Many Kenyans have resorted to sports betting to take their chance on earning a fortune through single bets, multibets, or jackpots in Kenya. The betting craze in Kenya may be an excellent means for the locals to make money to supplement their current income or to serve as their primary source of income, but other people think otherwise.
Kenyan regulators are currently engaged in a battle with many of the country’s top sports betting companies, and they imposed a new 20% tax on all winnings. The additional tax is entirely separate from the existing annual business taxes imposed on the sports betting companies themselves.
Two of the largest sports betting companies in Kenya, SportPesa and Betin, have ceased their operations in Kenya in response to the additional 20% tax. SportPesa even stated that it wouldn’t operate in Kenya until there is a friendlier regulatory environment in the country.
The additional taxes have come amidst the growing public criticism on sports betting companies and their influence on Kenyans. Many people see sports betting as a means to get into poverty, and their belief that it exploits its customers is supported by how such companies are thriving into multimillion-dollar businesses.
Despite the negative criticism and the new regulations towards sports betting, it’s still unlikely that the betting industry will cease as more Kenyans. However, the industry will still be affected. The following are the current effects of the new betting regulations in Kenya:
Withdrawal of Sponsorships
Many sports betting companies have signed sponsorship deals with Kenyan athletes and teams, including local football clubs. If they cease their operations, then they will likely withdraw their sponsorships as well. Clubs reliant on a single sponsor for their activities will suffer a huge blow when support is withdrawn.
Sports in Kenya will suffer from the sponsorship withdrawals from the betting companies operating in the country, especially since the national government has a hard time allotting the necessary funds to support their national teams. The Kenya Premier League will also face a blurred future in light of the closures.
Kenyan professional boxer Zarika Fatuma recently complained of the poor preparation and the inadequate support of the government that led to her losing the World Boxing Super Bantamweight title to Yamileth Mercado. She received insufficient support after her main sponsors left the country due to the stricter betting regulations.
Multiple sports betting companies have already shut down after the stricter betting regulations have been imposed, besides Betin and Sportpesa. The closure of such companies resulted in many job losses, from the employees themselves to the companies’ retailing partners across the nation.
Despite the obvious loss of jobs, many Kenyans see the closure of several betting companies in the country as a relief as many Kenyan youths are hooked and addicted to the local betting culture. Several people believe that sports betting in Kenya must be curbed to keep the youth from getting addicted.
Possible Increase of Sports Bettors
Sports betting is popular in Kenya due to how numerous low-income earners are. Besides the low-income earners, many are also currently unemployed. The 2018 data of the National Bureau of Statistics showed that 7 million Kenyans were unemployed, with about 1.4 million of them desperately looking for work.
Many bettors feel that they can gamble to have some source of income. Sports betting has even been able to lift several bettors from poverty as the punters won jackpots and multibets. Disciplined bettors who are content with many small wins are also able to win big in the long run.
The fact that sports bettors can bet as low as Ksh 50 means that betting is affordable even for low-income earners, and those who have just lost their jobs due to sports betting company closures can place low wagers.
The new betting regulations imposed by the Kenyan government is a double-edged sword, especially since the fact that it managed to close down betting companies also meant that many sports teams would suffer. The closure of many betting companies also means that many Kenyans will lose their jobs and their sources of income.
Many sports bettors will also need to look for other sites to place their bets on, especially if they were regulars of the companies that closed down. The sports betting companies that remained in the country might take advantage of the situation and sponsor the teams themselves, especially since there’s a chance that punters will start frequenting the remaining betting operators.