Why gaming deals need different due diligence
Buying into a gaming business in Tanzania is not like buying an ordinary company. The value sits in a license that can’t be transferred, a revenue stream that’s taxed and levied before any costs, and a betting system the regulator monitors in real time.
Most of the risk sits in places a standard financial review won’t look: how winnings tax has been calculated, whether the system has been tampered with, whether daily penalties have been building up, and whether anti-money laundering duties have been met. Problems in any of these can turn into tax assessments, license action or a business that can’t be banked after you’ve paid for it.
This checklist sets out what to examine, why it matters and where the rules come from.
Glenrich Consultants is a financial risk partner for gaming operators and investors in Tanzania. We carry out financial, tax and forensic due diligence for buyers and investors, so you know exactly what you’re buying before you sign.
First: understand what you’re actually buying
Four rules shape every gaming deal in Tanzania:
1. The license cannot be transferred. A gaming license “shall not be transferred to another person” (Gaming Act s. 28(3)). Buying the assets of a gaming business does not buy its license.
2. The license dies with the company. A license held by a company is deemed revoked if that company is wound up (s. 26(3)(b)). A post-deal restructuring that liquidates or merges away the licensed entity can destroy the license.
3. Share transfers need the Board’s approval. The Gaming Regulations require any transfer of shares in a licensee to be reported to the Board for approval. Failing to do so carries a penalty of TZS 7 million (Gaming (Amendment) Regulations 2022, Third Schedule, item 6, referring to reg. 18(5)).
4. The licensee must stay qualified. Licenses are granted on condition that the licensee “remains qualified” while the license is valid (s. 29(a)). New owners and directors become part of that test.
In practice, that makes most gaming acquisitions share deals: the licensed company is kept intact, and the Board’s approval of the share transfer is a condition of completion.
The checklist
1. Licenses and regulatory standing
What to check | Why it matters |
|---|---|
Every license held, matched against every activity the business actually runs (sports betting, online, terminals, slots, virtual games, number games) | Each activity needs its own license type (s. 28). An unlicensed product line is an offence and a valuation problem. |
License fees paid, and the cost of keeping them | Annual fees are significant: for example, USD 30,000 each for the principal sports betting and internet sports betting licenses, and USD 40,000 for internet casino (Gaming (Amendment) Regulations 2022, First Schedule). |
Premises licenses for every shop and outlet | Sports betting shops need their own license (TZS 1 million a year) (Sports Betting Rules, rule 29; First Schedule). |
Registration of every gaming device and terminal | Each sports betting terminal must be registered (TZS 30,000). Unregistered devices attract a penalty of TZS 40,000 each (Second and Third Schedules). |
Key employee and support licenses for relevant staff | Employing unlicensed key or support staff is penalised per person (Third Schedule, item 9). |
Renewal history and expiry dates | Licenses last 12 months, and renewals are due at least 30 days before expiry (ss. 16(2), 22). Late renewal costs 5% of the license fee plus 25% of that penalty for every month of delay. |
Conditions attached to each license, and any breaches | Breaching a license condition is an offence (s. 19). |
Security bond deposited with the Board | Required for operators other than casinos (s. 20). The Board can use the bond to settle unpaid prizes or statutory obligations (Internet Gaming Regulations, reg. 59(4)). |
Correspondence with the Board: inspections, audits, seizures, warnings, show-cause notices | The Board can inspect, audit, seize and destroy devices (s. 10), and must give 14 working days’ notice before revocation (s. 26). Any of these signals risk. |
An extract from the Board’s register of license holders | Anyone can inspect the register for TZS 20,000 (s. 24(2); First Schedule). It’s a simple independent check that the seller’s licenses match the Board’s records. |
2. Ownership and suitability
What to check | Why it matters |
|---|---|
Current Tanzanian citizen shareholding | At least 5% of paid-up share capital must be held by Tanzanian citizens (s. 14(4)). A buyer taking 100% breaks this. |
How the local shareholding is held | Nominee or side arrangements that hollow out the local stake create regulatory and legal risk. |
Every past share transfer, and whether the Board approved it | Unapproved transfers in the target’s history are an existing breach, and they can cast doubt on who the Board recognises as owners. |
Beneficial owners at every level | Reporting persons must identify beneficial owners (AMLA s. 15A(2)). The Board vets anyone interested “directly or indirectly” (s. 30) and requires declarations from every shareholder holding 5% or more (Internet Gaming Regulations, reg. 4(2)(f)). |
