The Sh169.1 billion wager
In the year leading to March, Kenyans spent Sh169.1 billion on bets via Safaricom’s M-Pesa, highlighting the gambling fever that has become a national habit.
According to the telecom operator’s declarations, the value of bets increased 23.8 percent from Sh136 billion a year ago, defying a government crackdown on gambling by imposing taxes on both firms and punters.
Safaricom, the Kenya Revenue Authority (KRA), and betting companies have reaped the most benefits from the high betting activity, pocketing billions of dollars.
Last year, the telco’s betting revenue increased by 40% to Sh5.98 billion, outpacing the sales of more than a third of the Nairobi market companies. This report has come barely a week after Safaricom posted a net loss owed to their subsidiary in Ethiopia.
In a saturated market, the corporation counts on commercial lines such as data and M-Pesa to offset stagnant income from mobile calls. Despite the government’s efforts to limit the practice through increased taxes and stricter controls, betting continues to rise.
The number of wagers funded by M-Pesa accounts increased by 39% to 732.2 million, indicating a rising gambling addiction.
Gambling is ripping massive blackholes in the pockets of young people. Occasionally some punters roll over high odds and win big. However, according to the data, it seems that more people lose. The reason behind this craze is that gambling provides instant gratification. Sh169 billion is a lot of money. If you were to spend more than Sh100 thousand a day, you would still need more than two millennia to deplete your reserves.
Statistics reveal that 54% of gamblers are low-income earners in the country.
After business-to-consumer (B2C) sales of Sh11.4 billion in the year to March, betting is now the second-largest revenue-generating business line under M-Pesa’s payments.
According to the reports, Safaricom charges some of the highest fees to betting operators and punters compared to other M-Pesa customers.
However, Safaricom, received only 0.25 percent, or Sh11.49 billion, of the Sh4.7 trillion in corporate payments to customers using M-Pesa.
The Betting and Licensing Control Board (BCLB) realized the trend and have implemented various taxes to help curb gambling. These taxes aim to make gambling an unappealing endeavor, but the recent spike of gambling houses shows that the problem is not going away anytime soon.
The BCLB re-imposed the 7.5 percent tax on stakes. This tax does not rely on winnings because KRA derives the tax from the gamblers’ wager. Punters who are lucky enough to win are not spared from the taxman either. The government taxes an additional 20 percent when the person wins. Gamblers have remained unmoved by the taxes and regulations by the government as the number of bets increases every day.