The High Court has allowed the Gambling Regulatory Authority of Kenya (GRAK) to implement the contested Gambling Control (Licensing) Regulations, 2026, including the collection of licensing fees, pending the determination of a case challenging the rules.

The court varied an earlier order issued on August 7, 2026 that had suspended the implementation and enforcement of new licensing fees imposed on bookmakers, casinos and other gaming operators.

The ruling followed an application by the regulator, which argued that suspending the fee provisions had effectively halted the processing of new licence applications.

The authority argued that although the court had allowed other parts of the regulations to remain in force, licensing could not proceed without the payment of fees, which are prescribed under the regulations.

The regulator told the court that 246 licence applications were pending and could not be processed because the fee component had been suspended.

“Based on that, it would be imprudent to stay the operation of the regulations, pending the hearing and determination of the substantive motion,” the court said.

The judge heard that the fees could not be separated from the licensing process because the issuance of licences is conditional upon payment of the prescribed charges.

He further observed that the fees are contained in schedules to the regulations and not in the Gaming Control Act, 2025. As a result, there was no alternative legal framework under which licensing fees could be charged after the repeal of the Betting, Lotteries and Gaming Act.

“Faced with that scenario, public interest would frown upon leaving the gaming industry unregulated, while the main dispute herein rages,” the judge said.

The court also took into account an undertaking by the regulator that any fees collected would be refunded should the court ultimately find that the regulations or the fees were unlawful.

“In view of what I have discussed above, I am persuaded that there is merit in the application dated August 11, 2026,” the judge ruled.

“I hereby confirm and allow the orders that I made ex parte on August 13, 2026, and grant, in addition, prayers 4, 5 and 7 of the said application. The costs of this application shall abide the outcome of the main cause.”

The case will be mentioned on September 21.

Thomas Buckley Opar Owuor and Ken Brance against Prime Cabinet Secretary and Cabinet Secretary filed the petition for Foreign and Diaspora Affairs Musalia Mudavadi and the Gambling Regulatory Authority of Kenya.

The petitioners are challenging the legality of the regulations, particularly the sharp increase in licensing fees imposed on bookmakers, lotteries, casinos, bingo operators, totalisators and pool betting firms. They have also questioned the Cabinet Secretary's authority to make the regulations.

The government has defended the regulations, arguing that they are necessary to operationalise the Gaming Control Act No. 14 of 2025, which came into force in August last year and established a new framework for regulating, licensing and supervising gambling activities.

According to the Authority, the regulations provide critical details on licence categories, application procedures, financial capacity requirements, technical standards and renewal processes.

The dispute dates back to July when the court suspended the implementation and enforcement of the regulations. The Attorney General later sought a review of that order, leading the court to allow most provisions to remain in force while suspending the increased fees under the Second Schedule and capital requirements under the Third Schedule.

However, the regulator returned to court arguing that the suspension had created an operational paralysis because licence applications could not be processed without payment of fees.

The petitioners opposed the application, arguing that the increased fees were the central issue in the case and that allowing their collection would undermine the purpose of the stay order.

They warned that many operators would struggle to raise the new fees, forcing some to abandon licence applications, scale down operations or exit the market altogether. Others, they argued, could be forced to borrow heavily to meet the requirements, leading to job losses and reduced investment in the sector.

The petitioners further maintained that any future refund of fees would not adequately compensate businesses for those losses and would not restore the status quo.

They also disputed the regulator’s claim that licensing had ground to a halt, arguing that the authority had continued receiving applications and levying charges after the Gaming Control Act came into force in August 2025 and before the regulations took effect on June 29, 2026.

But the High Court found that both sides acknowledged a critical legal gap. While the Gaming Control Act contains transitional provisions relating to gambling taxes, it does not provide a transitional framework for licensing.

The judge noted that in the absence of the disputed regulations, neither the new law nor the repealed Betting, Lotteries and Gaming Act provided a workable framework for processing and issuing licences.

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