Faster Internet and Mobile Payments May Push Casino Industry in Kenya

More countries around the world are turning to the casino and gaming industry to help bolster their economies, fueling the growing popularity of sports betting, online casino games, and mobile gambling. The internet has helped make gambling more accessible, but taking games mobile has changed the way people play altogether. Now, cellphones and e-commerce options are giving players access like never before, especially in countries like Kenya. 

Digital Change

Sub-Saharan Africa’s third-largest casino industry operates within the borders of Kenya, a country that is quickly prioritizing digital technology as a national economic resource. Internet penetration is continuously rising, with more and more rural Kenyans using cellphones to access the internet. In 2019, a whopping 88% of bettors in Kenya report using a mobile phone to place sports bets with online bookmakers. Cell Phones have also encouraged a boom in mobile money markets, spurred by the need for a banking system that could mitigate the isolation of rural living. 

Cellphone Banking

Mobile money accounts function similarly to an ATM, allowing users to deposit or withdraw cash with an agent using their cellphones. This style of cellphone banking doesn’t require access to a bank or a bank account, however, something that can be hard to come by for some living in Kenya. Nearly 72% of people in Kenya have a mobile money account and families that live closer to mobile money agents are less likely to live in poverty. 

Expansion of cellphone banking services means that more people can make deposits, saving money for the future, and get transfers and withdrawals when they need to instead of waiting the hours or days it may take to reach a brick-and-mortar bank. This is good news for the economy, which has seen positive growth since the spread of mobile money accounts. 

A Mobile Bridge

Part of the great success behind mobile money accounts in Kenya is M-PESA, a mobile payment service that facilitates this kind of cellphone banking. M-PESA was developed by a phone company, taking the already existing method of selling and transferring phone minutes many of Kenya’s residents were using as a banking system to create a text-based system.

Many businesses that already sold phone minutes easily switched to M-PESA and, while intended to repay small loans, Kenyans once again improvised and began to use M-PESA as a banking service. M-PESA now works as a way for Kenyans to bridge the poverty gap, giving households a safer way to send money home, save money, and avoid transfer and postal fees.

Payment Amendments

Previously, operators were barred from accepting mobile money account payments, but this year the Kenyan government revised the 2019 Gaming Bill to allow mobile payments. Since mobile payment services like M-Pesa function as an e-wallet and most Kenyans use mobile money accounts to process payments, it is now easier than ever to place wagers to bookmakers online.

The Kenya National Assembly’s Sports, Culture and Tourism Committee also changed the minimum betting amount from KSh50 to KSh100, a 100% increase. The adjustment is meant to discourage gambling in general, since the majority of betting is done by a younger demographic who are more likely to bet smaller amounts with more frequency. 

Good Intentions, Bad Results?

Concerns about the gambling industry and how it may be fueling a generation of “problem gamblers” in Kenya have been increasing among wary advocates and legislators for some time. While the economic status of lower-income Kenyans is improving because of mobile money account options, poverty is still a national issue. A number of the youth who participate in betting are problem gamblers – those who have an urge to gamble despite the negative consequences or harm they face. They gamble with the motivation to get rich quick or make their fortune, not for entertainment. 

Because of the lack of strict online regulation, there are off-shore operators with and without licenses that are popular among gamblers. Revenue that these operators make in Kenya doesn’t circulate back into the economy, potentially worsening the situation. 

A Source of Recourse

The Kenyan government has tried a variety of tactics to put off potential punters, including a 20% tax on sports betting winnings and, most recently, the 100% increase on bet minimums. But the problem of problem gamblers persists. They have yet to instate a more widespread solution, and although replacing the sports betting industry with a national lottery has been suggested, there’s no word on whether such a measure will be considered.

With the reintroduction of SportPesa and the recent announcement of the Bet High Kenya Ltd. sports betting brand with Betsafe in Kenya, the Kenyan gambling market is probably not disappearing any time soon. However, government officials, advocates, and casino operators will need to find a delicate balance in a historically tense industry if they want to move forward with everyone’s interests represented.

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