This morning Kenya’s relationships with the betting industry have finally reached a boiling point. The president gives bettors 48 hours to withdraw the money. Once that time is out, the industry will be effectively shut down. How did that happen and what implications does it have? You’ll learn about that in the article.
Kenya’s gambling problem
Kenya’s bit gambling problem has been in the spotlight of the mainstream media for years. Since 2017, it’s been covered by multiple news outlets including the BBC. There’s a lot of research on the topic, but to put it simply, the effects are devastating.
In wealthier countries like Germany, the UK, or South Africa, gambling doesn’t create a huge problem. The poor gamble for a shot at winning a fortune and stop once they lose too much, the well-off gamble for leisure and don’t really count money.
Depending on the country, there are anywhere from 2% to 5% of gamblers who can’t control their habit and become addicted. They suffer economically because gambling often leads them in debt. However, developed countries spend a significant amount of money to help them. The industry members share a bit of their revenue to fight the issue as well.
Even though some people suffer, they’re taken care of. Their numbers are also not big enough to cause a humanitarian crisis. It’s a problem that’s being fought.
In Kenya, however, it’s different. The UK population got scared and pushed for more regulations when it was discovered over 450,000 have a gambling disorder. The picture in Kenya would have them freeze in fear. It’s estimated that 78% of university students are addicted to gambling. The experts believe the number to be even greater for the uneducated population.
When something like that happens to your country, you know you have to do something to help the citizens. Here’s what Kenya did.
The tax dispute
The UK had a significantly smaller gambling problem in their country. The solution included three major steps:
- Preventing minors from playing
- Decreasing the maximum bet amount
- Treating the addicts
Kids have a much higher chance of getting addicted, which will continue in their adult life. Addicts also suffer from depression and loneliness. Some experts say these two factors cause the person to grow addicted to something, be it gambling or drugs. So the UK regulating body is decreasing the damage done to addicts while trying to decrease the number of people who get addicted as kids.
What did the Kenyan government do? They slapped a 35% tax on the industry. They didn’t create a clinic to treat gambling addicts, they didn’t try to prevent kids from gambling at betting shops. They just wanted a piece of the pie.
If Kenyan bookmakers are to be trusted, the politicians want more pie than there is. The government has estimated the industry is worth $2 billion. When the taxes they got didn’t match the number, they got mad and threatened to take back the licenses if the industry doesn’t pay up.
The industry leaders claim their income, while pretty big, is nowhere near $2 billion. Since the time for paying taxes has passed, Kenya is now withdrawing all licenses in two days.
On 15 July, they will order telecommunication companies to block 27 betting operators from receiving and making payments. Anyone who doesn’t withdraw their funds will lose them.
Since there are 12 million Kenyans with a betting e-wallet account, and the decision is announced on Friday, when many people go to spend time with their family, many Kenyans will lose their stake at betting stores.
This decision sets a troubling incident for all African countries. If other governments think they can solve problems in such a crude way, there’s going to be a lot of losses for the government, the industry, and the people.