Regulator fights betting ban outside Nairobi’s five-star hotels

Economy

Regulator fights betting ban outside Nairobi’s five-star hotels


Players track their bets at a betting shop in Nairobi. FILE PHOTO | NMG

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Summary

  • The Betting Control and Licensing Board (BCLB) said it would take legal action if a bill restricting betting and gambling establishments in the city to operating between 8 p.m. and 6 a.m. is passed.
  • The regulator believes City Hall is usurping its role, warning it would set a precedent that could encourage other counties to follow suit.
  • The author of the bill says it will help young people engage in productive work and prevent gambling addiction.

The gaming regulator is stuck in a row with the Nairobi County government over pressure from town hall to restrict gambling to five-star hotels and limit playing hours.

The Betting Control and Licensing Board (BCLB) said it would take legal action if a bill restricting betting and gambling establishments in the city to operating between 8 p.m. and 6 a.m. is passed.

The regulator believes City Hall is usurping its role, warning it would set a precedent that could encourage other counties to follow suit.

The bill’s author says it will help young people engage in productive work and prevent gambling addiction in a market where young people see it as providing gambling enjoyment in addition to an opportunity to earn money fast.

“As BCLB we have made our objections and if they (Nairobi County Government) go ahead with the law then we have the option of seeking the High Court’s interpretation of the opinion of the Gazette. But we don’t want it to come to that,” BCLB chief executive Peter Mbugi said in an interview.

“Gambling is a national problem that cannot be treated differently in different counties.”

The BCLB bases its fight against the bill on the notice published in 2017 which gives the national government the power to establish laws and regulations to govern the betting industry.

The notice says the role of county governments is to issue business licenses to betting companies and undertake compliance checks, including day-to-day monitoring of casinos and live betting shops in their jurisdiction.

The regulator’s position paves the way for a battle between the state and the mayor’s office for control of a sector that generates revenues of more than 200 billion shillings a year.

Mr Mbugi questioned why the Town Hall ignored the regulator’s views on the proposed law given that the council opposed the bill.

Last month, the bill passed second reading in the county assembly, removing the first hurdle to its enactment.

If adopted, it will mark a break with the current situation where players can place bets at any time of the day. The bill aims to push telecom operators to cancel all USSD codes used by radios in their gaming activities

The proposed changes also seek to limit the location of gambling establishments, specifying that such businesses will only be located in five-star hotels rated by the Tourism Regulatory Authority.

This means that the town hall will only issue operating licenses to owners of betting houses, lotteries or games that have complied with the regulations.

Nairobi has a large number of live gambling shops owned by companies such as Betika, Odibets and Mozzartbet, where young people spend hours betting in real time, especially at weekends when major European football leagues are in action.

A breach of the regulations will result in a fine of 5 million shillings or a term of imprisonment not exceeding two years or both.

Gambling companies will have to adopt cashless transactions for betting in the county to prevent minors from engaging in such activities, a move that will likely hit revenue hard.

The premises must be dematerialized within six months of the promulgation of this law.

The bill also prohibits the broadcasting of video or audio programs promoting betting, lotteries and gambling advertisements before peak hours.

The proposed regulations emerge at a time when betting companies licensed to operate in Kenya have reached 100, challenging government policy to crack down on gambling by imposing higher taxes on both businesses and punters.

The list of licensed betting companies for the year ending June published by the BCLB shows the number rose to 100 from 76 in a similar period a year earlier, reflecting a growth of 31.5 %.

Last year, Kenya reintroduced betting excise duty at 7.5%, meaning the government first levies Sh7.50 for every Sh100 a player places as a bet, regardless gains.

It also levies 20% on winnings and levies additional taxes on betting companies in an effort to make gambling unattractive.

But investors in the betting space have not been deterred by government attempts to curb activity through higher taxation and stricter regulation.

Mr Mbugi said the majority of the 24 new businesses are locally owned.

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