Sports Betting Landscape in Kenya

By SK and PanoramicDon

{This blog post is done as a collabo of two bloggers, SportsKenya and Panoramicdon and shall appear in the respective blogs. It has been a work in progress and not in any way a duplication of previous or current posts in other blogs. Where possible we have attributed the posts that stood out on the same. We welcome your views and experiences in this and seek your indulgence for the next few minutes…Enjoy!}

Image courtesy of sports_betting

1.       Intro, Overview, Legal Framework

Sport betting is a phenomenon that is quickly gripping Kenya. A university student, matatu tout, young professional, boda boda guy, retiree and watchman are all united in anxiety and joy or sorrow depending on the outcome of a sporting event for which they placed a bet on. Some might wonder why it took so long but the multi-billion dollar sport betting industry is now firmly established in Kenya and steadily growing.

Unlike a number of African countries, Kenya has been quite liberal with gambling from independence. The Betting, Lotteries and Gaming Act was enacted in 1966 and has been the legal framework governing the industry since then. The Constitution of Kenya (2010) partly devolved the function of ‘betting, casino and other forms of gambling.’ Both levels of government were given this mandate but there has been no subsequent legislation from both houses of Parliament to determine which specific function will be performed by which level of government.

The Betting Control and Licensing Board (BCLB) was established by an Act of Parliament Chap 131 Laws of Kenya in 1966. Prior to the Act, the functions of the board were handled by the Kenya Police Department. The BCLB has been licensing and regulating betting, casinos and other forms of gambling.  The BCLB Act provides for the control and licensing of betting and gaming premises such as casinos and any other forms of gambling. It also provides for the authorization of lotteries and prize competition as well as eradication of illegal gambling. Through these mechanisms, the Kenyan government has managed to protect and safeguard the public and third parties from unscrupulous betting operators while also providing certain mandatory requirements relating to licensing, ticketing, and submissions of returns, bookmaking and totalizing. Several betting organisations have also been established.

For a number of years though the gaming and betting industry had seen its growth falter but has turned around in the last 5 years making it viable  for employment and revenue generation with renewed dynamic advertising and stringent State supervision. The Kenyan government continues to play a key role in the legal administration and regulation/controlling of betting activities in Kenyan sports.

With the new constitution enacted in 2010 and 2013 elections which led to the establishment of devolved units of governance, Governors naturally wanted the application of the devolved function so as to tap on this potentially lucrative revenue source. There has however been a conflict of opinion between the Council of Governors and the Betting Control Board over licensing and regulation of gambling in specific jurisdictions. The Board argues that there is some security element to gambling hence the reason why BCLB is domiciled under the Ministry of Interior. The gambling industry has been known to attract organized criminal groups due to the massive profits of the industry.

The disagreement between the two levels of government necessitated the Transition Authority to form an Inter-Agency Committee as mandated by law to try and find a way out of the impasse. In the interim, the national government continues license and regulate lottery and gambling activities in the country through the BCLB. County governments were given a ‘supervisory role’ and allowed to license business premises for national lotteries. Counties were also given temporary mandate to issue pool table permits in their jurisdictions. An inter-agency technical committee was formed in August 2015 to help resolve this issue and in the interim the national government will continue in its role to license and regulate casinos and other forms of gambling with the counties having only a supervisory role.

Sports Act

Another Law is the Sports Act No. 25 of 2013 It states as follows in Part III -11 of the Act on the Establishment of the National Sports Fund,“Into the Fund all the proceeds of any sports lottery, investments and any other payments required by this Act to be paid into the Fund”It has also mentioned as one of the functions of the Board of Trustees, part III-17
(d) “Raise funds through sports lotteries, investments and any other means and disburse the funds for the development of sports and recreation”(f) “In relation to the national sports lottery, ensure that any lottery carried out for the purposes of the Fund complies with the relevant law”As well as the advisory role of the Trustees to the Cabinet Secretary as noted below;(g) “Advise the Cabinet Secretary on the establishment and implementation of a social responsibility programme in respect of the national sports lottery and any other matter relating to the national sports lottery which the Cabinet Secretary may require advice”

These clauses in the Sports Act of 2013 give credence to the potent of sports betting and ingrains this to the National Sport Fund hoping to generate a benevolence of sorts to the country’s first sports kitty. If fully operationalized, it would help ease the taxpayer’s burden of funding sports teams during national duty, invest in some sports causes and hopefully set up some basic sports infrastructure where possible.

