Introduction

The gaming sector has become a multibillion-dollar industry worldwide. The success of the gaming sector is expected to rise as new markets evolve and technology becomes accessible. In Tanzania, the advent of mobile gaming has been the driving force behind most of the growth, with a low entry barrier and an extensive customer base. Previously, gaming involved making money from sales; however, developers and publishers now make money from multiple streams, including video game sales, microtransactions, subscription models, advertising and merchandising.

Currently, the gaming industry has transformed from a mere entertainment sector to one that attracts massive business investments. This growth presents opportunities for companies outside the industry to establish relationships with game developers and platform owners. From outsourcing services to data solutions and technology providers to major global brands, companies are increasingly recognising the value of engaging with game developers to establish fruitful business relationships.

In Tanzania, gaming businesses and activities are regulated by the Gaming Board of Tanzania (the Board), which was established under the Gaming Act Cap. 41 R.E 2023 (the Act) and the Gaming Regulations of 2023 (the Regulations).  The market is expected to witness significant growth in the coming years, owing to government initiatives to boost Internet access in rural areas of Tanzania by constructing fibre-optic infrastructure, considering the increasing youth population involved in the gaming business.

Regulation of Gaming in Tanzania

Notably, in Tanzania, all gaming activities are overseen by the government through the Board. The Gaming Board of Tanzania is a gaming regulatory body established under the Act and became effective on 1 July 2003. It is responsible for overseeing, monitoring and regulating the conduct of gaming activities in Tanzania.

The gaming industry in Tanzania was previously regulated under the Pools and Lotteries Act of 1967 and the National Lotteries Act of 1974. Until the onset of economic reforms in 1985, only the national lottery was conducted as a significant gaming activity in Tanzania by the defunct National Lotteries. The continued economic reforms necessitated the formulation of the National Policy on Gaming Activities and subsequently the enactment of the Gaming Act Cap. 41, hence the Gaming Board of Tanzania.

Major Responsibilities of the Gaming Board of Tanzania

According to section 7(2) of the Gaming Act, Cap 41, the Gaming Board of Tanzania is responsible for the following functions:

1. Licensing: The Board is responsible for the licensing of gaming activities in Tanzania in accordance with the Act and its Regulations.
2. Enforcing Compliance with the Gaming Law: The Board ensures that the continuity of gaming activities complies with and adheres to Gaming Legislation and other pertinent laws.
3. Advise on Imposition of Gaming Taxes: The Board provides technical advice to the Government on matters related to the imposition of gaming taxes.
4. Protection of the Public against Adverse Effects. The Board is mandated to safeguard the public from the potential negative social, economic, and behavioural impacts associated with gaming.
5. Dispute Resolution: The Board provides a formal mechanism for handling disputes and complaints arising between players, licensed gaming operators, and other stakeholders.

Gaming Activities

In a nutshell, the term gaming activities can be defined to refer to playing games on computers/electronic devices or participating in games of chance for prizes. This includes licensed casinos and software studios, often involving regulatory compliance and technology platforms.

Type of Gaming Licences and Certificates

The Gaming Act provides for several types of gaming licences and certificates, mainly:

1. Casino licence;
2. Slot machines or route operation;
3. Internet sports betting licence;
4. Sports betting terminal licence;
5. National lottery licence;
6. Virtual games licence;
7. Manufacturer’s certificate for the manufacturing of gaming equipment, including its spare parts;
8. Seller’s or distributor’s licence for supplying, selling, or servicing gaming equipment;
9. Service provider licence to provide services for gaming operation; and
10. Gaming consultancy licence.

LOCAL SHAREHOLDING REQUIREMENT

The Gaming Act imposes strict restrictions on foreign ownership. Section 14(4) of the Act explicitly states that the Board will grant a licence for commercial gaming undertakings only if not less than 5% of the applicant’s paid-up share capital is owned by Tanzanian citizens. This serves as a mandatory, statutory requirement. Applications lacking this structure are legally ineligible for consideration.

MINIMUM INVESTMENT CAPITAL

According to the Board, a local company intending to conduct gaming business in Tanzania must meet a minimum investment capital of USD 300,000/= whereas the capital requirement for a foreign company is USD 500,000.00. If the stakes in the company are equally held by locals and foreigners, the minimum capital shall be USD 400,000.00 or its equivalent in Tanzanian Shillings. A local company is a company incorporated in Tanzania, whose majority shareholder(s) is/are a citizen(s) of Tanzania. In contrast, a Foreign Company means a company incorporated outside Tanzania or a company incorporated in Tanzania but whose majority shareholder(s) is/are not citizens of Tanzania.

