The Betting Bizarreness
It has become the new way of life for Kenyans of all calibers, educated and non-educated, formally employed or informally employed. Kenyans have surely indulged in the betting phenomenon. To some it is a way of life, to others it is a business opportunity. Not forgetting that also to some, it has been a road to tragedy.
The sports betting industry has grown, flourished by the Kenyans hunger for betting action and. High odd of winning and sweet phrases such as, “They play, you win” have be used to lure Kenyans to place bets after bets. Some of the betting companies in the country include sportspesa, Hollywoodbets, Betin, BetPawa, Elitebet, M-Cheza, Bet Yetu, Betway, Lucky2u, Kenya Sports Bet, JustBet, Eazi Bet, Just Bet, Kwikbet, Goldbet Kenya, and Betika.com. It is clear that the incentives are high, the industry is growing.
On the face of it, the betting enthusiasts see the odds of winning and gaining returns on their money, investment. On the other hand, betting companies are just analytical and works well with the information at hand. One thing is clear, the industry is not under the influence of forces of supply and demand like in a perfect market. The betting companies decides how much to give out and changes the odds at their own liberty.
A study on betting in different African countries indicate that Kenya youth has the highest number of youth at 76% as compared to Uganda and Ghana that have 57% and 42% respectively. 79% of the bets placed by the youth are on football matches. The most convenient tool for betting among the youth in Kenya is mobile with 75% of those engaged in betting using it.
Benefits of sports betting
Betting is a form of gambling, a trade that has had a mark across the globe. Macau Town in China takes the pride of being the largest town to rely on gambling, making a KES. 45T in 2014. Las Vegas in US made KES. 6.5T. Las Vegas has had its foundation based on gambling and 90% of the economy there is reliant on gambling.
Well, in Kenya, the sports betting companies are making a mark announcing their presence. The National football league is sponsored by Sportpesa, a betting company. Sportpesa also sponsors, Gor Mahia, AFC leopard and the National Rugby Sevens team among other sporting events. This is on top of sponsoring English football league teams, Hull City and Everton.
The gambling and sports betting industry was in 2014 was reported to generate Ksh.2 billion and in 2015 Ksh.2.2 billion. This figure has been estimated to rise to Ksh.2.9 by 2019. The popularity of sports betting among youth in Kenya continues to fuel growth in the industry.
The government has decided it is time to take its share of the cake in the Sports betting returns. The Finance Act was finally signed into a law and settled for the president’s recommendation of reducing the proposed tax rates from 50% to 35%. The new tax rates of 35% affects the Betting, lotteries and gambling companies. The lotteries were earlier charged 5%, betting firms 7.5%, casinos 12% and raffle competitions such as raffles were charged 15%. The government plans to use the income from taxes earned for the development of sports industry.
Sportpesa, which is among the leading betting companies in Kenya, has not gladly accepted this new taxing structure. They have announced the termination of the sponsorship deals for all local sports clubs. They claim this is meant to help them nurse the economic injuries that the new taxes will cause in their books of account.
The affected clubs and associations include Gor Mahia, AFC Leopards, Kenya Rugby Sevens, KPL, FKF and the boxing association. The clubs that have been enjoying smooth running of affairs due to readily available funds should get ready for harsh times ahead. This makes one wonder, how committed is the Kenyan government to upgrading the sports industry or is it being blinded by urge to increase their revenue collection. In this tussle, the sportsmen and women will feel the heat, surely something needs to be done.
The negative effects
The major reason indicated by the CS Treasury on the heavy taxation of betting and lottery is the negative consequences of the industry among the youth. To the youth, it is an easy way of earning money (when you are lucky) and you can bet with as little as KES. 50 and win big stakes. However, the hard earned money has been lost to betting activities, some have committed suicide for their losses, and relationships have been broken due to the betting and gambling behavior. Some youths have folded their hands to formal ways of making money and indulge into this with both feet. Few have experienced the “Abisai effect” of becoming newest millionaires.
Well, for the betting firms, it is always a buzz of activity as their risk analysts and odd compilers work on the numbers in a way that best serves their interests. This is one industry where the basic rule of business existing to serve the needs of the customers does not guide the business activities. The betting customers are out to win, however only few accomplish this.
For the Kenyans, betting continues. The government has joined in the bizarre. The industry is still in the modelling process, soon a balance will be achieved. Maybe when that happens, I will place my first bet.
