Lessons from the betting world for the stock market

Though sport betting gets a bad rap, this hasn’t stopped it from growing. Football betting is now the most popular form of gambling in the country. It’s the new industry on steroids. In 2014, it was estimated to generate Sh1.8 billion annually with a projected growth that will see it top Sh7.5 billion this year, according to PwC.
If that pans out, it will be a whopping 300 per cent-plus growth or almost twice what brokers collect in a good year. The signs were all over. Recall the 2017 Geopoll survey findings? 76 per cent of the Kenyan youth (age 17 to 35) gamble and spend Sh5,000 a month on the habit, 79 per cent of these bets are placed on football matches and 75 per cent of bettors do so using their mobile phones. Truly mind-boggling.
Today, one industry – capital markets – is struggling with growth. Though much older and more established, few (especially the youth) are giving it attention these days. Looking at the betting world’s phenomenal rise, perhaps it can pick a few lessons. Here are a couple.
One is the use of in-your face marketing strategy. Betting companies rely heavily on marketing. It’s ads on TV, commercials on radio, billboards on highways and byways, sponsorship of sporting leagues and so on. Constantly selling on the minute. Little wonder one betting house boasts having over two million subscribers. Total stock market investors are barely cracking 1.3 million.
Perhaps the regulator needs to re-imagine its approach. The once-in-a-year CMA challenge won’t cut it. Event-driven forums won’t win the masses. Perhaps setting up Capital Market Clubs (CMS’s) in high schools may recruit some, catching them young.
The idea is to have a song that’s constantly playing. In this regard, upping the investor education spend may be necessary. At three per cent per annum (or Sh35 million) of total income currently, it comparatively looks like a drop in an ocean.

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Two is going mobile. How thousands of youngsters are betting on some 267 leagues around the world via their cell phones should serve as an inspiration. Kenya has the highest number of mobile usage for gambling at 96 per cent according to the Geopoll survey. For capital markets, this means a mobile-phone strategy is vital.
Young investors should be able to deposit, trade, monitor investments and withdraw monies all via their mobile phones. If the on-boarding process can start and end on the mobile phones, then we’ll be heading somewhere. I dream of the day when our market will be mobile phone-driven.
Three is selling the easy entries. Equities and bonds sometimes appear too “proper”. But now that online derivatives trading is a regulated activity, positioning these instruments as something “close” to betting should at least win some converts.
Trading currencies and contracts for differences (CFD’s) – tradable contracts between a client and the broker exchanging the difference in the current value of a share, commodity, index or currency at the contract’s end – can be served as entries to the capital markets world. They’re fast, leveraged and mobile-enabled.
Things that appeal to young minds.