Gambling - Afrikan Heroes

Mobile Money Platforms Allowed To Engage In Gambling Transactions In Kenya

October 20, 2020

In a landmark move, Kenya’s National Assembly Sports, Culture and Tourism committee has overturned a provision in the Gaming Bill of 2019 which sought to block gamblers and betting companies from receiving cash or paying through mobile money platforms such as M-PESA, Airtel Money or T-Kash.

“The amendment seeks to discourage gambling and to deter a licensee from allowing illegal gaming,” the committee said in a report. “The amendment seeks to remove the use of credit cards to gamble or bet…and seeks to provide for other modes of payments which a player may use, that is mobile money transfer.”

Here Is What You Need To Know

The bill which seeks to repeal the Betting, Lotteries and Gaming Act of 1966 was introduced to police the betting industry which has seen massive growth over the last couple of years.
The biggest winners following this reversal are telcos and betting firms while the biggest losers are banks affected by the removal of the use of credit cards to bet.

*African online gambling market share. Source: European Gaming and Betting Association*

Gambling Kenya Gambling Kenya

Under Section 60 of the Bill, online gamblers are not to bet anything less than KES 100 on any competition. The initial limit used to be KES 50, a big business opportunity for betting companies.
This boost is mostly associated with the fact that the lawmakers raised the minimum amount of an online gambling bet to KES 100 ($0.92).
This proposal would sound familiar to the British as it mirrors a similar decision made by the UK’s Gambling Commission earlier this year.
According to GeoPoll, 88% of gamblers in Kenya have once used their phone to place bets. Out of the 88%, 55% are gambling on their phone once a week or more. The report also goes ahead to show that 83% bet on football the most.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

SportPesa lays off 453 after closing Kenyan operations

October 5, 2019

SportPesa has announced that it has made its 453 Kenyan employees redundant after closing its operations in the country, as it urged the country’s authorities to repeal the 20% excise tax rate on all stakes that caused it to withdraw from the market.

The operator had been in the midst of a long dispute with Kenyan operators, centred on a different tax, since July, but this appeared to be approaching an end after what a SportPesa spokesperson described as “positive discussions with the Kenyan Revenue Authority” in late August.

However, On 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake which the treasury proposed in June.

On 25 September, MPs voted the budget through, including the 20% tax. SportPesa said in a statement that it would not operate in the country until the rate is changed.

The company confirmed to iGaming Business today (4 October) that the closure of its business meant that all of its employees in Kenya would be laid off.

“We regretfully closed our operations in Kenya as a result of a long-running hostile regulatory and taxation environment in the country,” a SportPesa spokesperson said. “This included a recent decision by the Kenyan legislature to impose a 20% excise tax on all betting stakes, which is based on a fundamental misunderstanding by the Kenyan treasury of how revenue generation works in the bookmaker industry. Such taxes render the betting sector in Kenya commercially unviable.

“As a result, we have been forced to make 453 employees in our Kenyan operations redundant, which was an extremely difficult decision for the company to take.

The spokesperson said that, through layoffs, the new tax will end up resulting in a significant loss of tax revenues for the Kenyan government.

“This means that in addition to the billions of Ksh in lost government revenues that will result from the closure of betting companies’ operations, the livelihoods of taxpayers across the country are also now directly impacted, as are the many individuals that they themselves may privately employ, such as domestic staff,” the spokesperson said.

“The economic and social impact of the government action therefore continues to be felt by Kenyan business and Kenyans themselves, with many individuals now without employment and the important social investment in grassroots sports delivered by betting companies now under threat.

“We urge the Kenyan government to reconsider its current agenda.”

In August, Kenyan president Uhuru Kenyatta called upon the country’s lawmakers to pass a total ban on gambling in the country,

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world