Licensing glitch locks out 24 betting firms – Business Daily
Betting Control and Licensing Board Chief Executive Officer (CEO) Peter Mbugi. PHOTO | JEFF ANGOTE | NMG
Some 24 betting firms have been locked out of operations in the current year ending next June for failing to pay a licence fee of Sh100,000 and provide a bank guarantee.
Betting Control and Licensing Board (BCLB) Chief executive Peter Mbugi said on Thursday out of 59 firms cleared to operate, only 35 have paid the fee and provided a Sh250,000 bank guarantee.
Failure to pay for the fee and provide the bank guarantee points to the waning returns from an industry that is currently dominated by a few firms, making the venture zero-sum for the majority of the betting companies.
“We have licensed 35 firms as of today, we had 59 applications but the rest are yet to pay for the licence and provide the bank guarantee,” Mr Mbugi said.
“Licensed operators are increasing but most of them are doing zero-sum business. The market is no longer expanding.”
Some of the firms that have been licensed to operate in the year to next June include Betika, Sportika, Dafabet, Betafriq and Bangbet.
The number of betting firms has been on the rise, defying government clampdown in the form of increased taxation and tighter regulation.
Some 118 firms were licensed to operate in the year that ended last June from 100 in January even as the average amount spent by punters continues to decline in the wake of the increased taxes.
The average amount spent to bet per punter declined to Sh939 last year from Sh2,559 in 2019 while the percentage of gamblers who rely on betting to pay daily bills fell by half to 11.2 percent in the period under review.
Gaming is popular among the youth with some funding their betting addiction through digital loans. The jobless have also turned to the craze in the hope of financial returns.
The government re-introduced a 7.5 percent tax on betting stakes in a bid to make the venture less attractive.
The tax is in addition to the 20 percent charged on every winning bet that betting firms withhold on behalf of the Kenya Revenue Authority.
Betting firms are taxed on the gross gaming revenue— turnover minus winnings paid out— at a rate of 15 percent. They also pay corporate tax on profits at a rate of 30 percent.
The firms are also required to get clearance from the Financial Reporting Centre before being licensed to operate.