Online gambling firms will need Sh500m to open shop

Setting up an online betting business will cost an investor up to Sh500 million under a proposed gaming law that seeks to curb gambling and entry of more players.

Proprietors of companies will be required to pay Sh100 million in licensing fees if the Gaming Bill 2019 is enacted into law.

The Bill, which seeks to repeal the current gaming law, is currently before the National Assembly.

Online betting firms will also be required to deposit a Sh200 million refundable cash security with the regulator and provide proof of Sh200 million capital to sustain operations under the proposed law, which provides more clarity on the financial requirements for operating a gaming business in Kenya.

The current Betting, Lotteries and Gaming Act is silent on rates and gives the Betting Control and Licensing Board (BCLB) the leeway to set permit fees with approval from the relevant ministry, currently the Interior docket.

An investor in a non-online gaming business will, for instance, be required to pay Sh30 million each for licence and security, with the regulator given powers to prescribe minimum capital.

Those starting a casino will be required to pay Sh50 million each in permit fees and cash deposit as security to cater for any liabilities and show proof of Sh100 million capital.

“Each licensee shall provide proof of adequate gaming capital to set up the operation for which a licence has been applied,” the proposed law says.

“Security deposited … may be used by the board to defray a licensee's liability which may arise from the licensed activity.”

The Bill also seeks to impose tighter checks and controls on online betting that has become an instant hit largely among the youth who place stakes and receive winnings via mobile phones, helped by speed and convenience which comes with access to mobile money platforms such as M-Pesa.

Official data shows unemployed youth spend an average Sh5,000 on betting per month.

The gaming industry in Kenya has grown rapidly over the last five years to Sh200 Billion from Sh2 Billion, employing 5,000 people, official data shows.

The BCLB on Monday refused to renew operation permits for 19 betting firms, setting the stage for a fierce survival battles.

Online gaming activities will be monitored real-time through a system to be installed by the proposed National Gaming Authority, and will be accessible to telecommunications sector regulator, the Communications Authority of Kenya, to facilitate remote tracking of transactions.

To achieve this, online gaming firms will be required to provide a website platform as well as all visual and audio communication channels, including particulars and location of servers and operator’s system.