Half a million Kenyan youth have fallen into the blacklists of lenders after failing to repay loans borrowed to finance their gambling habits.
Interior Secretary Fred Matiang’i Monday announced the looming enactment of tough laws intended to curb rampant betting across the country.
Dr Matiang’i said industry statistics paint a grim picture of addictive betting that has caused social strife, financial ruin and even suicides.
“We have about 500,000 of our young people who are blacklisted by some of the lending agencies, because they borrowed and cannot pay.
"Most of them borrowed because of betting,” he said Monday after meeting with the Betting Control and Licensing Board (BCLB).
The 1966 law that governs how BCLB regulates the Kenyan betting industry has been outdated as the technology and processes around gambling have evolved.
The weak legislation has left the youth exposed to negative impact of betting without adequate legal protection.
Kenya’s leading betting company SportPesa said it welcomed Dr Matiang’i’s plan to reform the sector.
“A well regulated industry that adopts best practice is good for government, operators, citizens and all stakeholders.
"We appreciate Dr Matiang’i’s consultative approach and as a good corporate citizen will work with him to find a joint solution for the sector,” said SportPesa CEO Ronald Karauri in a statement.
According to surveying platform Geopoll, Kenya has the highest proportion of youth engaged in betting in Africa at 76 percent.
They spend an average of Sh5,000 per month, mostly on football bets.
This in a country with a growing digital credit market where operators such as M-Shwari, KCB M-Pesa, Tala, MCoop Cash and Equity Eazzy compete to lend easy cash to the youth.
A survey by think-tank CGAP found that Kenyan youth blacklisted by credit bureaus rose from 150,000 to 500,000 between 2016 to 2018, an indication that some of the cash ends up in gambling.
“We cannot have this situation in our country. We must create law and order,” said Dr Matiang’i.
He gave all gaming operators three months to pay all due taxes, warning that his ministry will not renew licences for firms indebted to the taxman.
He said all betting firms will have to apply for operating licences afresh starting July 1, as the government seeks to net firms that have been evading billions in taxes despite reaping huge profits.
The Interior CS also hinted at prosecution of firms found criminally liable for tax evasion, as he held that “the law has to take its course”.
Dr Matiang’í directed the BCLB to come up with a status report on the betting operators in the country within 30 days.
Uganda President Yoweri Museveni three months ago banned betting and all forms of gambling in a bid to tackle addiction among low-income earners and the youth in the country.