Who wins what, where and when - image courtesy of www.sportspick.info

2.       Popularity of Sports Betting in Kenya

Sport betting has not always been this popular in Kenya. Aside from horse racing at Ngong’ racecourse, you had to go to some betting house at Odeon to place a wager on sport events until recently. The most popular lottery then was the Kenya Charity Sweepstakes with its out-and-out and extensive network of agents across the country. However this monopoly was diminished with the growth of the mobile telephony and use of mobile money payments, which eased the placing and payment of bets.

The popularity of the English Premier League, a growing middle class with disposable income and a favorable legal framework meant the necessary conditions were in place for the growth of sports betting in the country. In about a decade, mobile phones got to every corner of the country with it - mobile money and easier access to the Internet. Betting firms now have the means to reach all corners of the country.

What was once a potentially lucrative industry with limited reach, can now be accessed by any Kenyan with a mobile device. Everyone now wants a piece of the pie. Sport betting companies have been quickly setting up in the country under a blitz of publicity. They have done their homework and know that of the ‘exposure effect’ where people are more likely to gamble if exposed to some form of gambling. 

3 .       Brief Review of the top 4 Betting Companies in Kenya

Having seen the sports betting space grow by leaps and bounds in the last 3 years, we shall profile the main players in this space.

a) SportPesa -This is the current undisputed ‘king’ of sports betting in Kenya, appropriately named SportPesa (maybe to ride the mPesa wave…???...), has over 1,000,000 registered users, with over half those users being active monthly users. The holding company is the Pevan East Africa Limited, having launched in Kenya in 2013. This platform has managed to demystify sports betting by taking advantage of mobile phone payments among a range of channels to reach the widest and most remote audiences in the country. The company has leveraged its position by making major sponsorships of the Kenya footballing league (Kenya Premier League renaming it to ‘SportPesa Premier League or The SPL’) and the Super 8 tournament to its stable. The company’s CEO is one Captain Ronald Karauri (son of former Kenya Football Federation honcho Matthew Adams Karauri, fruit doesn’t fall far from the tree…). 

Besides sponsoring the local league, it has also exploited the love of Kenyan football fans of the English Premier League to appeal to all and sundry. It also allows betting on UEFA Champions League and Europa League too. Predictions on other European Leagues are also permitted as are basketball, tennis and rugby league games.

The well-oiled machine has been able to bring on board all major mobile telcos and media houses to help it push across a wide discerning public. It also has the major media houses to count as its partners. The company’s marketing and PR have also been on a major blitz for some time now with concerts (such as the SportPesa Festival) and other forms such as outdoor publicity giving it top-of-mind presence over other sports betting platforms. It has used some of the well-known local music artistes such as Wyre to push their brand to the youthful populace. It runs a news site www.sportpesanews.com aggregating football news from across major leagues of the world. Its site www.sportpesa.com was ranked among the top 10 most visited websites in Kenya year ending December 2015.

Check their tweets via Twitter handle @SportPesa

b)  Betway Kenya – operating under Jambo Marketing Limited, the sports betting platform is more famous across the seas being a principal sponsor of EPL team West Ham United.  The ‘Betway’ brand is managed globally by Maltese and Guernsey-based Betway Limited. It is the leading sports betting platform in the UK and is hoping to leverage on the English connection to reap big in Kenya. It officially launched in Kenya in July 2015 after issuance of the BCLB license.

Among the other betting platforms, it would boost of some worthy international appeal having cut its teeth in the UK and other European markets. It boosts of major sponsorship deals including the West Ham United, Premier League of Darts (UK) –one of the biggest sport there, snooker, tennis and horse-racing.

In August 2015, it courted controversy after it emerged that majority ownership is held by British and South African nationals as well as breaching its license by using mobile phone platforms, after implying it would be an online gaming one. This may have led to its cautious approach to the local scene. It is yet to make as much traction in Kenya but we can only guess it will be in this for the long haul once it is able to master the mobile phone and offer a distinguishing feature and service to the other sports betting platforms.

