Midiwo’s Bill on betting appears headed for rejection

After being disowned by Minority Leader Francis Nyenze and facing resistance by Members of Parliament (MPs), Gem legislator Jakoyo Midiwo’s Bill to restrict betting appears headed for rejection by the National Assembly next Tuesday.

Debate on the second reading of the Bill on betting, which began on Thursday, was regarded with suspicion by a large number of MPs.

However, the experienced lawmaker defiantly stared down his opponents after Speaker Justin Muturi allowed debate to proceed.

Members of the Labour and Social Welfare Committee have been cautious about the Bill, with chairman David Were keen to have stakeholders consulted before the proposed law moves further along the legislative pipeline.

Kipipiri MP Samuel Gichigi spoke of the suspicion in the unsuccessful attempt to have the Second Reading postponed until after the MPs have a better understanding of the Bill through a report the committee would prepare.

“It appears that there is undue pressure to pass this law for some motives that are not very clear,” said Mr Gichigi as he asked for the committee to be given an opportunity to meet all stakeholders first.

He added: “Let it not appear that it is an emergency that the Second Reading of this law must be done today or tomorrow yet we have many Bills that came to the House before this Bill. I understand the urgency, but let it not appear that there is something on fire. People out there are reading ulterior motives”.

Mr Nyenze caused a stir when he said that although the proposed law had been labelled an opposition Bill, he was not party to its preparation.

“I did not sign this Bill because it was a Private Member’s Bill. It is now purported that I signed it. We never discussed this Bill as a party,” said Mr Nyenze.

The Minority Leader joined in the criticism of the Bill’s intention to kick foreign investors out of the gambling business that had been spoken of at an earlier meeting with the Labour and Social Welfare Committee.

Mr Nyenze equated the attempt to restrict the gambling industry by overregulation to killing brewers to end the harmful effects of taking alcohol.

“There are many accidents on the roads and people are blamed for having taken beer. We do not legislate to ban beer drinking but we regulate it. It is the same with gambling and betting,” said Mr Nyenze.

The Minority Leader’s contributions were cut short as the time for the sitting ended but MPs opposed to the Bill said it is likely to be rejected the same way a proposal to set up a select committee to inquire into betting was thrown out last year.

GENERAL CAUSE

Cautious at being seen to be casting aspersions on a colleague, one of the MPs told the Nation that there is a general cause for concern about the manner in which regulations for the betting industry are being approached.

The same was also a central theme of the interaction between representatives of the Association of Gaming Operators – Kenya (Agok) and the Labour and Social Welfare Committee.

The association's chairman Ronald Karauri, who is also the chief executive officer of the betting website SportPesa, said the Bill appeared to be part of a concerted effort targeting to cripple the industry.

He was also critical of the impression created by some MPs that betting is neither properly regulated nor taxed or serves as a conduit for money laundering and perpetuation of illegal activities.

“Everything is online, transactions are with the bank and it is impossible to do any money laundering, especially with online gaming,” said Mr Karauri.

He argued that with betting firms online, locking out the Kenyan ones would not solve the perceived ills from gambling as they would remain accessible.

The association also distanced itself from operators of slot machines, whose activities have gone beyond urban centres, with their physical presence even at rural shops, a cause for concern as children can easily access them.

Authorities and county governments have found it difficult to handle the slot machine operators as some obtained court orders safeguarding their work.

'TOTALLY OUTSIDE'

“It is impossible to ensure children don’t go there. I think that is where the challenge comes and that is probably where the sponsor of the Bill comes from. They are totally outside and they are illegal,” said Mr Karauri.

Mr Mwangi Muturi, the association’s lawyer, said the Bill also creates the impression that there is no regulator yet the Betting Control and Licensing Board is in place and active.

The association was also critical of provisions restricting betting to between 7 pm and 7 am and gaming between 5pm and 7am on the basis that there is no basis for this and no way this can fulfil the Bill’s objectives.

Mr Midiwo’s Bill proposes to increase betting tax from 7.5 per cent to 15 per cent of their revenues, lottery tax from five per cent to 20 per cent of their turnover, gaming tax from 12 per cent to 20 per cent of revenue and prize competition tax from 15 per cent to 20 per cent.

It also proposes the introduction of a “winnings tax” at the rate of 20 per cent of what a person wins.

“Taxation measures should be broad based and burden all individuals or entities in similar economic circumstances. The proposed measures in the Bill are discriminatory to the betting, lotteries and gaming industry and place an inordinate and unfair tax burden on it,” said Mr Muturi.