The Betin betting shop in Lumakanda. Betin is Kenya’s second largest gambling company after SportPesa. It is owned by Italians. Betin has opened shops to attract betters who don’t want to bet through the internet. This shop had three employees behind the counter when I took this picture. Notice the motorcycles. These belong to the motorcycle taxi drivers who are making bets in the shop with some of their day’s earnings.
Note to my young male Kenyan and African readers: After you read this report, please make a resolution never to place a bet anywhere at anytime. You are much more likely to be struck by lightning than to win one of those big jackpots. The owners of the gambling companies make the rules and make them to their benefit. If you gamble, you lose. Wake up. If you make this resolution and are on Facebook, “like” this Report from Kenya. I’ll see how many I get.
Regular readers of my Reports from Kenya will remember how positive I have been about the mobile phone system here in Kenya and particularly Safaricom’s M-pesa, mobile money. Yet it has its downside – BETTING. The betting is mostly done through M-pesa and the other online mobile money providers. Safaricom receives 2 US cents for each bet so they are happy with the business.
M-pesa began in 2007 and the first online betting company started in Kenya in 2010. Now there are twenty-seven betting companies. Here are the names of some of the major betting companies: SportPesa, Betin, Betway, Betpawa, Premierebet, Lucky 2 U, 1XBet, Dafa Bet, Atari Gaming, PalmsBet, Betboss and Mozzarbet. Their total income in 2018 was $2 billion. This is incredibly more than 2% of the whole economy of the country. Moreover there are 12 million accounts in a population 50 million people. Of course many betters have accounts in more than one company so the number of active betters is much less than 25 percent of the population.
Ads for the betting companies are everywhere – the newspapers, billboards, and the internet including Facebook, Google, and YouTube. They know that my laptop is in Kenya so I am bombarded with betting ads. Since I am completely opposed to gambling as a total rip-off, I delete as many as I can.
Kenya does not have a state sponsored lottery.
The main betters are male youth. In particular there is a tremendous amount of betting on sports, particularly football (soccer). In the morning when I go to buy my paper, there is a copy/printing kiosk next to the paper man. As I buy the paper I notice a number of young men going into the kiosk to pay 5 US cents for a printout of the previous day’s winners.
SportPesa, one of the largest betting companies, has an ad in the paper indicating the “facts” about its operation. It claims that its revenue is $200 million or 10% of the Kenyan total betting. In June this year alone it claims that it received 705,813 bets. This would imply that over 7 million bets were placed in Kenya in this one month. SportPesa’s gross profits – meaning after all its expenses are deducted from its income – is $90 million for a gross profit margin of 45% (Wow, what a scam betting is!). They claim that they paid $64 million in taxes which would still leave a net profit of 18 per cent. The Kenyan government has just shut down all the gambling companies because they are not abiding by Kenyan laws and paying the appropriate taxes. They did this by forcing all the mobile phone companies to close down their betting accounts and then freezing their bank accounts. The government claims that all the betting companies have paid only $40 million in taxes, less than the amount SportPesa claims it alone paid.
SportPesa is owned by three Kenyans (an ex-Kenya Airways pilot, a Nairobi businessman, and “a female veteran of the gambling industry”), three Bulgarians, and an American businessman. The American is Gene Grand who owns 21% of the company. One of the criticisms of the betting companies is that most of them are owned and controlled by foreigners with the result that much of the “earnings” are moved outside the country – 18% of $2 billion in income would be $360 million, about the equivalent of the foreign aid that the US sends to Kenya in a year. Gene Grant’s “take” for the year would be $7.5 million. Since gambling itself is a scam, the reported amounts are certainly well below the unknown actual amounts.
The newspapers frequently report stories such as, when a student is given his tuition, he gambles it all away and then commits suicide. I have read stories in the newspaper where a better claims that he makes a good living by betting. Unless he is wins one of the big jackpots – the current one from SportPesa is 36,941,787/- ($369,418) – this is impossible.
Government officials, following the lead of many concerned citizens, are alarmed by this gambling addiction. President Uhuru Kenyatta closed down all the mobile betting accounts in order, not only to get the betting companies to pay their tax bills, but to crimp the betting industry. Although Betin’s money market accounts are now inactive, it seems that their customers can still go into the storefront pictured above to bet. I suspect that this will be only a temporary setback for the gambling industry.
SportPesa claims that 60% of their customers are between 25 to 34 years old, while only 5% are 18 to 24 years old. In other words those young men who are still in school or don’t yet have even an ad hoc occupation are not the ones who are betting. Rather it is the older youth. As long as these youth are employed in large numbers in such activities as motorcycle taxi drivers or day laborers with no obvious future, they are going to perk up their life with the hopes of hitting the impossible jackpot. Small winnings now and then keep up their active interest.
It is clear that, as with all gambling, it is the owners of the gambling companies who are the ones who are hitting the jackpot, not once in a lifetime, but daily.
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