On 1 November, the National Lottery Authority of Senegal (LONASE) began enforcing a new tax policy, demanding a 20% levy on all gambling winnings. This change, embedded within Law No 17/2025 as part of Prime Minister Ousmane Sonko’s economic reforms, has sparked significant public outcry and backlash from the gambling community.
In response to the new legislation, Senegalese bettors organized a 72-hour strike last week, condemning the law as blatant exploitation. Reports indicate that from 3 November to 6 November, gambling activities nationwide were completely boycotted by players, reflecting widespread dissatisfaction and resistance.
Despite a slight easing of tensions post-strike, prominent gamblers argue that the tax policy is manipulative and unjust. One high-stakes bettor expressed skepticism about the future of retail gambling, suggesting that few would be willing to forfeit 20% of their winnings to what they termed a “scam-tax”. The sentiment among many in the gambling community is that the black market might see an influx of new patrons who seek to avoid the formal sector’s stringent taxation.
Joël Elifaz Dansou, a noted tax expert in Senegal, offered insights into the rationale behind the tax law. During an interview, he explained that Law No 17/2025 modifies previous fiscal codes, introducing taxes on both gambling operators and individual winnings. While operators like LONASE face income taxes, winnings are subject to a withholding tax applied before payouts.
Dansou emphasized that for the government, this tax serves a dual purpose. Beyond augmenting state revenue, it aims to mitigate excessive gambling, a behavior perceived as risky. Prior to this law, gambling income was not subject to taxation, Dansou clarified.
To ensure compliance, LONASE mandated updates to the ticketing systems of licensed operators, integrating automated tax deductions at the point of payout. This system mirrors practices seen in other African jurisdictions, where similar automated models facilitate tax collection. Clear communication and transparency are deemed crucial at this juncture to maintain public trust.
LONASE, in its public statement, described the tax as a civic contribution to national development. However, concerns linger about the potential for a burgeoning black market. Some speculate that unregulated platforms, bypassing the tax system through alternative payment gateways, could attract many bettors. Dansou acknowledged this risk, noting that while the appeal of avoiding taxes is understandable, unlicensed platforms present greater dangers, potentially outweighing their benefits.
He cautioned that consumers need to weigh these risks carefully. The use of mobile payments, although increasingly regulated by the Central Bank of West African States (BCEAO), still poses challenges for traceability and oversight. Dansou stressed that while tax evasion attempts are expected, responsible measures by the government could curb the rise of unofficial platforms.
Both bettors and licensed operators face the ramifications of this law. Operators, like bettors, must now contribute 20% of their prize pools to the state, reflecting a broader strategy to boost public coffers. This has led to concerns about the ability of the market to withstand these pressures.
When asked if the new tax could destabilize the market, Dansou was optimistic that it would not. He pointed to the socio-economic factors driving the rise in gambling, such as stagnant income growth and job insecurity, which compel many to gamble as a means of supplemental income. This ecosystem, particularly around sports betting, has become a vital source of livelihood for some, Dansou observed.
He argued that while the tax is perceived as burdensome, it does not inherently threaten the survival of the gambling industry. Those who rely on gambling for steady income are unlikely to be deterred. Dansou highlighted that this reform introduces a degree of tax fairness, bringing previously untaxed revenues under the fiscal umbrella.
The reform may, however, deter occasional gamblers who engage in betting purely for entertainment. Moving forward, the impact of this policy will be clearer once LONASE and tax authorities release pertinent data. This information will be crucial in assessing the reform’s true effects on the gambling sector in Senegal.
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