General Conditions for Gaming Licences and Certificates

Before applying for a gaming licence or certificate, an applicant must ensure that they meet the general conditions set under section 29 of the Act and commit to remaining qualified and compliant with the Board and other relevant authorities. The qualifications for obtaining a gaming licence are provided under Regulation 3, including the following:

1. Has never been denied a gaming licence by the Board or any other jurisdiction;
2. Has never had a gaming licence suspended or revoked in Tanzania or in another jurisdiction;
3. Has never withdrawn an application for any gaming licence anywhere for whatever reason;
4. Possesses gaming premises that are deemed suitable by the Board;
5. Complies with all provisions of the Act and Gaming Regulations, 2003, as amended from time to time;
6. Has not been convicted of any criminal offence involving fraud or dishonesty; and

Has proof of adequate financing available to pay all obligations and provide adequate working capital to finance gaming operations.

In addition to the above statutory conditions, other applicable conditions are that the applicant has:

1. Clean taxation history,
2. Technical ability,
3. Creditworthiness,
4. Clean compliance status,
5. Good business reputation,
6. a state-of-the-art technology, and
7. Requisite capital investment.

The process of obtaining a gaming licence

Once a person meets the conditions for the grant of the gaming licence and certificates, he or she will proceed to apply for the gaming licence under the following procedures:

Step 1. Submission of documents to the Gaming Board for processing the application as per section 30 (1) of the Act and Regulation 4 of the Regulations.

Activities:

1. 1. Comprehensive Business Plan or feasibility study.
   2. Market Research Report
   3. Duly filled application forms and application fees paid
   4. Dully filled personal declaration for each director
   5. A copy of the company’s memorandum and articles of association
   6. A certified copy of the certificate of the company
   7. Comprehensive Business Plan or feasibility study.
   8. Market Research Report
   9. Duly filled application forms and application fees paid
   10. Duly filled personal declaration for each director
   11. A copy of the company’s memorandum and articles of association
   12. A certified copy of the certificate of the company
   13. Evidence of sufficient financial capital for project implementation.
   14. Proof of citizenship of every incorporator, director and senior officer.
   15. Tax clearance from the income tax office of the country of origin of the applicant and every director
   16. Statements from two persons (not relatives) vouching for the good moral character and financial responsibility of the incorporator and the proposed directors
   17. Company Board of Directors resolution to invest in Tanzania
   18. Anti-bribe pledge form
   19. Responsible gaming guidelines
   20. Detailed information about the service provider, structure, equipment and services to be offered.
   21. Description of the technology and its source

Step 2: Upon receipt of the application, the Board will investigate to determine the applicant’s suitability as per Regulation 7 of the Regulations.

Activities:

1. 1. 1. A vetting of the shareholders, directors and business
      2. Applicants (except for support employees’ licences) are to pay for the investigation costs as determined by the Gaming Board

Applicants shall pay to the Board for transportation and its related costs, together with significant office expenses and other related expenses, until the conclusion of the investigation.

Step 3: The Board is to approve and grant a licence as per Regulation 12 of the Regulations

Once the applicant meets the conditions and pays the required fees and costs, the Gaming Board will issue the gaming licence or certificate

Tax on gaming activities

It is imperative to note that any person, partnership, or limited liability company that holds a licence to conduct gaming activities is obligated to pay gaming taxes based on the type of operations, which generally serves as a final tax on their income. In addition to the payment of gaming taxes, individuals and companies are also obligated to pay other taxes.

Existing issues in the Market

The following are the challenges faced by the gaming industry in Tanzania:

1. 1. 1. Illegal gaming activities:  Despite ongoing efforts to clamp down on them, the presence of illegal gaming operators continues to pose a challenge to the GBT, hindering efforts to protect players.
      2. Lack of a national lottery: Gaming in Tanzania has been without a national lottery operation to regulate the industry and conduct national lotteries.

Conclusion

Recently, in Tanzania, the gaming industry has transformed from a mere entertainment sector into a massive business investment. This growth offers opportunities for companies outside the industry to invest in the gaming industry.  Current reports from the Gaming Board of Tanzania (GBT) and regulatory updates indicate that the gaming industry in Tanzania is experiencing rapid growth, contributing over 3% to the GDP and providing significant employment. The Government of Tanzania has made efforts to promote and formalize gaming activities, transforming them into a major economic contributor. The government, through the Board, has focused on digitizing operations, strengthening the legal framework and fostering investment. However, to ensure more sustainable growth, the Government of Tanzania should improve regulations, technology, social responsibility, infrastructure, and address illegal gaming activities effectively.

Authored by 
Kasimu Ititi
Technology Department, Victory Attorneys and Consultants