The buyer’s own suitability history | An applicant must never have been refused, suspended, revoked or have withdrawn a gaming application anywhere (Internet Gaming Regulations, reg. 3). If the buyer’s group has, the target may stop being qualified after completion. |
Prior refusals involving any 5%+ owner | Owners of 5% or more of a refused applicant face waiting periods of one to three years (s. 32). |
Capital levels | The Board’s procedure sets minimum investment capital of USD 300,000 for local companies and USD 500,000 for foreign-majority companies. A change of control can move a company from one category to the other. |
3. Gaming tax, winnings tax and levies
What to check | Why it matters |
|---|---|
Gaming tax returns and payments, month by month, reconciled to the betting system | Gaming tax on GGR (25% for sports betting) is due by the 7th of each month (s. 33). Gaps compound with interest. |
Copies of tax returns sent to the Board | Copies of TRA gaming tax returns must reach the Board within seven days of payment (Internet Gaming Regulations, reg. 54(3)). |
Gaming levies paid to the Board, separately from tax | Levies apply on top of gaming tax: 5% of GGR on virtual games and other s. 51 products, 2% on the national lottery, and TZS 10,000 per slot machine per month. Late levies cost 10% plus 25% of that penalty for every month (First and Third Schedules). |
How GGR has been calculated: winnings paid vs declared, unclaimed winnings, bonuses and free bets | GGR is stakes minus winnings paid out (s. 3). Where records are inadequate, the Board can estimate levies from audits, its own information or statistical analysis (Internet Gaming Regulations, reg. 51(3)). |
Winnings tax basis: gross payout or net of stake | The Act points to the gross amount, while older Board forms used net. If the target used net, quantify the difference. The operator, as withholding agent, carries the shortfall. |
Rates applied before and after 1 July 2025 | The Finance Act 2025 raised sports betting winnings tax from 10% to 12%. Systems that weren’t updated have under-withheld. |
Slot machine counts vs tax and levy paid | Slots carry TZS 100,000 tax plus TZS 10,000 levy per machine per month, whatever they earn. |
Withholding on advertising and promotion commissions | Brought into withholding tax by the Finance Act 2025. |
Group charges: platform, brand, software and management fees | Payments to non-residents attract withholding tax and must be priced at arm’s length. Unsupported charges can be disallowed. |
Open TRA audits, assessments, objections and appeals | The Tax Administration Act governs gaming tax enforcement (s. 33(6)). |
4. Betting system, servers and data integrity
This is where forensic review earns its fee. The betting system is both the revenue engine and the regulator’s evidence.
What to check | Why it matters |
|---|---|
Connection to the Board’s regulatory monitoring system, with no gaps | Licensees must send their transactions to the Board’s system (s. 86B, inserted 2019). Failure costs TZS 1 million for every day of delay (Third Schedule, item 3). Months of disconnection can add up to a liability bigger than the deal’s margin. |
Where the primary server is hosted | Internet operators must host their primary server in Mainland Tanzania. Hosting abroad needs Board approval for a fixed period, a local replica server, and a financial control system kept in Tanzania. Each failure costs TZS 7 million (Internet Gaming Regulations, reg. 9; Third Schedule, items 20–21). |
Whether a foreign hosting approval is about to expire | When the approved period ends, the server must move to Tanzania (reg. 9(3)). Migration cost and downtime belong in the price. |
A physical administration centre in Tanzania with at least one director and one key person | Required for internet operators (reg. 12). |
Board approval and lab certification of the system and every upgrade | Software must be certified and approved before use, and supplied by a licensed manufacturer or distributor (Sports Betting Rules, rules 21–22). |
The Board’s remote read-only access | Required by rule 24, and it means the Board already sees what you’re about to find. |
The significant events log, especially Type 3 events | Cancelled bets after the event, results cancelled or amended, betting protection overrides and changed event data (rule 26) are the classic signs of manipulation and insider fraud. |
Manual journal entries and player account adjustments | All changes need a clear audit trail (rule 23(5)(b)), and player account adjustments must be authorised by management (Internet Gaming Regulations, reg. 45). |
Daily backups, kept for five years | Required by rule 18. Missing backups make history impossible to verify. |
Any database restore or replacement | Prohibited without Board approval (rule 18(4)). |
System time against standard time | The server must stay within 10 seconds of East African Time (rule 27). Time drift around kick-off can let late bets through. |
Casino surveillance systems | Failures in surveillance installation, operation or records carry a TZS 10 million penalty (Third Schedule, item 13). |
5. Anti-money laundering compliance
Gaming operators are reporting persons under the Anti-Money Laundering Act. Weak compliance is inherited by the buyer, along with the bank relationships that depend on it.
