural fight followed. Some MPs suggested the disapproved bills should go back through a fresh legislative process, with Bbaale county MP Charles Tebandeke arguing the matter had been overtaken by events because the 11th Parliament that first handled the bills had since been dissolved. Tayebwa rejected that reading, reminding legislators that the constitution gives the president 30 days from the date a bill is presented to either assent to it or return it, and that the clock runs from presentation. The bills return to Parliament with the casino exemption as the sticking point.

The market Uganda is taxing

The stakes sit in a fast-growing market that already leaks heavily offshore. Uganda's interactive gambling produced a gross win of $438.3 million in 2025 and is forecast to reach $995.5 million by 2029, with sports betting the dominant vertical at $328 million of the 2025 interactive total. The unlicensed offshore market took another $114.8 million in gross win last year, more than 26% of all interactive activity, which is the number that makes a tax on winnings risky. A 15% withholding tax on what players take home lowers the effective payout on regulated books, and the closest regional precedent shows where that can lead. Kenya layered a 20% excise on stakes and a 20% withholding tax on winnings in 2019, and the tax turmoil drove SportPesa and Betin to suspend their Kenyan operations that year, cutting jobs and sponsorships before the government later walked back parts of the regime. A player-winnings tax that pushes Ugandan bettors toward the offshore sites already holding a quarter of the market would work against the revenue the bill is meant to raise.

Museveni's caution also fits his own record on the sector. In 2019 he ordered that no new gambling and betting licences be issued and that existing ones not be renewed on expiry, citing harm to young people, a stance that shaped Uganda's restrictive licensing posture through the National Lotteries and Gaming Regulatory Board. This time the objection is narrower and technical, aimed at the structure of the exemption rather than the industry as a whole, but the effect is the same delay.

For operators and the affiliates feeding them traffic, the veto is a reprieve rather than a resolution. A harmonised 30% GGR charge would compress margins hardest in low-margin sports betting, the market's largest vertical, thinning the commissions affiliates earn on Ugandan players, while the winnings tax would dent player value and lifetime returns across the board. Until Parliament reworks Clause 11 and the president signs, the current split rates hold and the July start date is off. The path Uganda takes will be read across the region, where markets from Kenya's new licensing regime to Ghana's crackdown on crypto gambling payments are recalibrating how hard to tax a sector that keeps growing while a large share of play stays offshore and unlicensed.