You can follow their updates on Twitter using @Betway_KE

c)   Betin Kenya – this platform is managed by GamCode company incorporated in Kenya and with links to GoldBet Group, one of the largest betting and gaming operators in Africa and Europe. It has online operations in Europe and is said to be the largest operator in Italy with over 1,000 retail shops.  Besides Kenya, it also operates in in Nigeria under the brand name “Bet9ja” which has over 3000 shops in the expansive West African country. It also operates in Uganda as Betin Uganda for sports betting for both online and offline sports products, having acquired the national lottery license to exclusively operate the ‘Play Lotto’ brand.

Plans are underway in Kenya to roll out the setting up of retail shops across the country. This betting platform specializes on online betting but also uses mobile devices. Its main distinction is the multiplicity of sporting disciplines to bet on including football, basketball, tennis, hockey, athletics, horse racing and even dog racing. It also incorporates an online casino and virtual sports betting (the latter being same as other sports betting platforms).  

Though not explicitly stated, it may have links to the Curacao-based Betin.com. For their tweets, check out the Twitter handle @BetinKenya

d)  BetYetu – is a platform run by Oxygen 8 East Africa. It also has Standard Group as one of its main partners. However the site has been having capacity challenges of late, making access difficult when users decide to log on to place their bets. Their focus is mainly on football, basketball and tennis. Along with one other sports betting platform, they seek to address responsible gambling.

You can follow their tweets at @BetYetu

e)   mCheza – this is the latest entrant into the Kenyan sports betting act. Represented by one Peter Kirimi, the company launched with razzmatazz in December 2015. The holding company is Acumen Communications Limited with the global partner being Greek-based Intralot, through its sports betting management arm. Among its directors is former media personality Julie Gichuru.

Given its being the most recent of the sports betting companies, it has managed to build some buzz around its brand. It has also enlisted some leading media personalities and uses their tweets on the mCheza brand to reach Kenyan social media users. It also sponsored the Sports Personality of the Year Awards –SOYA to the tune of KES 3 million to show its willingness to play in this space. It has a war-chest of about KES 1.5 billion to grow its fledging business in Kenya. There are a number of sports disciplines which one can bet on including; football, basketball, baseball, American football, boxing, cricket, rugby, motorsport and golf.

You can follow their tweets @mCheza

Other leading sports betting platforms worth mentioning include;

-          EliteBet Kenya ;

-          JustBet;

-          Lucky2U and

-          Kenya Sports Bet

Another blogger, Bankelele had profiled the sector in a 2-part series of Sports Betting Coming of Age in Kenya Part 1 and Part 2 for more details on how to play and participate in the respective sports betting platforms.

4.        Problems of Gambling and Sports Betting

Betting is not universally legal due to negative effects that it may have on individuals and the society. Top of the list of problems is addiction where some become compulsive gamblers. Sport betting is considered a skill-based form of gambling as opposed to a pure game of chance. Punters place bets with their choices advised by accumulated knowledge of a sport. While this is true to some extent, the element of luck is very much present with bets placed on such niche categories like number of corners and goals scored after a certain minute, among others.

While majority of gamblers will indulge without getting hooked, a small number will suffer from the worst of gambling addiction. Problem gamblers become so engulfed in gambling that they basically cease to exist as socially-functional human beings. Cases of debt, financial ruin, theft, job losses, ruined relationships and even suicide have been reported among compulsive gamblers who must indulge regardless of harm done to self or loved ones. The former Arsenal and Scottish striker John Hartson was a high profile case of addictive sport gambling and he considered his fight against gambling bigger than his cancer fight.

The question for Kenya therefore is how do we identify problem gamblers and what measures will be put in place to cater to them as sport betting grows exponentially. In other civilizations, part of the revenue from gambling is used to fund social facilities that offer help to problem gamblers. Victims of gambling addiction have been known to recover with treatment.

The threat of the gambling industry being infiltrated by organized criminal groups is also a problem to contend with. The American mafia helped transformed Las Vegas from an unfavorable desert town to the Mecca of gambling after seeing the lucrative nature of the industry in Batista’s Cuba. The mafia would bribe law enforcement and judicial officials and made huge amounts from the industry. For decades, the mob ran the gambling industry in the famous desert city but were eventually chased out of town in the 1980’s.

