The Treasury is planning to introduce a 20percent winning.
The plan was initially proposed and dropped in2016 due to difficulties in implementation.
The new taxation regulations are contained in the Tax Laws (Amendment) Bill 2018.
If the bill sails through, the tax charged on all winnings from betting, lotteries and gaming will be introduced.
This means that all betting companies will withhold the 20 percent from winning in order to remitted to the Treasury.
The bill was tabled in Parliament on Wednesday.
"The bill seeks to amend the Income Tax Act to introduce a tax on winnings," the proposed law reads in part.
Betting companies were up in arms after President Uhuru Kenyatta signed the Finance bill in 2017 that raised the tax rate on betting, lotteries and gaming activities to 35 percent.
According to the companies, the tax would put them out of business and challenged the Government to review it.