Requirements For Starting A Gaming Software Company In Kenya

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How to register a gaming software company in Kenya, its registration process, the documentation and payments needed

“Gaming” means the playing of a game of chance for winnings in money or money’s worth; therefore the purpose of the gaming software is to promote the above function. The gaming family has grown in Kenya for the past 2-3 years and they currently enjoy a vibrant welcome from the public. According to a recent survey, Kenyans are among the biggest gamblers in Africa. As much as three-quarters of 17-to-35 years olds in the country have admitted to having placed a bet. This means that betting/gaming in Kenya is a viable business in Kenya.

Regulatory Framework

Gaming in Kenya is regulated under the Betting, Lotteries and Gaming Act, Chapter 131 Laws of Kenya which provides the overall regulatory regime governing gaming activities in Kenya.

The objectives of this statute is to control and license premises on which betting and gaming activities are carried out, impose and recover a tax on these and other related activities and authorization of public lotteries and other connected purposes.

The Act under Part 2 establishes the Betting Control and Licensing Board Act. The Board is responsible for regulating betting, lotteries and gaming activities through formulation and issuance of policy guidelines.

Registration Process

The Registration process in this case will begin from the Trademarking of the software under the Trademarks Act and lastly to applying for the license under the Betting, Lotteries and Gaming Act to operate the gaming software.

1.  Trademarks Act

Absolutely no one wants to share an idea they have worked so hard to come up with, with the public therefore it is proper that one trademarks the software so that they own exclusive rights to it and to prevent infringement and illegal problems thereafter.

Before applying for the registration of a trade mark, an applicant should conduct a search to find out whether the trademark is registrable or not and also whether there exists in the records a trademark which could be confused with the intended trade mark. An application for search and preliminary advice by the registrar should be made on Form TM 27 in the Trademarks Act. A search helps determine whether the application has a chance of success or if registering the name will be a waste of money and time, it also helps avoid potential law suits on infringements should one proceed to register without a search.

Thereafter one proceeds to apply for registration vide form TM 2 in the Act. The Application proceeds for examination by KIPI who will either approve or disapprove the Application. Once the Application is accepted, advertisement is the next step. The Trade mark is advertised in the KIPI Journal (which is published monthly). This is to allow any interested party an opportunity to raise objections to the pending application prior to registration.

If there is no opposition to the trade mark after the statutory 60 days period from the date of advertisement, or if an opposition has been decided in the applicants favor, the application will be registered and the Institute will issue a Certificate of Registration and enter the registration.

2.  Betting, Lotteries and Gaming Act

Section 5(1) of the Act, provides that an Applicant who would like to apply for a license or permit is required to make an application to the Board. The Applicant duly authorized to do the application will duly fill Form 13A which can be found in the Betting, Lotteries and Gaming Regulations. Thereafter they pay a non-refundable application fee of Ksh. 1,000,000 and license fees of Ksh. 500,000. The maximum processing time is approximately one month.

The form requires the applicant who is duly authorized by a partnership, body corporate to apply for the license to state his name, address the physical address where the gaming will be operated, the name under which the business will be conducted, the date and place of registration of the enterprise, the full names of all partners, directors and the secretary of the body corporate and names of managers if any. The applicants are also required to state their positions in the company.

The law requires the applicants to state whether they have ever been convicted of any criminal offence involving fraud or dishonesty, declared bankrupt or entered into any agreement with creditors and if so the applicant is required to provide the particulars.

They are also required to give particulars and the manner in which the games they propose to conduct will be organized and managed. The law also requires the applicant to state whether they have previously furnished the Board with any security which is a requirement under section 6 of the Act in respect of any other license issued by the Board. If not, they are further required to state the sum of deposit or any other security which they would be prepared to furnish the Board with.

Duration of the permit and license is a year from the date of issue. The Board will thereafter investigate the applicant’s character, reputation and financial standing. They can request for submission of declaration on further information to examine the application. They cannot issue a license until they satisfy an applicant is fit and proper as well as the premises are suitable for purpose.

Documentation needed

  • Recommendations from the Local authority
  • Completion of Form 13A
  • Investigation by the Board to determine suitability of applicant and premises
  • Investigation fee

Payments

Transaction costs under Trademarks Act

  • Search Fees: KSH. 2 000.00
  • Agency Fees: KSH. 1 000.00
  • Stamp Duty on TM1:   KSH. 500.00
  • Application fee for the first class: KSH. 4 000.00
  • Advertisement: KSH. 3 000.00
  • Registration: KSH. 2 000.00

Total: Ksh. 12,500.00

Transaction costs under Betting Control and Licensing Board

  • A non-refundable application fee of Ksh. 1,000,000
  • License fees Ksh.500, 000

Duration

  • Three months for the Trademark Registration to be complete.
  • Two months for the Investigation and Confirmation of full compliance with the requisite requirements.
  • One month to process the Public Gaming License.

Legal issues likely to arise

The most prevalent legal issues that are likely to arise are;

  • Irresponsible gaming amongst the players: Some players are usually addicted to the games and end up mentally affected or suicidal, therefore the betting company is solely blamed for the players’ over indulgence which may result in a suit instituted against the company.
  • Lack of age restriction on the gaming activities: Gaming with a young person is prohibited by Section 48 of the Betting, Lotteries and Gaming Act chapter 131 laws of Kenya. This is to protect children from the negatives effects associated with gambling.
  • Illegal gaming: when coming up with a gaming software, the licensee should adhere to the games they intended to establish when creating the software.  
  • Avoidance of tax payment: Gaming zones are required to keep a clean book of accounts and dutifully pay their taxes as per the Laws of Kenya
  • Security of the players’ information and funds:  Players key in important information about themselves when logging into the gaming portals and they also load their money as well, it’s the duty of the company to maintain their customer’s profiles and ensure their funds are well kept.
  • Money laundering: Gaming establishments are famed for laundering money which is a crime in Kenya under the Proceeds of Crime and Anti-Money Laundering Act No.9 of 2009, Laws of Kenya. The act of laundering should be avoided as the penalties are not kind.
  • Organized criminal activities.

Taxes

The Finance Bill 2017 was signed into law thereafter imposing a 35% tax on gaming firms.


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