Current Affairs

Big time betting comes to Africa

Big time betting comes to Africa
  • PublishedJanuary 30, 2019

While betting on soccer and horse racing has a long tradition in Africa, the modern version using digital platforms and heavy marketing, takes gambling to a new level. What are the consequences for society if what is now considered fun turns into severe addiction? Mushtak Parker discusses

In the first week of November, Kenyan football giants, Gor Mahia played English Premier League’s (EPL) Everton in the SportPesa Trophy final at Goodison Park in Liverpool.

Gor Mahia, as the winner of the SportPesa Super Cup, an annual eight-team knockout tournament featuring four teams each from Kenya and Tanzania, earned the right to play Everton in the SportPesa Trophy. This is an event, which usually coincides with pre-season friendlies involving EPL clubs, but which was rescheduled due to senior management changes at the English club.  

What is revealing is not the fact that a Premier League club should be playing an African one as the ‘prize’ for winning a tournament, but the fact that the organiser of both the SportPesa Trophy and Super Cup is SportPesa, one of the fastest growing online sports betting and gambling platforms with operations in Kenya, Tanzania, South Africa, the Isle of Man and the UK, where it operates in conjunction with TGP Europe. 

In SportPesa’s Tanzania platform, for instance, punters can bet on 10 different sports including Egyptian Second Division, Vietnamese and Turkish Amateur League football matches.

That is not the only connection between Gor Mahia and Everton.  Their shirts are both sponsored by SportPesa, which is also a sponsor partner of Arsenal, one of the most successful clubs in top-flight English football, Southampton, Hull City and the La Liga in Spain.  

In East Africa, SportPesa sponsors the Kenya Premier League and clubs such as Singida United, Young Africans and Simba Sports club.

Bold reverse investment

This bold ‘reverse investment’ initiative by SportPesa through its foray into the European market suggests the arrival and consolidation of ‘Betting without Frontiers,’ concept.

Sports betting and gambling is a multi-billion dollar business and empowered by the Internet, mobile telephony and social media it transcends national boundaries and can reach even the remotest communities.

Sports and betting have been virtually synonymous for centuries. Some events, like horse racing are staged specifically for betting, and gambling on football has a long tradition not only in the UK but across the world.

Betting on English and Scottish football was also a feature in former British colonies with punters predicting draws during the weekend games on cards issued by companies like Littlewoods. Playing ‘the pools’ was a firm favourite across communities, for example, in East and Southern Africa

Punters would mark their choices and, on weekends, would listen carefully to the BBC World Service broadcast for the full results announcements. Winnings were not huge, but could amount to a month’s salary for the lucky winners. Few regarded this as gambling as such.

But the modern version, played on mobile phones is light years ahead of the old system. One can continue betting virtually throughout the match and on all aspects, including the colour of cards issued. Winnings are also instantaneous – as well as losses.

These digital based sports betting firms are now also targeting punters in developing countries including in Africa, Asia and Latin America. This is often in collusion with national sports bodies, clubs, past players and even governments, who relish the tax revenues the gaming industry generates for the Treasury.

In South Africa, the largest single sports betting and gambling market in Africa, according to the National Gaming Board of South Africa (NGB), the total turnover of the gaming industry (casinos, horse racing and sports betting, limited payout machines, bingo) amounted to a staggering R389.8bn ($??) to 31st March 2018. It generated R2.9bn in taxes and levies.

This excludes the lost tax revenues through illegal online and land-based gambling including fafi (street gambling), which according to Bawinile Ngcobo, Senior Enforcement Inspector at the NGB, amounted to “an estimated total loss in GDP of R1.9bn in FY2018.” Sports betting in Britain is a substantial component of the £14bn gambling industry and has become “a hidden epidemic.”

It is now entrenched in Africa, especially South Africa, Kenya and Tanzania, and in Asia, especially China, Singapore, Philippines and India, where criminal betting syndicates are also exploiting the phenomenon to fix matches, by bribing players, referees, officials and even administrators.

Gambling addiction raising concerns

Critics say that the number of football clubs displaying the names of betting firms and online casinos on their jerseys is disturbing, because it normalises gambling, particularly among young people, as supporting your sport or team.

This, coupled with the rising incidence of betting kiosks at football stadia, where punters can place bets egged on by celebrity adverts and marketing innovations has raised concerns in several parliaments.

Recently, a group of cross-party MPs in the UK House of Commons want betting to be treated as a public health issue, with companies forced to drop suggestions that it is “fun” rather than harmful, and gambling ads to be banned during live sporting events because it allows bookmakers to reach young viewers

The UK, says the charity GambleAware has a staggering 430,000 over-16 problem gamblers including 25,000 youngsters under 16 addicted to gambling.

Problem gambling is also on the rise in Africa, albeit data and research is seriously lacking.  The South African Responsible Gambling Foundation (SARGF), which provides free treatment and counselling to those affected by problem gambling, confirms that it has treated more than 18,500 people in the past 18 years.  

The problem is that gambling addiction is wrongly conflated with illegal gambling, just as the gaming industry is seen as a component of economic development through contribution to tax revenues and GDP and job creation.

The theme for Africa’s premier gambling expo, Gambling Indaba: Unlocking Industrial Opportunities in the African Gaming Industry, which was held in Johannesburg in September, was touted by the organiser as part of “transformative economic development solutions in the African continent.”

Regulators such as Dennis Makhari, Compliance Director at NGB, acknowledge that “gambling regulation needs to create a balance between revenue generation and protection of the public, particularly vulnerable persons.”

To advance the quality of regulation of gaming and sports betting, 10 governments comprising South Africa, Botswana, Kenya, Namibia, Swaziland, Tanzania, Mozambique, Malawi, Zimbabwe and Zambia, founded the Gaming Regulators Africa Forum (GRAF) in 2003. 

To GRAF the key challenges of the gambling industry in Africa include lack of uniform standards, deficient regulatory frameworks and lack of enforcement of laws in many jurisdictions..

While many who placed bets on the results of football matches did not see their activity as gambling but as a shrewd ability to read the form of teams, it is clear that the digital revolution has taken betting to a new level.

But what is at issue is whether or not to clamp down on legal betting. Many experts say the gambling is very much part of the human psyche and millions enjoy it. The alternative is illegal gambling, which is far worse. The debate continues. NA

Written By
Mushtak Parker

Mushtak Parker is Editor of Islamic Banker Magazine, one of the foremost journals in the industry with a global circulation in the major Islamic Financial institutions.

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