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Agency to increase betting stakes in wake of addiction

Sunday April 8 2018

GAMBLING

Youth and children gamble using a slot machine at Chuowe Beach, Homa Bay County, on February 21, 2018. PHOTO | TONNY OMONDI | NATION MEDIA GROUP 

NATION REPORTER
By NATION REPORTER
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1. The multibillion betting, lotteries and gaming industry is regulated by the Betting Control and Licensing Board (BCLB) under the Betting, Lotteries and Gaming Act. However, the law has been playing catch up with technology as it was enacted before the era of mobile phones and the Internet. How do you plan to address this glaring loophole?  

Amos Washisino, Nairobi

We already have a draft Gaming Bill, regulations and technical standards.

These tools have not only addressed the current gaming operating environment but are also anticipatory in view of the new and emerging dynamic changes and developments in the gaming industry.

The bill should be ready for enactment into law by parliament and subsequent enforcement within this financial year.

2. In the past few years we have seen the mushrooming of betting companies where the minimum stake is as low as Sh50 or even Sh10. Why can’t BCLB direct the people behind these ventures to increase it to a higher amount to discourage the youth from betting because they seem to think betting is a shortcut to riches?

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Eng Ongeri A Dominic, Nairobi

The new regulations have actually addressed the aspect of not only the minimum but also the maximum stakes.

The Board has a role in promoting responsible gaming, and given the nature of gaming, it should not be easily affordable by all and sundry.

We do not want people to over spend in betting/gaming.

Hence the minimum and the maximum stakes will be high enough to discourage not just the youth but also those who can’t afford it.

3. Much has been said about the perceived impact of betting across the Kenyan demographic. A lot of this is mostly emotionally inclined or biased opinions. Sir, has your Board seen it fit to conduct a scientific research in order to demystify the real facts? If not, what are the challenges? 

Komen Moris, Eldoret

The impact of gaming in Kenya is less than 0.5 per cent of the national population.

Some distinctions regarding the betting and gaming industry are important to make here.

Casinos and betting have a higher propensity to attract problem/pathological gamblers while bookmaking (particularly sports betting) is the most open to participation of the youth and other vulnerable groups such as poor women and children.

Lotteries have a different demographic, that is mature (nearly zero under 18 players) and tends to attract more rural than urban communities, and more towards female than male.

In addition, the average Kenyan lottery player spends just about Sh357 a month.

4. Is Startimes Jyds Communications Agencies registered with your board and have they complied with all your requirements?  I am asking because I have in the past met a man or woman outside the Odeon building on Tom Mboya Street who operate from a white van with a horde of young men and women claiming they are a gaming company. 

Githuku Mungai

We wish to point out that the company in question is not one of our licensees and what they are doing is not known to us.

We will carry out investigations in this regard and we also welcome more information on this matter.

In the event that the company is involved in any gaming activity all the operators will be brought to book and the activity stopped forthwith.

5. How many gaming and betting firms are currently registered with BCLB and what is the Gross Gambling Revenue today?

Julius Obat, Eldoret

We have 32 bookmakers and 36 casinos. The gross gaming revenue for the 2016/2017 was Sh20 billion.

6. In recent times, betting, lotteries and gaming firms have been complaining of the high taxes the government is charging them after Parliament passed the Finance Act. What I would like to know is whether the National Treasury consulted your board before imposing the high taxes, which are not only hurting the firms but also sports in the country most of which no longer have sponsors after some of the firms pulled out? What was the rationale for imposing the high taxes?

Eunice Moraa, Nyamira

The government works collectively in terms of any decisions regarding a particular sector.

All the key stakeholders are engaged, and the same happens in gaming.

The proposals made are never cast on stone and are therefore open to review periodically should they fail to achieve the intended objective.

7. MPs who are members of the Sports, Culture and Tourism Committee recently called for an overhaul of your board on grounds that you have failed to control betting. Could the problem be in the law or insufficient resources to carry out your mandate as is required?

James Mwangi, Nairobi.

