The formal recognition of the gaming industry in Kenya is nearly as old as our Republic having been formalized in 1966 with the enactment of the Betting, Lotteries and Gaming Act (cap 131) that established the Betting Control and Licencing Board [BCLB].
For the most part, the growth of the sector was static if not moribund up until the year 2010 when it suddenly surged.
It is estimated that within a span of five years the annual turnover of the gaming industry increased from a mere KSh2 Billion to about KSh200B. This represents a 10,000% growth rate which defies conventional economic logic.
Whilst technological advancements account for a portion of this growth – especially the online tools that make gaming easily accessible – empirical evidence reveals that predatory gaming would explain much of this growth.
In most jurisdictions such as Canada, USA, and most of Western Europe, people engage in betting and gaming activities as a form of leisure and entertainment that is often associated with local tourism.
To the contrary, in Kenya and most of sub-Saharan Africa, gaming has been undertaken as an economic activity. It is marketed and promoted as a ticket out of poverty.
This mirrors a “get-rich-quick” attitude towards personal development that has long underpinned the culture of corruption in this country.
Consequently, to a majority of unsuspecting youth, it is the sure way of succeeding in life.
All over the world, no society has developed through gaming, naked greed and an entrenched “get-rich-quick” culture.
Therefore, the current misrepresentation propagated by the industry, using celebrities and influential social figures in adverts and social media, to convey the “economic logic” is outstandingly bad and shocking.
Many will join me in calling out this practice as an affront to our national values and a threat to our social fabric that underscores the essence of hard work, honesty and social responsibility.
The ubiquity and craze of gaming in Kenya has caused dire social and economic strain at the behest of a few elite, majority of whom are non-Kenyans and live outside the country.
Current Status of gaming industry in Kenya
Whereas the gaming industry employs about 5,000 Kenyans and about 100 foreigners, almost 90% of the licensed industry players are foreigners. Unsurprisingly, almost 100% of the revenue raised by the gaming and betting firms owned by foreigners is repatriated to their home countries.
The Central Bank of Kenya has associated this capital flight to some distortions currently witnessed in the financial sector.
Uncontrolled gambling has reorganized the financial lives of poor Kenyans in very drastic ways. It preys on the poor in that their little daily earnings are chanced away through gaming.
This money is directly pocketed by firms owned by non-Kenyans, a huge chunk of which is transferred to foreign capitals, and very little is left in circulation here in Kenya.
Emerging social harm
As currently noted, gaming is acute among our youth. We have numerous reports of increased personal financial delinquency and family break-ups arising out of gaming and betting and generally social defiance.
Cases of suicide have been reported as well.
Apart from the loss of a work ethic and increased idleness, recent empirical evidence reveals an upsurge of organized crime connected with illegal concealment of proceeds of betting; and the reverse linkage of using betting as a method of laundering money.
The shocking evidence from a recent analysis on the negative effects of the industry depicts a sector that has run amok.
Bankruptcy associated with gambling debts is staggering.
Currently, over 500,000 Kenyans have been blacklisted by the Credit Reference Bureaux over defaults in repaying money borrowed for gambling.
The evidence further shows that a majority of the gamblers are jobless most of whom are under the age of 35.
Starkly, the analysis reveals that the average income of most gamblers ranges between KSh5,000 – 10,000 per month.
Beyond the social harm, in the recent past the industry has not lived up to expectations.
Evidence from the Kenya Revenue Authority shows that the sector owes and estimated KSh26B.
Poignantly, attempts to recover this amount have not been fruitful because the key industry operators have found refuge in judicial processes, where all manner of court orders are sought and issued thereby frustrating the collection of taxes.
Government position going forward
The social ills that we are witnessing have reached a tipping point that calls for interventionist public policy responses by both the government and the industry.
Specifically, our role as government will be the establishment of a proactive regulatory framework for the industry so as to create a socially responsible gambling culture.
Going forward the following actions will be undertaken:
- Stricter enforcement of the regulatory framework
- Amendment of the current law to align it with global best practices
- Media engagement to create awareness on the ills of gambling
- Upholding of high set standards by industry actors
- Close monitoring on the movement of money within the industry, in and out of the country
- Ensuring payment of taxes by the industry operators
- Ensuring compliance with set Corporate Social Responsibility undertakings.
With respect to renewal of operating licenses for the year 2019/2020, (and thereafter) the following will be undertaken:
- Renewal of operating licenses will no longer be automatic or guaranteed
- All applicants for licenses (fresh or renewal) will undergo security vetting
- Renewal of licences will be pegged on due payment of taxes backed with all supporting evidence.
Accountability and social responsibility
It is the position of government to support the growth of the private sector as the engine of economic growth, but only in a manner that is honest, accountable and socially responsive.
Going forward, we will introduce a regulatory framework predicated on minimizing harm. Our support and action in the sector will be purely driven by the Government’s “Duty of Care”, responsibility and dedication to public interest.
