Economy

Regulator now orders audit on betting firms’ sponsorship deals

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Betting Control and Licensing Board Chief Executive Officer (CEO) Peter Mbugi. PHOTO | JEFF ANGOTE | NMG

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Summary

  • BCLB chief executive officer Peter Mbugi has written to all gaming operators to disclose activities, amounts and beneficiaries of their corporate social responsibility spending.
  • Mr Mbugi said while the firms are not compelled to spend specific amounts on CSR activities, they have to submit records of how much they have channeled back to society.
  • He said most firms claim their marketing spend is CSR or pledge to support local football clubs and community projects but fail to actualise the spend.

The betting regulator has ordered all gaming companies to provide an audit of all sponsorship deals and community investments for review.

Betting Control and Licensing Board (BCLB) chief executive officer Peter Mbugi has written to all gaming operators to disclose activities, amounts and beneficiaries of their corporate social responsibility spending.

Mr Mbugi said while the firms are not compelled to spend specific amounts on CSR activities, they have to submit records of how much they have channeled back to society.

He said most firms claim their marketing spend is CSR or pledge to support local football clubs and community projects but fail to actualise the spend.

Betting companies make supernormal profits with a recent revelation that SportPesa made a net profit of Sh12.9 billion for its owners in Kenya in its first five years of operation, underscoring the lucrative business in comparison to what is spent as CSR.

“The board wishes to inform you to submit report on all CSR activities conducted during the licensing period. This should detail the name of activities; amounts spent and evidence of the same should be attached to the report,” Mr Mbugi said.

Kenya betting laws are not specific on how much betting companies should spend on CSR activities unless for public lotteries that are intended to raise funds for social services, public welfare and relief of distress.

BCLB has the authority to order the public lotteries to spend at least 25 percent of the gross proceeds to be devoted to the object for which the lottery is promoted.

The rest of the betting firms sponsor sport clubs and donate to charities as part of their CSR to give back to the community.

Mr Mbugi said the betting companies just like any other business have an obligation on spending part of their profits in the communities they operate over and above their tax contributions to the country.

Some betting firms have been accused of hoodwinking communities with sponsorship deals and failing to follow up while some betting firms do not do any community work.

The audit will also shine a light on web-based gambling companies that are not licensed to operate in the country and neither pay taxes nor invest in the community.

Mr Mbugi said whenever they identify such firms they work with the communications authority to bring down their websites.

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