Local authorities said the new measure not only pretends to prevent the negative impact of gambling among the youngest population, but also is trying to tap the easy revenues the industry is spawning.
According to a report published in All Africa web site, the government has raised taxes on the industry and recently proposed to tax winnings.
The Uganda Revenue Authority collected USD 9.6M from gaming in the past financial year. Local governments see slot machines and sports betting kiosks as a source of revenue.
Edgar Agaba, executive director of the National Lotteries and Gaming Regulatory Board, told journalists in Kampala on Thursday that the industry's shift online has presented a regulation challenge.
"Trying to stop gaming is a waste of time," Mr Agaba said, adding that the government will push gaming firms to promote corporate social responsibility programmes.
He described as a necessary evil the 35 per cent tax and the employment of at least 5,000 people in nine gaming companies.
About 400 online gaming companies are accessible to Ugandan punters. There is concern that gambling could be used to launder money.
"We are going to work with the Financial Intelligence Authority to see how to track this," Mr Agaba said.
The regulations set a minimum age of 25 years for anyone going into gambling premises and the government wants this strictly enforced.
"Any operator of those gaming sites, both online and land-based, risks having their licences revoked or suspended if found permitting under-25s to gamble. Culprits face up to two years in jail or a fine of Ush1 million ($285.7)," he said.