Betting firms reap big from gambling craze among Kenyans

In her book Kenya@50: Trends, Identities and the Politics of Belonging, Dr Joyce Nyairo says it is fair to argue that in the past 10 years Kenya has become a nation of gamblers.

“Not only do promotional offers and lotteries, of all kinds, run by all sorts of corporates, dominate the media scape — from radio to TV, the dailies, the Internet and outdoor advertising — casinos have proliferated tenfold,” the cultural analyst says in her book.

Nyairo adds that the proliferation of casinos in major urban centres in Kenya is both a reflection of, and an impetus for, a growing gambling mentality.

If Kenya has become a nation of gamblers, nowhere has this been reflected than in sports betting, which entails the activity of predicting sports results and placing a wager on the outcome.

According to outgoing BCLB chairman Prof Paul Wambua Musili, there are close to 30 licensed bookmakers with sports betting licences in Kenya.

The greater percentage of these are operators who run betting shops as well as casinos, which also hold sports betting licences.

Another 10 operators run sports betting using the mobile platforms. The latter category includes SportPesa, Betin, Betway, Oxygen 8 (which operates Bet Yetu), Justbet and mCHEZA.

The regulatory framework for sports betting is found in the Betting, Lotteries and Gaming Act (Cap 131 Laws of Kenya), which establishes the Betting Control and Licensing Board (BCLB). BCLB is charged with licensing and regulating the gaming industry in Kenya.

Sports betting has grown in leaps and bounds in Kenya since 2013 when the first online sports betting company SportPesa was registered.

“Since registering SportPesa in 2013, we have licensed other operators to open up the sector,” said Musili. “We have been closely monitoring the sector with a view to weeding out rogue operators and to instil discipline in the industry.”

Statistics released by PriceWaterhouseCoopers (PwC) late last year indicate that the annual gross turnover of sports betting industry in Kenya is $20 million (Sh2.1 billion).

GROSS REVENUE

With more competition, the gross revenue is projected to grow to more than $50 million (Sh5.1 billion) in the next three years.

Musili attributes this growth to technology, which has made it possible for people to bet on any sports activity anywhere, anytime.

“Growth of sports betting has been aided by technology,” said Musili. “People can bet on matches through their mobile phones wherever they are, at any time.

“People have embraced technology and the operators have cashed in on this, but herein lies the problem for the regulator: BCLB has not acquired modern technology to regulate online betting.”

In her book, Nyairo warns that gambling can be addictive. She says betting draws one into the idea that they are being rewarded while in real sense they are being roped into the bondage of eternal betting.

Those who get match predictions right and win some money or hit the jackpot swear to continue betting, the scholar says.

Last month, Elimah Khanaitsa, a 27-year-old saleslady from Kakamega, became the first woman to win the SportPesa jackpot. Having earned Sh22 million, she vowed to continue betting.

“I didn’t believe I had won the jackpot,” Khanaitsa, who was flanked by her husband, told a battery of journalists. “To confirm I had won, I withdrew Sh2,000 and another Sh70,000.

“I’m targeting the next jackpot and I will continue betting.”

This was the second biggest jackpot. Two months earlier, SportPesa had given out another jackpot of Sh29 million.

(READ: Sh22m fortune for businesswoman)

Faustine Imbali Asenahabi also won the Sh10 million jackpot in the Betin Kenya betting game.

Asked for his opinion on betting, James Ayuo, a sales executive in Nairobi, told Daily Nation Sport: “Sports betting is the in-thing.

“People pay rent using their winnings. If you are a fan of a team that is playing, you just need to bet with your head and not your heart.
“I will keep betting for as long as I can.”

According to Musili, gambling is a demerit good which must be regulated.

GAMBLING HAS MANY INCENTIVES

“By its very nature, gambling has many incentives that attract deceitful, dishonest and disorderly conduct from operators,” said Musili. “Gambling is a demerit good and, as is the practice worldwide, demerit goods are subject to heavy taxation or direct control to reduce consumption because of their potential harm to the consumers and their families.

“Addictive substances are heavily regulated because addiction causes great harm to society. Those addicted to gambling can lose all of their money and end up homeless, as well as drive their families and friends to bankruptcy.”

The director of communications at SportPesa, Kester Shimonyo, said people should bet for fun but it should not be taken as a fulltime economic activity.

Despite the phenomenal growth, the sports industry is yet to fully benefit from sports betting.

Whereas SportPesa and Betway have sought to sponsor Kenyan Premier League clubs, the law does not provide for oversight on use of good cause money. As such, when SportPesa sponsored the KPL last season, the value of the sponsorship remained a top secret with the online betting company citing confidentiality.

Without oversight, clubs and initiatives meant to benefit from good cause money stand to get the short end of the stick after the cameras have stopped clicking.

Further, the government is yet to realise revenue from the 20 per cent withholding tax that The National Treasury imposed on winnings from betting two years ago.

The law requires the players, not operators, remit part of their winnings from betting. Poor implementation of this law has led to revenue leaks.

In 2012, the Ministry of Sports established a Sports Lottery Fund, through which money raised from the betting industry would benefit the development of local sports. However, this has also failed to take off.