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Ideas & Debate

Top prizes Kenya loses to unregulated sports betting

Marcos Alonso
Chelsea’s Spanish defender Marcos Alonso attempts an overhead kick during the English FA Cup fifth round football match between Chelsea and Manchester United at Stamford Bridge in London on February 18, 2019. PHOTO | AFP 

In 2016, while in a restaurant in a chilly town in Nyandarua County, news arrived that a local man had won a Sh200 million-shilling betting jackpot.

Young men followed the proceedings on TV, and when the winner appeared, the once quiet eatery went wild.

“Anyone can win!”, exclaimed one, a motorcycle helmet still stuck on his head. “I could be the next”, retorted another.

Such perturbing sentiments have made betting a multi-billion-shilling industry in Kenya.

According to GeoPoll, Kenya has the highest proportion of youth engaged in betting in Africa at 76 percent. They spend an average Sh60,000 annually in a country with an annual per capita GDP of Sh145,000.

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Before the massification, authorised betting was for the affluent in high-end casinos, out of reach of the hoi polloi.

But times have changed. The betting options available to ordinary people are staggering: from the slot machines dotting bars to online wagering on horse and dog races.

Sports gambling dominates Africa except for South Africa where lotteries lead. 79 percent of bets in Kenya relate to soccer— from the flashy English premier league to Georgia’s lowly Erovnuli Liga.

Smelling a cash cow, opportunists place bets for people at a fee. The punters-for-hire claim they can predict match outcomes better than the average person. Some people believe them.

Pinhas Dannon of Tel Aviv University compared the capacity of experienced pundits and novices to predict outcomes of the 2017/18 UEFA champions league matches finding no significant difference between them.

Researchers at the Université Laval in Canada posit that the information used by sports bettors, and near-misses, cause cognitive distortions—faulty perceptions of expertise.

The distortions make sports betting more addictive because the gamblers act under the illusion of power and control.

To check runaway sports betting, the government of Kenya imposed a steep 35 percent tax on sports betting revenues but later reduced it to 15 percent after lobbying and blackmail by betting firms. A few months later a ban on the importation of betting machines took effect.

In Uganda, the government chose a strong-arm tactic by banning sports betting altogether.

The primary driver of the betting craze among Kenya’s youth is the prevalence of cheap smartphones, and data to access online betting sites.

Mobile penetration in Kenya stands at 79 percent and is higher among the youth. Mobile money offers both a convenient payment system and credit. There is also substantial interest in sports, especially soccer.

The youth, the majority of the population in Kenya, lack economic opportunities making them susceptible to get-rich-quick schemes like sports gambling.

Researchers from the University of Melbourne note that frequent exposure to adverts and positive attitudes towards betting increases the appetite for it.

Moreover, the betting industry has drawn many commercial players. With more than 20 registered sports betting firms in Kenya, betting prices have reduced, with a bet going for as low as one shilling.

Sports betting is both good and bad.

We start with the good. Sports betting is an entertaining activity that fosters interest in the sport. It is also beneficial for the mobilisation of cash to fund games and charitable activities, yields employment, and tax revenue: Sh4.7 billion between 2014-16.

However, research links betting to over-indebtedness and loss of jobs.

A survey by CGAP found that between 2016 to 2018, Kenyan youths blacklisted by credit bureaus rose from 150,000 to 500,000. It is plausible that some of the cash ends up in gambling.

Ssewanyana and Bitanihirwe link gambling to physical conditions like cardiovascular diseases while psychiatric side-effects make young gamblers truant, perform poorly in school, abuse alcohol, lose school fees in gambling and engage in high-risk sexual behaviour.

Moreover, betting is capital-intensive and generates limited job prospects and could impact on income inequality.

For the poor, betting expenditure at 25-50 percent of income deprives families off livelihoods, leading to loss of family assets, aggravating marital disputes. Scholars link gambling to heightened community violence.

The answer to the betting problem lies in better regulation and education.

The government should set and enforce minimum and maximum betting amounts and frequency to shield the poor.

Also, there should be tighter limits on betting adverts. The Betting, Lotteries and Gaming Act gives the board powers to regulate betting adverts, but the volume of advertising points to lax implementation.

Importantly, there should be surveillance on betting addiction, a public health concern. Suggestions on treating gambling disorders include a combination of medication and psychological interventions and education.

Financial education would also help gamblers discern the impacts of their habits on their financial wellbeing.

The man in Ol Kalou was lucky to reap from betting. For safety, he and his kin were whisked away to some unidentified location.

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