Police said the boat was "in poor mechanical shape" and was overloaded with passengers on a lake cruise when it capsized.
By Sunday morning, UPDF said 30 bodies had been retrieved from the water and 26 other people rescued alive.
The boat carrying almost 100 revelers sank in bad weather on Saturday in the latest deadly incident to affect passenger boats on Africa's largest lake.
Police spokesman Asuman Mugenyi said: "We expect (the number of passengers) is beyond the capacity of the boat".
Some of the revelers on the boat before it capsized
Bodies have been taken to Kampala City Mortuary for post-mortem. "It can be fine on land but bad weather on the lake".
"Such boats can not carry more than 50 people", said lawmaker Johnson Muyanja, who represents part of the district of Mukono, the site of the accident.
Two fishing boats that came to the aid of passengers were overwhelmed with people and capsized, according to the BBC.
But closer to Uganda, as authorities continued to pull bodies out of the water, it was unclear who, if anyone, would be held responsible for the deaths.
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Police arrested the seven fishermen and charged them with endangering the life of the American by taking him to a prohibited area. Chau was apparently shot and killed by arrows, but the cause of death can't be confirmed until his body is recovered, Mr.
Early Sunday a police helicopter hovered low over the spot where the boat sank, as a team of divers searched for bodies under calm waters.
Many Ugandans are questioning the worthiness of the boat. "Help us!' and the boat was sinking very quickly", Sam Tukei, one of several men who used fishermen's canoes to try to rescue people, told the Associated Press.
The boat was reportedly hired out for weekend parties.
There was a party going on aboard the boat, with loud music, at the time of the accident, Mr Museveni said.
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In September this year, 200 people were killed in a Tanzanian ferry disaster on Lake Victoria, with officials saying it had been dangerously overcrowded.
In 1966, more than 800 people lost their lives on Lake Victoria when the MV Bukoba sank off the town of Mwanza, according to the Red Cross.
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