Banks want State tracking of bets in illicit cash crackdown


Kenya Bankers Association (KBA) CEO Habil Olaka. PHOTO | SALATON NJAU | NMG

Banks are pushing for changes to the law that will compel betting firms to report suspicious deposits and withdrawals from gaming accounts in the latest plan against money laundering.

Industry lobby Kenya Bankers Association (KBA) said betting sites offer convenient platforms to clean dirty money prompting the push to compel gaming firms to report suspicious bets to the Financial Reporting Centre (FRC).

KBA petitioned Parliament to amend the Proceeds of Crime and Money Laundering (Amendment) Bill, 2021 and compel industry regulator Betting Control and Licensing Board (BCLB) to monitor suspicious bets and transactions totalling at least Sh1 million ($10,000) and above.

The push targets punters dealing in large transactions, those putting money in their betting wallets and staking a small fraction of it as well as those making small, regular and suspicious bets.

Betting firms are not currently required by law to report the suspicious transactions to FRC—which is mandated to track illicit cash— making it a convenient avenue for cleaning dirty cash.

“Inclusion of Betting Control and Licensing Board (BCLB) since some individuals can use betting as an avenue for money laundering,” the lobby said in its petition.

The petition is contained in the review of the Proceeds of Crime and Money Laundering (Amendment) Bill, 2021 that is currently before Parliament for debate.

The committee’s decision on the proposal remains unclear with the Bill set for debate and passage into law before February.

Chief executive officers of betting firms have in the past said that criminals can feed their illicit money into their betting wallets, bet a small share of the cash before cashing out with vast majority of the cash.

A number of accounts have been frozen over the past two years as the government steps up the war on money laundering.

The push comes two years since BCLB made it compulsory for betting firms to report transactions above Sh1 million ($10,000) or suspicious bets to the regulator.

BCLB included the reporting obligations for betting firms in their annual licences granted from July 2019 amid increased concerns that betting firms are emerging as a vehicle to launder proceeds of crime and corruption.

The State has since 2019 stepped up the war on betting sites amid the growing concerns that the multi-billion industry is being used to launder money.

FRC last year opened investigations into SportPesa for possible money laundering in the wake of claims the sports betting firm wired $278 million (Sh30 billion) from its local accounts to offshore banks.

Other betting firms have been flagged for possible money laundering for sending millions of shilling into the gaming accounts of punters.

The betting industry has grown over the years to hit a combined revenue base of over Sh200 billion, offering a perfect market for criminals seeking to launder dirty money.

Betting is in a list of other transactions targeted in the war on money laundering including selling of property; creation, operation and management of companies, management of bank, savings and shares accounts on behalf of clients.

The Proceeds of Crime and Money Laundering (Amendment) Bill, 2021 also targets to designate advocates, notaries and other independent legal professionals as reporting entities for dirty cash dealings.

The renewed bid comes ahead of the second assessment of Kenya for compliance with international anti-money laundering rules this year after the first one in 2010 found deficiencies in curbing illicit cash transactions.

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