In modern times, organized crime has continued to reap from sport betting. In wanting to control the outcome of games and therefore maximize on revenues, criminals have been known to bribe or coerce players to commit certain actions on the field during play. Match fixing is a big problem that has affected most professional sports. Interpol has been going after these shadowy rings that transcend international borders with mixed results. How Kenya will address such challenges if they manifest themselves in the years to come will be something to watch out for.

5.       Betting in Africa and rest of the World

Going further afield in Africa, sports betting is biggest in South Africa where the country’s multi-disciplinary acts in rugby, cricket, football, and athletics makes it a sports punt’s playfield. A PwC report on Gambling Outlook released in 2014 shows that sports betting accounts for about 13% of the gambling revenues. It includes book-making and pari-mutuel wagering on horse racing and other sports events. Online wagering for sports is also allowed, being the only form of online gambling permissible in South Africa. The revenues of sports betting were estimated to be in the region of 3.9 billion rand last year and projected to grow to 4.05 billion rand in 2016.

Africa's winning - image courtesy of www.africanleadership.co.uk

The growth of sports betting in South Africa got a boost from the country hosting major tournaments including the most recent 2010 FIFA World Cup. The country’s participation too in major sporting events in cricket and rugby world cups have helped keep sustained growth over the same period. A mature horse racing segment has also aided expand sports betting.

In West Africa, Nigeria is the most attractive market with its expansive economy and the growing middle class. Sports betting started in earnest in 2007 with the success of the local Nigeria football league. Due to infrastructural challenges, sports betting is still largely offline but fast moving too to the mobile platform. This is supplemented too with the expected growth of online betting as the Nigerian Communications Commission predicts at least over 50 million of its citizenry accessing the Internet.

The Nigerian government has also made the entry fee fairly prohibitive fee of US$ 5,000 for a gambling license. However the use of mobile telcos has made it a potential sector for growth as seen by the number of local and international sports betting companies set up in the last 5 years. These include Stakersden Soccer Jackpot working in partnership with mobile telco Etisalat, NairaBet and Bet9ja.

Indeed Africa remains an attractive haven for sports betting and gaming with 3 conferences planned this year alone on the same, starting with

•     Sports Betting North Africa – 27^th – 29^th January 2016 in Marrakesh, Morocco;
•       Sports Betting East Africa – 16^th- 18^th May , Nairobi, Kenya;
•       Sports Betting West Africa – 18^th- 20^th July , Accra, Ghana;
•       Big Africa Summit – 24^th – 26^th October, Cape Town, South Africa.

To name but a few.

6.       Future of Sports Betting

Indeed sports betting is here to stay in most of the African countries including Kenya. With the sports industry enjoying a modest growth both at local and continental level as well as the availability of mobile and online technologies to leverage global best practices, the trend can only be upwards. There have been fears of alleged criminal links with online sports betting being used for money laundering in other parts of the world, thus African countries will be targets too. The same would go for online fraud as most of the online and mobile platforms are not as secure as would need be.

There are also fears created by the blitz of advertising to the adult population which then makes it attractive to a younger audience. This becomes tricky since there are large number of people under eighteen are being given access to mobile devices by their parents, guardians and friends. It would be interesting what the advertising and marketing regulatory bodies would say to this.

Match-fixing and similar allegations have been made to many an African sports disciplines, all in the name of helping game-fixers win a larger purse. These actions would impact local leagues and games and as such relevant bodies need exercise vigilance to check against match and game-fixing.

On the positive note, the expansion of sports betting has offered opportunities for mobile money, virtual currencies such as bitcoins among tech developers making it attractive for them to develop sturdy solutions. 

Sports betting has also seen job creation through the different channels that the sports betting have sought to spread their products. Beyond the agents and corner shops, one can become an agent just by the mere ownership of a mobile device. This is also an opportunity for sports punters and analysts to reap on helping and placing bets for themselves and their friends, remember Nate Silver?

Sports betting has also given marketing and ad companies opportunities to appeal to the widest of masses as they seek to grow this. Kenya is one example where in the space of 3 years, over 5 sports betting companies have launched and consistently engaged in such services.

On a broader perspective, the contributions from sports lotteries to the national sports fund kitties will help develop sports both a local and national level. It will seek to legalize and mainstream what would otherwise be illegal activities escaping State scrutiny. Kenya and South Africa vibrancy in the same represents a way forward into attracting and growing sports betting. This being another big sporting year, we can only wait to see what opportunities will come and the next milestone in sports betting.