The Kenya Nation reported last week that 27 betting and gaming companies “are living on borrowed time” after their licenses were deferred or cancelled following findings by the multi-agency Betting Control and Licensing Board.
The licenses were to have been renewed by July 1. The board announced earlier this month that it would not renew the licenses of 19 companies and had deferred the renewal of permits for eight others, 13 casinos and six lotteries.
Betin, one of the leading companies on the list, has gone to court seeking to reverse the decision. Other firms whose licenses have not been renewed or who have been told they must meet certain conditions in order to resume operations are SportPesa, Betway, Betpawa, Premierbet, Lucky 2 U, 1X Bet, Mozzartbet, Dafa bet, World Sport Bet, Atari Gaming, Palmsbet and Betboss. Also on the list are Betyetu, Elitebet, Bungabet, Cysabet, Nestbet, Easybet, Kick Off, Millionaire Sports Bet, Kenya Sports Bet and Eastleighbet.
SportPesa, Betin and Betway control at least 85 percent of the market.
The Nation also reported that the government is “mulling deporting the bosses of betting firms whose licenses were not renewed.”
“The exercise is highly sensitive and divulging any information may result in the whole exercise crumbling,” a source told the publication. “For now, all I can tell you is that the presidency has given us the green light to deal with the industry of gambling that is now turning into rogue outfits.”
Interior Cabinet Secretary Fred Matiang’i pointed out that “no law that compels a government to issue a license to any investor. Our decision is going to shake the sector for sure, but we have reached a point where we have to save our country.”
The BCLB was perturbed to learn that the companies made a collective Sh204 billion (US$1.98 billion) last year but paid only Sh4 billion in taxes. It also determined that up to 500,000 of the young people blacklisted by credit reference bureaus took mobile money loans to bet.
Most of the companies also failed to pay the 20 percent withholding tax on payouts, and much of the revenue made was wired to accounts abroad due to the ownership structure of the industry, which is 90 percent-owned by foreigners or companies registered in tax havens.
A 2017-2021 report by PricewaterhouseCoopers estimates that the yearly turnover of sports betting in Kenya will reach Sh500 billion by 2020. And a 2018 survey by Geopol revealed that 40 percent of low-income gambling consumers are unemployed, while 29 percent are students.
“Once you try and win, or if you know of someone who has won, you get a psychological impetus that if you try even after losing so much money, there is a chance that you will still win,” said Dr. Philomena Ndambuki, a psychologist and director of mentorship at Kenyatta University.
