Both online and land-based sports betting is covered in Kenys’ Betting, Lotteries and Gaming Act and is regulated by the Betting Control and Licensing Board (BCLB). Sports betting has been present since the 1960s, but it has grown considerably since legal online sports betting was first offered in Kenya in 2013. Te sports betting market dominates the gambling landscape, especially online sports betting, which has increased due to the success of mobile money banking applications.
Today, Kenya is Africa’s leading fintech market, due to the huge upswing in the use of mobile money, which began with M- Pesa. Launched in Kenya by communications company Safaricom in 2007, (M stands for mobile, Pesa is the Swahili word for money) there are around 30 million M-Pesa accounts in Kenya, roughly equivalent to the country’s adult population. In addition, Kenya has the highest number of betting youths in sub- Saharan Africa with some estimates putting mobile usage for gambling at 96 per cent.
Betting firm MozzartBet has already gone to court seeking to reverse a decision that declared part of their money as proceeds made by money laundering via M-Pesa. In April, a judge ruled that the money held in three bank accounts was part of a money- laundering scheme and should be forfeited. However the
company says it had paid the money seized and forfeited to the State, to contract another firm to provide it with
customised betting software.
Tere are around 30 sportsbooks licensed to operate in Kenya. Te government has shown increasing concern over the rise of sports betting and has initiated a number of measures to curb excessive gambling. Te Treasury announced in April that it is was once again seeking to reintroduce the 20 per cent excise tax on betting. A similar levy led to many of the leading operators to temporarily leave the market in 2019. Increased taxes on players reflects a growing trend in East Africa. Tanzania recently imposed taxes of 12 per cent and 10 per cent applicable on the amount or value of all winnings in casinos and sports betting. In Uganda, the tax on the value of gaming winnings has been set at 15 per cent.
Meanwhile, Nairobi’s city council has announced efforts to reduce land-based gambling so that it would be restricted to land-based five star casinos via the Nairobi
City County Betting Lotteries, Gaming Amendment Bill (2021). Tere are around 30 casinos nationwide (with around 1,800 casino slots), mostly as part of hotels with as many as 23 casinos in Nairobi , while only seven counties are licensed to house casinos and other gambling operations. Gambling in Nairobi would also be banned during the day with the ban also extending to online gambling. Anyone found to be breaking the law could face a fine of Sh10 million or a four-year jail term, according to the new bill. However, the BCLB has announced that it would sue if the bill is approved, as they argue that the local government does not have the authority to impose such a ban.
In addition, betting firms are now in the spotlight over money laundering claims after a money laundering risks review report was launched by Interior Cabinet Secretary, Fred Matiang’i. Te report stated that large payouts by betting companies were being used to launder billions. According to the report, the money laundering risk was noted “where proceeds from sports betting could be co-mingled with funds from predictable crimes and passed off as genuine winnings with a possible collusion on who takes the winnings, which are later either reverted into the syndicate or transferred outside the country.”
Betting firm MozzartBet is already taking legal action to reverse a court decision that declared part of their money as proceeds made via money laundering utilising M- Pesa. In April, a judge ruled that the money held in three bank accounts was part of a money-laundering scheme and should be forfeited to the government. However the company says it had paid the money seized and forfeited to the State, to contract another firm to provide it with customised betting software.
Meanwhile, the government is cracking down on licence holders. In July, it announced that leading Kenyan sports betting firm, Sportpesa, would be one of 97 betting firms that would be blocked from using mobile money platforms following a government order to suspend payments for companies that do not have an operating licence from the board.
Communications Authority of Kenya (CA) Director-General, Ezra Chiloba, ordered mobile network operators to suspend the payment channels of the betting firms as the board reviews online licences.
“Te Mobile Network Operators are therefore required to discontinue with immediate effect the issuance of licensed ICT platforms and services including USSD, shortcodes and paybill numbers to betting, lotteries and gaming entities whose BCLB licences for 2022-23 have not been renewed,” Mr Chiloba said in a notice dated July 1. Te BCLB added that only three operators (Betika, Spotika and Betafrique) had been granted permission to operate in the 2022/23 financial year.
WIRE / PULSE / INSIGHT / REPORTS P33
KENYA
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