Betting: Govts raising taxes and restricting licensing to arrest gambling addiction

Saturday April 6 2019

Betting

A man betting on European football games with a mobile phone at sports betting shop in Kampala, Uganda, on May 6, 2018. PHOTO | ISAAC KASAMANI | AFP 

NJIRAINI MUCHIRA
By NJIRAINI MUCHIRA
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DICTA ASIIMWE
By DICTA ASIIMWE
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East African governments have renewed efforts to bring the betting industry under strict control amid claims of tax evasion and fears of a growing gambling culture and addition among the youth, who are mostly unemployed.

Kenya and Uganda have moved to vet industry players with threats of revocation of licences to tame the proliferation of betting, gaming and gambling outlets.

Despite imposing a punitive tax regimes, restricting the importation of gaming devices and impounding and burning gambling machines, the sector has continued to record growth.

Uganda levies a 35 per cent tax on betting, while in Kenya, the same was reduced to 15 per cent after lobbying by sector players.

While both countries have resorted to drastic measures to contain a sector that has largely become a social and economic menace, Tanzania enacted a strong regulatory framework through the Gaming Act, 2003.

In the 2017/18 financial year, Tanzania collected $36 million from gaming and betting.

But religious leaders recently lobbied President John Magufuli to ban betting altogether to control addiction among the youth.

Suspension

Just this week, Kenya announced that licences for all betting agencies stand suspended as from July 1, and that their renewal will be subject to proof that the companies are tax compliant.

“The betting, licensing and control regime in our country must change. We are going to turn it inside out,” said Fred Matiang’i, Interior Cabinet Secretary.

He noted that 500,000 Kenyan youth have been blacklisted by various online lending companies after they borrowed money to bet and gamble in an industry that generated $1.9 billion in revenue for the government.

In Uganda, President Yoweri Museveni directed the Ministry of Finance to stop licensing sports betting, gaming and gambling companies due to the negative effects the industry is having on the youth.

“From now onwards, no new companies are going to be licensed. For those which are already registered, there is no renewal of licences when they expire,” the media quoted David Bahati, State Minister of Finance as saying.

But internal government processes have emerged as a significant lease of life for industry players who find themselves at the mercy of a government policy driven partly by moral considerations and suspicion that betting is not draining the youth that are its biggest clientele but also the economy as the mostly foreign-owned companies repatriate all the returns.

Increasing numbers

The renewed attack on the industry comes at a time when research shows the number of youth getting hooked on betting in growing at an alarming rate.

Kenya has emerged as a vibrant market for betting and gambling with over 50 local and foreign companies being licensed in the past four years alone.

A recent GeoPoll rapid survey carried out among youth between the ages of 17 and35 in Kenya, Uganda, Tanzania, Ghana, Nigeria and South Africa show that millennials in sub-Saharan Africa spend $50 monthly on betting through their mobile phones.

Kenya has the highest number of betting youth, at 76 per cent.

“The frequency of gambling is highest among Kenyans compared with other Africans. Whilst the rest bet mostly once a month, a majority of Kenyans bet once a week,” said the survey.

It added that sports betting is the preferred form of gambling with 79 per cent of Kenyan youths estimated to be placing bets on football matches particularly the English premier league.

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