After failing to win big on the job market, Kenyan millenials take a gamble on online sports betting

After failing to win big on the job market, Kenyan millenials take a gamble on online sports betting

Yusuf Omanga is one of millions of young Kenyans who places regular bets online.

(Nathan Mabeya)

Yusuf Omanga, 33, has always dreamed of making good money. After finishing university in 2005 he initially planned to be an artist, but after a decade of struggling, he decided it was time to look at other options. Since March last year, the father-of-two has been a full-time online sports better after learning that a close friend had won US$600 by predicting the final score of a football game with a 50 cent bet.

“At first I didn’t win any money so I gave up. But I returned to the game after learning that I just needed time to understand how to place the bets wisely,” says Yusuf.

The first online and mobile sports betting platforms launched in Kenya in 2013. Like most users of the 25 or so online betting companies currently operating in the country, Yusuf places bets on football games in the various top European leagues, although local leagues and lesser-known international leagues are also popular. The trick, he says, is to place as many bets as possible, to bet on small teams that offer better odds and to place bets daily. Winning is not about luck, according to Yusuf. Betting is hard work.

“I only bet on international football and for me to do so I have to watch as many games as possible. I read about their history and follow news about the teams every day,” says Yusuf whose office is anywhere with internet connection as he places bets on both his laptop and on his mobile phone.

“I made US$780 on my first big win after placing a bet of only 50 cents on 12 matches,” he says. Yusuf tells Equal Times that he makes a monthly profit of at least US$200; in a country where the average civil servant earns just US$150, this is a considerable sum of money.

At 17.3 per cent, Kenya has the highest youth unemployment rate in east Africa, according to World Bank figures. Faced with few options in the formal economy, buoyed by a national love for sports and lured by big money prizes, an ever-increasing number of young Kenyans are turning to online sports betting platforms such as SportPesa, Betin, BetYetu, mCHEZA, JustBet and EliteBet as a means of earning a living.

Kenya’s Betting Control and Licensing Board, which regulates all forms of gambling in the country, estimates that at least five million young Kenyans are involved in sports betting. Although other forms of gambling – such as lotteries, slot machines, football pools, traditional betting shops and casinos – are also popular, online sports betting is thought to comprise the biggest share of the country’s multi-million dollar gambling market.

And online sports betting isn’t just popular in Kenya. According to a recent poll conducted across sub-Saharan Africa by the mobile survey company GeoPoll, 54 per cent of millenials (17-35-year-olds) in Uganda, Tanzania, Ghana, Nigeria, South Africa and Kenya have tried gambling. In Kenya, however, 76 per cent of survey respondents admitted to having placing a bet within the past week.

Winning – and earning – a fortune at the tap of a button

Dr Scholastica Odhiambo, an economics lecturer at Maseno University in Kenya, tells Equal Times that the country’s online sports betting industry is booming thanks to the success of mobile money banking applications such M-Pesa, which is owned by Kenya’s largest telecommunications company, Safaricom.

Because sports betting is now possible at the tap of a button and for as little as one Kenyan shilling (less than one cent) on some platforms, this in turn has helped boost transaction volumes for telecommunications companies as well as online betting platforms.

“The ease of placing bets online or through Short Message Service (SMS) and paying via mobile money has also seen the penetration of foreign big betting companies from the Europe into the Kenyan market where the use of credit cards has been low,” says Dr Odhiambo.

According to a 2016 Bloomberg article, through its market leading online sports betting platform SportPesa, Safaricom processes approximately five billion shillings (US$50 million) worth of transactions each day and has as many as 21 million users.

Bloomberg claims that the total amount of money handled by SportPesa – which recently gained international recognition thanks to its sponsorship of the English Premiership football club Hull City – equates to about a third of Kenya’s US$61 billion gross domestic product.

But critics have been urging the government to pull in the reins on the industry’s runaway success. Gambling addiction is a serious concern and, according to some observers, can result in an increase in crime and also the number of people who go bankrupt to fund their habit. There have also been numerous stories of people committing suicide after losing gambling bets: in one case, a student at Kenyatta University hung himself after gambling away his US$800 school fees on a football bet.

Eric Musau, a senior research analyst at the Standard Investment Bank tells Equal Times that the increasingly popular idea that betting can be considered as a reliable source of income is a worrying development. “Betting is giving young people hope for something better regardless of their financial situation, but this can quickly become an addiction which most of the time will destroy a person financially and socially.”

Musau also says that as well as concerns over data privacy, another big challenge facing the regulation of the industry is the lack of audited accounts to check the capacities of betting companies to payout on big wins.

But the sports betting companies argue that they are more a force for good than bad. Ian Mbogo, marketing manager at JustBet, says that sports betting has created thousands of new jobs in the country.

“People are now employed as agents by the sports betting companies and some are employed to run the betting corner shops [usually operated in poor communities where there is no internet connection],” he says, adding that sports betting has also created an opportunity for so-called ‘sports analysts’ to make money on helping others place bets.

According to Ronald Karauri, the CEO of SportPesa, sports betting companies should be credited for making a positive contribution to the Kenyan economy. “Betting companies pay a significant amount of taxes to the government. We also support many local sports clubs and charities, so it is critical for the government to support us,” he tells Equal Times.

The government seems to have other ideas. A major shake-up to the industry was announced this March when the Kenyan government proposed a uniform tax of 50 per cent on all forms of gambling revenue, including sport betting, starting from July. Until that point, betting operators only paid 7.5 per cent tax while lotteries paid 5 per cent, gaming operators paid 12 per cent and competitions paid 15 per cent.

The Treasury Cabinet Secretary Henry Rotich justified the tax in a press statement by stating that gambling has “become widespread in our society in an environment that is inadequately regulated. Its expansion is beginning to have negative social effects particularly on the youths and vulnerable members of our society.”

However, in June, President Kenyatta reduced the tax from 50 per cent to 35 per cent. Rotich has said that the government will funnel the revenues generated by the tax into a new National Sports, Culture and Arts Fund for young Kenyans. But analysts are warning the tax hike will increase the cost of betting for consumers, which will drive more people towards unlicensed betting companies.

But there is at least one gambler who won’t let the tax increase put him off. “My ultimate goal is to win a jackpot of at least US$10, 000, money that can sustain me in future,” says Yusuf. “I won’t stop doing this until I win.”