Kenya proposes KSh2bn threshold and seven-year licence for National Lottery operators

Kenya’s Gambling Regulatory Authority has tabled draft National Lottery rules that would set a very high entry bar for operators, formalise retail and digital distribution channels, and tighten AML, data and compliance obligations across the future lottery system.

Kenya’s lottery reform is moving into a much more defined phase after the Gambling Regulatory Authority published the draft Gambling Control (National Lottery) Regulations, 2026 as part of the March-April public participation process under the Gambling Control Act, 2025. The official notice confirms that the consultation window ran from 25 March to 13 April 2026, placing the proposed framework at the centre of the country’s broader push to operationalise its new gambling regime.

The headline requirement is financial scale. Under the draft rules, the operator procured by the National Lottery Board must have gambling capital of at least two billion shillings, while the licensing eligibility criteria also require a registered office in Kenya, tax compliance, anti-money laundering and counter-terrorism financing compliance, data-controller or data-processor registration where applicable, and shareholding that satisfies the Act. The same section also states that at least 30 percent of shares must be held by Kenyan citizens, underlining how restrictive the framework could become for would-be entrants.

The proposed licence structure is also long-term and expensive. A National Lottery licence would be valid for seven years from the date of issue. In the fee schedule, the draft sets a KSh10m application fee and a KSh50m licence fee for the National Lottery, alongside renewal and premises-transfer charges. That combination suggests Kenya is designing the lottery as a tightly controlled, high-barrier market rather than an open-access segment.

The draft also gives a clearer picture of how retail and digital distribution would be organised. In the application form, operators must specify whether the lottery will run through physical operations, online operations, or both, and they must disclose proposed ticket distribution and sales channels, including estimated retail outlets or agents, online platforms, mobile applications and estimated numbers of points of sale. Elsewhere, the rules say authorised general retail outlets selling National Lottery products will not automatically be treated as dedicated National Lottery premises, a distinction that could matter for rollout strategy and location control. The National Lottery Act itself also allows the operator, after consultation with the regulator, to authorise suitably qualified persons to act as agents for ticket sales.

Compliance requirements run through the entire draft. Applicants would need to show system compatibility with the authority’s central management system, provide real-time monitoring access and server information, and submit evidence of AML compliance. Online lottery systems would have to meet prescribed cybersecurity standards, undergo vulnerability and penetration testing, maintain audit trails, and remain open to annual testing and certification. The framework also requires player identity and age verification, secure payment gateways, suspicious transaction reporting, KYC controls, data protection compliance, and internal systems designed to detect money laundering, terrorism financing and fraud.

Taken together, the draft rules show that Kenya is not preparing a light-touch lottery launch. The likely direction is a highly supervised model built around strong capitalisation, visible local presence, declared retail distribution, and intensive operational oversight. That may improve control and integrity, but it would also sharply narrow the field of companies capable of bidding for the market if the final text stays close to the current draft.