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Kenya’s notorious gambling Counties revealed
67 percent of Nakuru dwellers have knowledge of the cost of borrowing, with 16.9 percent of the residents considered financially healthy, compared to 60.3 percent of residents in Siaya and 26.7 percent who are financially strong. Those figures stand at 52 percent and 19.5 percent respectively for Busia residents.
By Steve UMIDHA
The enormous scale of Kenya’s betting addiction is rampant in Nakuru, Busia, and Siaya Counties where a chunk of the population sees punters lose hundreds of thousands of Shillings to the notorious vice, a new study reveals.
Released in November, the latest FinAccess Household Survey attributed the widespread practice to the high level of financial literacy in those regions, underlining the money-spinning national love affair that has grown prevalent over the years.
The three Counties recorded the highest cases of gambling at 26 percent, 22 percent, and 19 percent, respectively, which is above the national average of 11 percent, with football gaming by far the most popular betting activity among punters in those regions.
“It is worth noting that Nakuru is among the counties with the highest financial literacy levels of 67 percent proxied by the ability of the respondents to calculate the cost of interest on a loan, and just below Nairobi and Bomet counties at 70 percent,” reads in part the study by the Central Bank of Kenya (CBK) and the Kenya National Bureau of Statistics (KNBS).
From brain hacks to dark nudges and near misses, betting companies have over the years employed an arsenal of clever tricks to tempt punters into spending more money and a good number have willingly taken the bait.
The above-mentioned Counties, according to the report are now leading in the practice which fast gained prominence in around 2014 when the market leader in sports betting, SportPesa launched in Kenya.
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Financial Sector Deepening Kenya’s study mirrors a December 2021 survey by the US research firm GeoPoll which found that 84 percent of Kenyan youth polled had tried betting, and one-third of those reported betting on at least a daily basis.
The 2019 GeoPoll study found that gambling was most popular among males aged 25-34, of whom 77 percent have gambled in the past, with 58 percent of this group gambling at least once a week. Females aged over 35 years are the least likely participants in gambling. Only 46 percent of this population have ever gambled.
Of those who gamble, the report, undertaken in partnership with Paris-based multinational market research and consulting firm Ipsos, found that 47 percent are ‘light’ gamblers who place bets at least once a month or less, and only 10 percent of gamblers place bets more than once each day.
But the latest FinAccess report now places the three Counties in an ‘unwanted’ spot and is set to heighten scrutiny on the sector that has not only been accused of beguiling Kenyan youth into the practice but also not rendering unto Caesar the corresponding share that is Caesar’s.
This follows concerns that most betting firms are not declaring ‘honest’ amounts to the exchequer, commensurate with what they actually raise in revenues.
Indeed, the aggregated figures by the Kenya Revenue Authority (KRA) show that actual receipts from betting taxes for the year ended June 2022, stood at just Sh3.4 billion against the Sh5.4 billion the national treasury had set for KRA to raise from such levies.
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This is after the treasury originally set a Sh4.2 billion income target for collection by the taxman from gaming and betting firms before reviewing the figures to Sh1.2 billion for the period owing to licensing requirements by the regulator.
In the year ended June 2021, KRA raised Sh2.2.9 billion in betting taxes against a target revision of Sh2.02 billion, which is lower than the ShSh3.7 billion treasury had originally hoped would accrue from such payments.
Betting tax is charged at the rate of 15 percent of the revenue generated from betting. The betting and gaming companies were required to deduct 20 percent tax from the winnings of the punters and remit this to the taxman.
Similarly, Kenya last year reintroduced excise duty on betting stakes to 7.5 percent, which means the government first takes Sh7.50 for every Sh100 a gambler places as a bet irrespective of winnings.