A lie goes halfway around the world before the truth has a chance to put its pants on, so it is said. This aptly sums up the ongoing debate on the country’s gaming industry. This was clear when Kipipiri Member of Parliament (MP) Samuel Gichingi was quoted in the dailies as saying he had no idea gaming companies pay tax and only recently learnt that they do when some stakeholders provided evidence.
Sadly, he is not alone. There have been many outright lies told, half-truths disseminated and misinformed media reports published, such that the industry has been left stigmatised. However, the saddest thing is that an MP purporting to have researched widely enough on the industry before crafting a Bill with far-reaching implications is the biggest conveyor of this misinformation.
It was laughable if not painful to watch Gem MP Jakoyo Midiwo blatantly mislead his colleagues and the public during the debate on the Betting, Lotteries and Gaming (Amendment) Bill, 2016. As he courageously stood up to present his “facts”, I noticed how skewed his presentation was to create a picture of a major crisis. Here are some of the fallacies.
1. “The draft Bill by Interior Cabinet Secretary Joseph Nkaissery was produced in 24 hours."
According to Mr Nkaissery, the government submitted a memorandum to Parliament regarding the Bill on December 23, 2016, including a footnote that the State through the Betting Control and Licensing Board was working on its own draft which it has invested a lot of time, money and human resource on, to ensure a balanced law.”
2. “Betting companies are 'pilferaging' from the government because they do not pay tax.”
Here, the good MP seems to be privy to some information that the police or State agencies may not have. In the cases where he has seen this so-called theft, it is only fair that he submits this information to the authorities.
3. “Even a five-year-old child can gamble on phone.”
Surely, this is more of a parenting issue than an industry fault. It is the same way that TV programming is segmented according to availability of different audiences where the more graphic and violent content is aired late nights while family-themed content during the watershed period. It is up to parents to enforce such rules because a child cannot buy a mobile phone and register a number without a national ID.
4. “Three girls from Nakuru county were enticed to gamble school fees on way to school since one of them had a phone. They could not go back home after losing all the money out of fear of their parents and ended up cohabiting and being married by a flower seller.”
As per police and documented reports from neighbours, the school and eyewitnesses, in this particular case these girls had the intention of running away from school. According to Bondeni police in Nakuru, they then went to the florist’s house for a good time until neighbours noticed something was amiss and called the school – St Marks Eldonio High — as well as the police.
5. “These people (gaming companies) are making more than one billion shillings per day. I can tell you because I have the facts, these companies are making more money than the Kenya Revenue Authority.”
Even before I get into simple mathematics, it is very unlikely that any company makes more money than the government. But since Mr Midiwo insists he has the facts, a little data-based calculation would be important. In the financial year 2015/2016 which ended in June last year, the KRA reported a revenue total of Sh1.2 trillion. Dividing that by 365 days in a year translates to Sh3.29 billion per day. Even so, it is not true that betting companies make more than Sh1 billion per day. That is a ridiculous figure.
6. “The platform used to bet is a foreign platform.”
Betting companies use local money transfer services to effect transactions with their clients. These services such as Safaricom’s M-Pesa are locally hosted and create many jobs in the economy.
7. “Russia abolished gambling and betting in 1999.”
Gambling in Russia has not been abolished and the four key regions with gambling activity are Kaliningrad, Azov-city (Krasnodar territory), Siberian Coin (Altay) and Primorie region. Last year, the Russia government even handed a new private investor a sports betting licence as it sought to have online firms set shop locally to harness taxes from such activity.
8. “In USA people only gamble in casinos, there is no online gambling.”
Mr Midiwo, who at some point in his life lived in the USA, should know better than to misrepresent issues in this age when information is only a click away. Surely, USA – home of one of the largest gambling cities Las Vegas – has not outlawed online gambling. It is only that most of the online gaming sites that gamers in USA use are hosted offshore.
9. “In London you can only bet within a certain radius … if you leave the set radius your phone automatically switches off the gaming app.”
This cannot be further from the truth. Most of the online betting sites used in the USA and even Kenya are UK sites such as Ladbrokes, Bet36 and Betfair which can be easily accessed across the globe including here in Kenya, even though these firms have no physical presence in the country.
10. “Nobody knows who is licensing the betting companies.”
The Betting Control and Licensing Board still exists and is the government body in charge of licensing gaming companies in Kenya. Any entity under this industry that does not have this licence is therefore illegal.
11. “Kenyans are dying … gambling their lives away. Kenyans are losing their lives even at this time of hunger.”
There is drought but surely the MP cannot blame gaming companies for this unfortunate disaster. In addition, Mr Midiwo claimed a man in Eldoret committed suicide after losing Sh40,000 in a bet. However, police reports say the contrary. In a letter to one of the mainstream media houses that picked a sensational story from blogs and published without verification, the Directorate of Criminal Investigations said there was no reported death of a Kennedy Kosgei in any of the 14 counties of the Rift Valley during the dates mentioned in the story. In other words, the story was made up. Mr Midiwo, too, picked on this and added to the rumour mill by citing the fake report.
12. “There is a lot of tax evasion and money laundering.”
Again here, the MP is talking like someone with concrete information, given the number of times he has repeated the claim as he pleads with his colleagues to pass the Betting Bill. But why not pass this crucial information over to the police and other authorities to investigate?
13. “There are 50,000 slot machines and income from this is not declared.”
If the exact number of the illegal gaming machines is known, perhaps also the importers of these machines and where exactly they are situated is information the authorities possess. Why, then, have these machines not been confiscated to safeguard children who may be using them in illegal dens?
14. “SportPesa gave Hull City Sh3 billion and Gor Mahia only uniforms.”
It is in the public domain that the average annual sponsorship cost for the three-year Hull City deal is Sh300 million, half the cost of theSh607 million sponsorship deal the company signed with Kenya Rugby Union. But since he mentioned Gor Mahia, the MP only needs to ask any of the team members who funds their payroll. He claimed in Parliament that he is the “biggest fan” of Gor Mahia. Why, then, would he mislead people about the sponsorship deal? Of course, to turn the public against the company and champion his cause!
15. “It is our responsibility to put a law especially where a billion shillings is being collected in a day.”
Is the law about regulating the industry by protecting vulnerable groups and locking out illegal entities or is it about punishing legal businesses for their success?
16. “Safaricom is a good company and good employer but that is all there is. It is causing loss of jobs and should be split into three companies, locally owned, that the KRA can control.”
First of all, why should KRA operate outside its mandate of tax collection and venture into controlling companies?
Second, the MP went on to further claim that these should be done after streamlining the betting industry since Safaricom is “foreign-owned” with Vodafone owning “70 per cent!” never mind that it is in the public domain that Vodafone only owns 40 per cent of Safaricom but in Mr Midiwo’s world, facts are often overlooked. And if, indeed, Safaricom is a good employer by his own admission, why then does he have a problem with a company employing hundreds of thousands of Kenyans? What is this obsession with punishing success?
These are just a few of the twisted facts I picked up from the debate, who knows what else has been put out there by forces hell-bent on bringing down the industry? To make matters worse, the mover of the Bill is yet to substantiate any of these claims.
Mr Midiwo needs to read the Geopoll survey released last week that shows only five per cent of cash earned by young people is spent on gambling. The majority – 55 per cent — is spent on personal care, 26 per cent on investments while six per cent goes to entertainment.
Dear Midiwo, facts are stubborn.
Alloyce Omondi is acting chief executive, Association of Gaming Operators – Kenya.