Casino operators warn 15% tax could put 2,500 jobs at risk

Casino operators in Uganda have asked the government to reconsider the 15 per cent withholding tax on winnings, warning that the measure could threaten more than 2,500 jobs and push gamblers towards illegal operators.

Through the Uganda Gaming Operators Association (UGOA), the operators argue that collecting the tax from players at physical casinos presents challenges that could increase operating costs and reduce government revenue.

The association says licensed casinos employ more than 2,500 Ugandans, including dealers, cashiers, cleaners, security guards and hospitality workers.

It warns that the tax could also affect businesses that supply casinos with food, transport, maintenance and other services.

The concerns emerged during a meeting between gaming industry representatives and the Private Sector Foundation Uganda (PSFU) in the week of November 6, 2026.

PSFU executive director Stephen Asiimwe led the engagement, during which the foundation agreed to examine the industry's concerns.

Its policy department will assess how the tax could affect jobs, businesses and livelihoods before preparing an advocacy paper.

UGOA wants the government to retain the existing 30 per cent tax on gross gaming revenue for physical casinos.

Under this arrangement, the government taxes the difference between the money players wager and the winnings casinos pay out.

The operators argue that this system offers a more practical way to collect revenue than deducting tax from individual players' winnings.

They explain that physical casinos differ from online gambling platforms, where operators can track transactions through individual accounts.

At conventional casinos, players can buy chips several times, move between games and exchange chips before collecting their remaining money.

This makes it difficult to establish how much a player has won or lost during a visit.

For example, someone who enters a casino with Shs 1 million and leaves with Shs 700,000 has lost Shs 300,000.

Although the player collects Shs 700,000 at the cashier, that amount does not represent a profit and should not attract withholding tax.

UGOA says determining each player's actual winnings would require new identification systems, transaction monitoring, additional employees and detailed financial records.

It fears that these expenses could weaken licensed casinos and drive customers towards unregulated gambling establishments.

UGOA chairman Robert Kabonero said the industry supports taxation but wants a system that reflects how physical casinos operate.

"We are not opposed to taxation, and as licensed operators, we pay our fair share. What we are asking for is a practical and fair collection approach that reflects how land-based casinos operate. We believe the existing 30% gross gaming revenue tax, supported by stronger oversight and enforcement, provides a more reliable way for government to collect revenue," Kabonero said.

The association proposes separate licences for online and physical casinos to prevent operators from exploiting differences in taxation.

It also wants clearer transaction classifications, separate financial records, independent audits and stronger penalties for businesses that deliberately misreport their activities.

According to UGOA, disagreements over how to tax winnings at physical casinos date back to 1994.

In 2019, the Solicitor General indicated that the withholding tax provision appeared better suited to sports betting than conventional casino games.

The Uganda Revenue Authority (URA) conducted a study visit in 2022 to examine the issue.

Parliament subsequently removed the 15 per cent withholding tax on gaming winnings in 2023 after concerns emerged about identifying taxable winnings in games such as roulette, poker and slot machines.

The government instead increased the tax on operators' gross gaming revenue to 30 per cent.

However, the dispute resurfaced during consultations in April 2026, when stakeholders discussed further engagement and international comparisons.

UGOA claims that no other country imposes a comparable withholding tax on individual net winnings collected at physical casinos.

The association says the difficulties in tracking players' transactions make such a system impractical.

Despite its objections, the industry acknowledges that gaming taxes have become an important source of government revenue.

Figures cited by the association show that tax collections from Uganda's gaming sector rose from Shs 17.4 billion in the 2015/16 financial year to Shs 323 billion in 2024/25.

Collections reached Shs 176.7 billion during the first half of the 2025/26 financial year, against an annual target of Shs 391 billion.

UGOA says the withholding tax is expected to contribute towards Shs 65 billion in government revenue during the 2026/27 financial year.

However, it wants the government to explain how much of that money it expects to collect from sports betting, online gambling and physical casinos.

The association also wants an assessment of whether the additional revenue would compensate for possible losses in existing tax collections.

Kabonero warned that the effects of the tax could extend beyond casino owners.

"This is not simply about casino operators. We are talking about employees who depend on these jobs, families supported by their incomes and local businesses that supply our establishments. We recognise the Government's responsibility to mobilise revenue, but tax measures must also consider their potential impact on employment, business sustainability and existing revenue collections," he said.

The association has called for fresh consultations involving government agencies, casino operators and other stakeholders.

It also wants a joint technical committee to examine the taxation challenges and recommend a workable collection system.

UGOA maintains that the government should suspend the application of withholding tax to winnings from physical casinos until authorities establish a reliable method of calculating each player's net earnings.