Suspending bookmakers’ licenses a bad decision for Kenya’s investment prospects in emerging sectors

The decision by the government to cancel licenses of at least 27 betting companies, including Sportpesa, is one whose impact will be felt and might end up leaving thousands of families affected negatively.

Whatever informs the onslaught against bookmakers by Cabinet secretary Fred Matiangi calls for serious national discourse if the intended good is to be appreciated by, not just the rank and file in government, but also the Kenyan population at large.

The risk in how this is being handled is that CS Matiangi is coming out as a man whose high-handedness will be premise the end of people’s business, shattering of livelihoods and killing Kenya’s attractiveness for foreign direct investment; which is crucial to the country’s economic ambitions.

This assertion is premised on the understanding that one of the reasons behind declining to renew licenses is that they are foreign-owned, a case in point being Dafabet – a single director firm registered as Asian Betting and Gaming Enterprises Africa Limited.

But let us look at the impact of closure of these firms. The obvious one is that thousands of jobs will be lost and millions of livelihoods affected as the companies fold up.

While they cite tax evasion as the basis for cracking down on the sector, there would be a massive dip in collections by KRA in the short, maybe even longer term but what may never be recovered is the massive revenue generated for media houses through advertising as well as sports teams who have gained stability through partnerships with the bookmakers.

This point of media income is compelling on media houses to call out the mischief in CS Matiangi’s mission, which he largely premises on morality because of the element of addiction. If such would apply then we should have all brewers’ licenses withdrawn because of how alcohol causes devastation to families because of addiction to the bottle.

Kenyan football giants Gor Mahia and rivals AFC Leopards are sponsored by Sportpesa to a tune of KSh135million for both of them, while other teams like Sofapaka are on the books of Betika. Harambee Stars have a betting partner in Betin while boxers Fatuma Zarika and Rayton Okwiri are backed by leading bookmaker – Sportpesa. PHOTO/COURTESY

Government has over the years not really cared about sport in this country and formations like Gor Mahia and ilk only can tell how sponsorship from Sportpesa has helped them stabilize their outfits. And there are many more like K’Ogallo who will suffer untold hurt moving forward.

Matiangi and his backers may not want to hear this but truth is that while those many youth are listed by CRB, they have been making their livelihood and even manage to repay those loans from those bets they place. Truth is, as bitter as it may sound, hundreds of thousands of jobless youth and more; male and female, are supporting their families from the little winnings they manage.

They will tell you how losing is part of the game but majority are willing to try their luck as many times as they would just to break that duck.

One needs to see the impact of initiatives the recent visit to Kenya by English Premier League side, Everton, on Kenya’s national psych and the ripple effect of such to the different sectors of the economy to appreciate that the country needs is not an iron fist but a participatory, sober discussion to have a way to address the emerging issues.

Kenyans recently filled Kasarani Stadium to watch English Premier side Everton FC against Kariobangi Sharks, a tour fully-funded by Sportpesa. PHOTO/SPN

For the isolated cases of extreme destructive addiction, the good CS should have sought to benchmark (which Kenya is good at) how other jurisdictions have done it. The best model would have been the United Kingdom and the European Union, who struggled with the gambling problem for many years but have now dealt with the problem although you can never achieve 100% elimination of the problem.

Instead of this approach, he should have proposed in the new law, for the creation of a body similar to the UK Gambling Commission that regulates the sector and create stricter mechanisms to protect the vulnerable under a ‘Know Your Customer’ system which makes it obligatory on the part of the bookmaker not to take bets from someone flagged as vulnerable for various reasons, including one’s credit score at the CRB.

As a remedy to those extreme addiction, a common fund for rehabilitation of identified addicts where all the players contribute a percentage of their revenues would help resolve that challenge.

On the question of tax evasion, how about come up with an incentive-driven regime where involvement in events that have impact on the society qualify those firms for tax rebates. This way government would recoup the tax money from the cross-cutting effect on other sector players that get involved or have a direct co-relation with whatever activities they undertake.

It is difficult to understand where the CS is getting the guts to take this route of bulldozing things when genuine stakeholder engagement, guided by proper bench-marking, public participation and greater national interest would have worked.

Two firms, Sportpesa and Betin, already have orders from court gagging BCLB and the list could grow; a fact that could set up the good CS against majority of the Kenyan youth and ultimately hurt his otherwise scaling public service career.

But we are only the fourth estate, ours is just an opinion which is not binding on the state but it could be the most sensible thing.

Sobriety must be applied here.


Share Article

Leave a Reply

Your email address will not be published.

By Same Author