The board and its secretariat are effective and equal to the task of regulating the gaming industry in Kenya.

As you may recall, in recent times, the board has fought hard to execute its statutory mandate of regulating gaming, gambling and lotteries, and moved to safeguard the youth and the vulnerable from illegal betting and gambling operations.

The board has been buoyed in particular by landmark rulings made by judges of the High Court in Kisumu, Kitale and Nyeri, which backed the board’s crackdown on illegal gambling dens.

The challenge the board faces in this regard was the numerous court orders obtained by the operators of illegal machines, otherwise we would have eradicated the menace, and that was clearly pointed out during the committee meeting.

8. There was a proposal some time back to have betting, lotteries and gaming companies by law set aside at least 25 per cent of their earnings for good causes such as charity and other sponsorships. The National Distribution Trust Fund (NDTF) was to be established to collect the good cause monies from the betting firms? How far did this proposal go? Considering that these firms when they sponsor say sports in the country they make it look like they are doing a favour to Kenyans, isn’t it time BCLB pushed for such a law to ensure these firms do not use the little sponsorship they do to market themselves?

Kilonzo Mutua, Kathonzweni

That provision is there and has not changed, that is, section 36 of the Betting Lotteries and Gaming Act Cap 131 Laws of Kenya, and under the same Act in section 37 the board has powers to guide and coordinate equitable distribution of the charitable proceeds from public lottery operations and we execute that religiously. 

Regarding sponsorship of sports by bookmakers, there is no legal requirement.

They are simply supposed to pay taxes, which we ensure they do.

Sponsorship is part of their CSR just like any other company would do, and its welcome since the ultimate goal of any business is to make a difference in peoples’ lives within the environment they operate, irrespective of their core business.

Obviously a guiding policy framework to give normative and philosophical anchorage to the principle of good causes would be very helpful, so that developing sports facilities and child friendly social amenities become imperatives rather than choices.

This would go a long way in cementing the betting and gaming industry as a key player in the promotion of public well-being and Gross National Happiness.

9. Given the financial power and influence betting and gaming firms wield over our political and economic spheres, how easy is it for your board to regulate them?

Pius Nyale, Lamu

The Board’s powers and regulatory mandate supersedes those of any licensee despite their financial muscle or political connections, if any.

The board is independent enough and regulates its own proceedings within the law.

10. Media reports regarding the industry have revealed that majority of the real owners, those unseen hands of the betting firms in the country are foreigners, majority from the former Soviet blocs such as Bulgaria. There are also Greeks. These unseen hands front locals to take charge while they call the shots and pocket the profits from the background. My question is, what makes Kenya an attractive place for these foreigners to set up betting firms? Does BCLB conduct any background checks to know the real owners before registering the firms?

Peter Kirui, Nakuru

The board has a robust and comprehensive licensing process and anyone who wishes to obtain a licence undergoes due diligence and background checks to establish and determine if they are fit and proper to hold any licence.

The background checks are also used to gauge and ensure that applicants not only possess the requisite skill, knowledge and competence but also the financial capability to undertake gaming operations.

We also work very closely with our counterparts from other gaming jurisdictions as well as other law enforcement agencies.

In terms of why Kenya is a preferred investment destination, there are many factors you could attribute to that, among them the extent of mobile phones uptake and in the case of gaming that is extremely important.

The gaming industry in Kenya is also fairly mature within the African region hence an ideal choice and destination for investment in gaming.

11. There is a proliferation of slot machines in residential areas in many estates of Nairobi and they are being operated in barber shops. While the idea of getting additional income from them is not bad, the problem is that the operators of these machines admit even schoolgoing children to play since one only needs to have Sh10. First, is the licensing of these slot machines under your board’s mandate? If so, what is the board doing to protect our children from being introduced to this addictive game so early in their lives?

Joseph Muya, Embakasi

We wish to categorically point out that the machines in question are not licensed by this board and they are illegal.

We however have a role in eradicating illegal gambling where they fall and we are and will constantly do that and would have actually eradicated them if not for the court orders that restrained us.