What to check | Why it matters |
|---|---|
Risk assessments: existence, approval by senior management, updated at least yearly, done before new products | Required by AMLA s. 15. |
A named money laundering reporting officer, training records and independent audit reports | Required by AMLA s. 18. |
Suspicious transaction reports filed, and whether filed within 24 hours | AMLA s. 17. A business that has never filed a report is a red flag in itself. |
Cash transaction reports for TZS 5 million and above | Gaming Act s. 60. |
Identity verified before any wager | Internet operators may not accept a bet until the player’s identity has been authenticated (Internet Gaming Regulations, reg. 13(2)). |
Customer due diligence files, especially for politically exposed players | AMLA s. 15A. |
Records kept for 10 years | AMLA s. 16. |
Any FIU or Board sanctions | Sanctions can include suspending business activities or the license (AMLA s. 19A). |
Banking and mobile money relationships: any restrictions, closures or warnings | Banks often act on weak controls before regulators do. |
6. Player money and liabilities
What to check | Why it matters |
|---|---|
Player wallet balances, kept separately identifiable from the operator’s own funds, and fully covered by cash | Required by reg. 44 of the Internet Gaming Regulations. Any shortfall is a hidden debt. |
Any credit given to players | Prohibited without Board approval (reg. 46). |
Unclaimed winnings and prizes | Sports betting operators must keep an unclaimed winnings register (rule 12). Internet operators must pay 25% of unclaimed prizes to the Board every quarter and hold 75% for guaranteed jackpots (reg. 40). Check that both have been done. |
Outstanding bets and jackpot liabilities at completion | These need to be valued and allocated in the price. |
Bonus and free-bet liabilities | Often understated, and they also affect GGR. |
Agent and retail receivables | Cash held by agents is a common source of losses and fraud. |
For casinos, the bankroll | Casinos must hold enough cash to protect players against defaults, and report it to the Board monthly (Internet Gaming Regulations, reg. 58). |
7. Responsible gaming, marketing and consumer compliance
A business that grew through aggressive marketing may have grown in breach of the rules.
What to check | Why it matters |
|---|---|
Board approval of advertisements | Gaming advertising needs Board approval, and the Board can order an advertisement withdrawn (Internet Gaming Regulations, reg. 56; Advertising Code 2023). |
Bonus and free-bet promotions | The Advertising Code 2023 prohibits offering credit, vouchers or rewards as inducements to gamble, except approved loyalty programs (cl. 2.2.1(h), 2.2.4). Growth built on bonus offers may not be sustainable. |
Broadcast timing | No gaming ads on radio or TV between 6:00 am and 2:00 pm on weekdays, except on dedicated sports channels, and none around news, live national events or Parliament (cl. 3.2–3.3, 3.8). |
SMS and phone marketing | Unsolicited calls or SMS need prior written Board approval (cl. 2.2.6). |
Responsible gaming messages and the Board’s toll-free number | Required on all advertising, with minimum space requirements (Part Three). |
Age verification controls | Allowing players under 18 carries fines of TZS 1 million to TZS 5 million and imprisonment. Internet operators must have effective systems to prevent it (reg. 39). |
Self-exclusion and deposit limits | Self-excluded players can’t be reinstated for six months without Board approval, and must not receive promotions. Changes to deposit limits only take effect after seven days (regs. 48–50). |
Game rules in Kiswahili and English | Required for internet operators (reg. 57). |
The problem-gambler register and monthly reports to the Board | Required by rule 14. |
8. Financial statements and reporting
What to check | Why it matters |
|---|---|
Audited financial statements, prepared under Tanzanian accounting standards, audited by an NBAA-registered auditor, and filed with the Board within 180 days | Required by reg. 52 of the Internet Gaming Regulations and rule 15(3) of the Sports Betting Rules. Late or non-compliant filing costs TZS 1 million (Third Schedule, item 18). |
A full reconciliation: betting system → GGR → tax returns and levies → bank and mobile money → financial statements | This is the single most revealing test. Breaks between any two layers point to tax risk, fraud or both. |
Revenue trends by channel, product and agent | Concentration in a few agents or products is both a commercial and a fraud risk. |
Structuring the deal
Due diligence findings should flow directly into the deal terms:
- Share deal, not asset deal, in most cases, because the license can’t be transferred.
- Make the Board’s approval of the share transfer a condition of completion. Skipping it costs TZS 7 million and puts the license at risk.
- Keep the licensed company alive. Don’t plan a post-completion liquidation or merger that would revoke the license.
