Big industry players fight over billions in gambling

A vicious battle between big industry players and smaller ones based in the counties for control of  the betting, gaming and gambling sector has been going on even as government seeks to raise taxes of their earnings.

The big companies’ business model is carried in online and mobile platforms while the small players have slot machines, mostly imported from China and targeting low-income earners.

On September 19 last year, the Betting Control and Licensing Board,  the market regulator, wrote to all County Commissioners and  directed them to  mount “a major crackdown, confiscate gaming machines  and arraign the operators in a court of law”.

The owners, fearing that they may be pushed out of business, and indicated they had licences from county governments, quickly moved to court challenging the legality of the regulator’s letter.

They were issued with temporary orders by Justice  John Mativo. The judge directed the government, its officials and agents not to conduct any crackdown on business premises where the slot machines are situated. He also directed them not to suspend the business or close them until the hearing and determination of the suit. The suit is ongoing at the High Court.

GAMBLING MACHINES

The view of the bigger players appears to have been indicated two weeks ago when Mr Ronald Karauri, the chief executive of SportsPesa, arguably the biggest company today in the industry, waded into the debate by lauding President Uhuru Kenyatta for identifying the gambling machines as illegal.

“We fully support President Uhuru Kenyatta’s concerns last Monday over the rising problem of underage gambling associated with illegal gambling machines,” he said in press statement.

He went on to say they have previously raised the same concerns with the regulator and county governments  “constantly requesting them to curb this menace which has tarnished the industry’s image and stands to ruin the lives of our children.”

He seemed to have been reacting to the President’s comments, during the launch of the Jubilee administration portal, on the proposed 50 per cent tax announced in the budget and the industry in general.  

 “We were very concerned about the rise in betting especially among the school going children.

POSITIVE IMPACT

This technology has been had a positive impact but it also had its downside. We felt as responsible government we needed to ensure we needed to make it more difficult for people to bet and those who wanted to bet that that money will go to causes that are social in nature and beneficial,: the president had said.

The president promised to ask Treasury to liaise with parliament to engage the industry players on the taxes but insisted they will not come too low.

Mr Sam Kahia, chairman of the slot machines umbrella body, Kenya Counties Amusement  and Gaming Society, said there is need to regulate the industry just like in Tanzania, Zambia and Malawi.

RESPONSIBLE GAMBLING

“We commit to promote responsible gambling with interest of Kenyans coming first. Remember, Kenyans invest and are protected by the Constitution. We went to BCLB offices for licence but they declined so we went to county offices and obtained licences only for the board to come later and term the operation illegal,” he said.

He also claimed the machine operators employ may Kenyans and does not allow underage clients.

Board Chairman Kimani Kung’u  said the authority has been following the law.

“Unscrupulous business people operate gaming premises with Chinese machines whose integrity cannot be verified and most have no importation documents nor evidence of payment of necessary taxes. It is mandatory that imported gaming equipment has to be authorised by Betting Control and Licensing Board,” he said.