We are however happy with new developments in many courts nationally, that have affirmed and validated our corrective actions in this regard.

12. One of your mandates is to create awareness among the public yet I have never seen any road show, billboard or television advertisement to educate the public on the benefits and dangers of engaging in betting. Instead, it is the betting and lottery firms that advertise. What could be the reason for BCLB not to create public awareness?

Pamela Kaberia, Meru

That is a very good question and we appreciate your concern, Pamela.

We have a role in creating awareness and our officers have been to many counties doing exactly that.

Personally as the chairman of this board, I have been on several radio stations talking to Kenyans about it.

This is also in line with promoting responsible gaming and we will continue to do so.

Indeed we are updating our website and among the updates will be matters of responsible gaming.

We are also developing an outreach programme that we intend to rollout shortly and through which we are targeting universities, colleges and schools to ensure that the youth get the right message regarding gaming.

13. Do gambling laws provide for the maximum an individual can spend a day in betting or is it left to a person’s discretion? If Kenya does not have such a provision, aren’t calls for responsible betting all hot air?

Lawrence Owino, Mtito Andei

Currently there is no provision for that in the law, but we have made proposals that would see players limited on how much one can play in a day, especially in relation to curbing the phenomenon of money laundering and promoting responsible gaming.

The terms and conditions of operators also limit the amount one can actually win in any game, effectively determining how much you may spend.

14. The debate that has always clouded the Kenyan betting and gaming industry is whether to tax the winnings or the gaming firms. Where does BCLB stand on this matter?

Tom Nyamu, Thika.

Gaming is a leisure and an entertainment activity.

It is not an economic activity on the part of the player and it can be addictive.

My personal take, since it is also the practice in many gaming jurisdictions, is that there should be no harm in making the player feel the pinch of gambling.

Imposing a levy on winnings would therefore come in handy.

The operators on the other hand pay and must continue to pay taxes on gross gaming revenue.

15. How does BCLB ensure that terrorists and money launderers do not use the available platforms of betting, lotteries and gaming to clean and move their ill-gotten wealth?

Beatrice Mutinda, Mombasa.

All platforms are monitored for compliance and key among them is to rid the industry of money laundering.

All deposits must be reported to this board on a weekly basis as well as any suspicious transactions. Deposits must be utilised before they can be withdrawn.

16. The revised Betting, Lotteries and Gaming Act (2016) sets the highest penalties payable by a person who violates the licensing requirements of betting at a maximum of Sh10,000 and a year in prison or both, which I find very lenient considering the many lives these people destroy through addiction and sometimes suicides among teenagers. Would BCLB consider drafting amendments to make the penalties stiffer and deter those that violate the licensing requirements?

Peggy Wandia, Nairobi

We have since made a proposal to review the penalties.

The proposed fine is now Sh10 million and five years in jail or both.

There is need to remember though, as Martin Luther King Jnr said, that behaviour can be regulated, but morality cannot be legislated.

17. The licence fee charged by the board is huge running up to tens of millions per firm. With the exponential growth of the betting and gaming industry in the country over the last few years, one would expect that the board generates a lot of revenue. The question however is, where do you spend the money you generate since there is very little advertisement that you do?

Martin Muya, Machakos

We are a wholly government controlled regulatory outfit and the statute establishing the board affords us a clear and definitive mandate with limited scope for manoeuvre. As such, all the fees we collect go direct to the Exchequer while the taxes are paid directly, as by law, to the Kenya Revenue Authority.  

18. What safeguards does BCLB have in place to protect subscribers in case a betting firm suddenly closes shop?

Murithi Mwangi, Nairobi  

One of the key licensing conditions is ability to sustain operations a licensee intends to undertake.

There must be demonstrable and verifiable evidence of funds and funding in addition to submitting guarantees and opening fixed deposit accounts that are topped-up on a weekly basis and confirmed just to ensure that player deposits and winnings are protected and guaranteed.

We have an obligation to the public and we jealously uphold it.