- Preserve the 5% citizen shareholding and make sure new owners and directors will pass suitability vetting.
- Price the exposures. Quantified tax and levy gaps, accrued daily penalties, server migration costs, player liabilities and remediation costs belong in the price, an escrow or specific indemnities.
- Use warranties and indemnities for tax, levies and compliance covering at least the period TRA and the regulators can reach back.
- Plan the first 100 days: monitoring system connection, server compliance, anti-money laundering remediation, tax basis corrections, marketing compliance and head-office reporting.
Red flags that should stop or reprice a deal
- Licenses that don’t match the products being sold
- Past share transfers made without Board approval
- A local shareholding that exists on paper only
- Gaps in the connection to the Board’s monitoring system, at TZS 1 million a day
- A primary server abroad without approval, or with an approval about to expire
- Winnings tax still at pre-2025 rates, or on an undocumented basis
- Unpaid gaming levies
- Frequent Type 3 significant events or manual journals in the betting system
- Player wallet balances not separated or not covered by cash
- Growth driven by bonus offers or unapproved advertising
- No suspicious transaction reports ever filed, or no money laundering reporting officer
- Breaks between the betting system, tax returns and bank records
- Bank or mobile money accounts under restriction
Frequently asked questions
Can I buy a gaming license in Tanzania?
- A license can’t be transferred (s. 28(3)). Investors usually buy shares in the licensed company and keep it intact.
Does the Gaming Board need to approve a share purchase?
Yes. Share transfers in a licensee must be reported to the Board for approval, and failing to do so carries a TZS 7 million penalty. Build the approval into the deal timetable as a condition of completion.
Does a foreign buyer need a Tanzanian partner?
The licensee must keep at least 5% of its paid-up share capital in the hands of Tanzanian citizens (s. 14(4)), so a foreign buyer can’t take 100%.
What’s the biggest hidden risk in gaming acquisitions?
Penalties and tax that build up over time. Errors in GGR or winnings tax compound monthly with interest, and a break in the connection to the Board’s monitoring system costs TZS 1 million for every day it continues.
Can an online operator host its servers abroad?
Only with Board approval, for a fixed period, with a replica server and the financial control system in Tanzania. After the approved period, the primary server must move to Mainland Tanzania.
Is a Mainland gaming license valid in Zanzibar?
- The Gaming Act applies to Mainland Tanzania only (s. 2).
Your financial risk partner in Tanzania
Buying into a Tanzanian gaming business from abroad means relying on someone you trust on the ground. Glenrich looks after your interests before, during and after the deal:
1. Before you sign: financial, tax and forensic due diligence. We reconcile the betting system to GGR, tax returns, levies, bank and mobile money records and financial statements. We quantify tax, levy and penalty exposure, test anti-money laundering and marketing compliance, and review system logs for signs of manipulation and insider fraud. You get a clear report of what you’re buying and what it’s really worth.
2. During the deal: structuring and protection. We help structure the transaction around the license, share transfer approval, ownership and suitability rules, and turn our findings into price adjustments, escrows, indemnities and conditions.
3. After completion: oversight and control. We fix the gaps we found, put independent financial and compliance oversight in place, and give your board and head office clear monthly reporting on the business in Tanzania.
Considering a gaming investment in Tanzania? Let’s talk.
If you’re an investor, CFO or deal team outside Tanzania looking for a trusted local partner, we work with international clients by video call, in English, around your time zone.
[Book a free introductory call] · or WhatsApp Thomas at +255 745 50 99 66
Glenrich Consultants · Samora Tower, Dar es Salaam, Tanzania
About the author
Thomas Mubondo, CPA, CFE is the founder of Glenrich Consultants, an accounting, advisory and business structuring firm in Dar es Salaam. He advises foreign investors and growing businesses across Tanzania Mainland and Zanzibar on tax, financial controls and fraud risk.
Sources
- Gaming Act, Cap. 41 (Revised Edition 2023)
- Gaming (Amendment) Regulations, 2022 (GN No. 478S), First, Second and Third Schedules
- Gaming (Internet Gaming) Regulations, 2022 (GN No. 478T)
- Gaming Advertising Code of Practice, 2023
- Finance Act, 2025 (Act No. 11 of 2025)
- Anti-Money Laundering Act, Cap. 423 (Revised Edition 2022)
- Sports Betting Rules, 2016
- Gaming Board of Tanzania, Procedure for Obtaining Gaming Licence in Tanzania
Related: Gaming and Betting Licenses in Tanzania · Gaming Tax in Tanzania · Anti-Money Laundering for Gaming Operators