The new stringent regulations on gambling adverts in Kenya, introduced on April 30, would probably have a devastating impact on the country’s sports sector, which until now, has seen strong financial support by gambling operators. Nairobi continues with the crackdown on gaming, as Interior Cabinet Secretary Fred Matiang warned on Monday he would be deporting the directors of betting companies.
The Kenyan betting industry is paying millions in taxes to the state and is currently the third largest one in Africa after South Africa and Nigeria, the Daily Nation writes, citing data from PricewaterhouseCoopers. According to PwC, the sector paid nearly KES2.9 billion (US$2.8 million) in taxes in 2015 and is expected to generate steady revenue for the state coffers, with projected growth in annual turnover of $50 million for 2020. Over the past 5 years, the gambling industry saw immense growth from only KES2 billion to over KES200 billion, the Interior Ministry said.
Moreover, betting companies have provided consistent funding for sports clubs and associations in the country, including leading football teams like Gor Mahia, AFC Leopards, Sofapaka and Mathare United. Sponsorship deals have also benefited Football Kenya Federation, Kenyan Premier League Limited, and Kenya Rugby Union, according to the Daily Nation. The betting sector in the country, which allocates serious funding to social causes and supports local sports events and tournaments, is likely to be hit by the new ban on gambling advertisements, the paper writes.
On May 1, the Betting Control and Licensing Board (BLCB) announced it has banned betting advertisements on television from 6 am to 10 pm. The crackdown on gambling and betting, which are considered harmful for the nation, included a blanket ban on gaming advertisement on social media. Celebrities’ endorsement of gambling operations was also prohibited completely. The new regulations are set to come into force by May 30 and are expected to hurt the booming gambling industry in the country.
Betting operators are required to pay a 15 percent tax on revenues, as well as a 30 percent corporate tax. In addition, firms sponsor the development of sports clubs, they organize various sports events and provide funding for various professional and semi-professional sports leagues and associations.
Directors of Unlicensed Betting Firms to Be Deported
The overwhelming majority of existing betting companies in Kenya are owned and operated by foreigners, Interior Cabinet Secretary Fred Matiangi said on Monday. Even though the firms are, indeed, generating huge profits, most of the money is shipped abroad and very little remains in circulation in Kenya, he noted while speaking at the Betting Control and Licensing Board stakeholders’ forum at the Kenya School of Government.
Currently, the gambling industry employs around 5,000 Kenyans and 100 foreigners but many of these foreign citizens do not have working permits or licenses for operating a betting business, according to Matiangi. He said that he had requested a review of all working permits by Principal Secretary State Department of Immigration, Border Control & Citizen services Gordon Kihalangwa. If any of the betting firms’ owners are found to be illegally working and offering gambling and betting services in the country they would be immediately deported, Matiangi explained.
Meanwhile, betting companies owe the Kenya Revenue Authority KES26 billion in unpaid taxes. Firms are taking advantage of the opportunities for appeals and of the slow court process in the country, Interior Cabinet Secretary Fred Matiangi said. While companies are refusing to pay, they are “corrupting the youth” as young people are gambling on credit, borrowing money from lending apps, he added. He revealed that 500,000 Kenyans have been blacklisted by the CRB.
