A look at Kenya's gambling market

Kenya has emerged as a significant player in the gambling market in sub-Saharan Africa, following South Africa and Nigeria. The government of Kenya has taken steps to protect its citizens from the negative social impacts of gambling by imposing heavy taxes on the industry. Toddy Thairu, a director and lead consultant at Astute Consulting, shed light on the challenges and trends shaping the industry in a recent interview with CNBC Africa. The betting industry in Kenya is relatively young, with sports betting and online gaming being around for just over a decade. However, in the past few years, the sector has faced intense scrutiny, especially regarding taxation. The government's strategy has been to address the issue through fiscal measures, leading to the introduction of several taxes. Thairu highlighted a period when a major player in the market, commanding a 60% share, had confrontations with the government, resulting in a significant setback for the industry. Despite these challenges, the sector is gradually recovering, with the return of sports betting and efforts to regain lost ground. However, the industry is facing new challenges due to proposed tax increases and the introduction of additional levies in the recent budget. The persistent tax changes pose a threat to the stability and growth of the gambling market in Kenya. The industry was estimated to be worth around $40 million a couple of years ago, and the figures have likely grown slightly since then. The increasing penetration of smartphones and the widespread usage of mobile money services have transformed the betting landscape in Kenya. Technological advancements have significantly enhanced accessibility, allowing people across the country, even in rural areas, to participate in betting activities. The availability of fast internet speeds and mobile money platforms like Safaricom's M-Pesa have facilitated easy transactions and betting opportunities for users. The youth demographic in Kenya plays a crucial role in the industry's growth, with young people being the primary customers due to their access to technology and the allure of quick wealth in the face of high poverty and unemployment rates. Thairu expressed skepticism about the effectiveness of heavy taxation as a solution to address the social issues associated with gambling. He advocated for social solutions to tackle problems such as gambling addiction, citing examples from developed countries where regulations on advertising and contributions to support services for addicts have been successful. Thairu emphasized the need for a strategic shift towards social interventions to address the root causes of gambling-related problems. Looking ahead, key trends that will shape the sector include continued technological advancements, with betting companies focusing on innovative ways to attract new customers. The development of user-friendly apps and plans to offer offline access to betting platforms highlight the industry's commitment to embracing digital transformation to drive growth and engagement.