Online betting: Ghana to introduce new policy to curb revenue leakages

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Ghana is set to introduce a new policy aimed at curbing revenue leakages in online betting.

Speaking on Friday, March 12, 2021, while presenting the 2021 budget statement and economic policy on the floor of Parliament, Ghana’s Minister for Parliamentary Affairs and caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu said gaming has become a major income earner all across the globe and a significant source of Government revenue.

Over GHs 300 million lost annually

He noted that the influx of online betting and automation of the once totally manual process has changed the character of revenue sources from that industry.

According to Mensah-Bonsu, Ghana loses an estimation of over GHs 300 million annually in revenue due to leakages in the sector.

He said the Ministry of Finance and the Ministry for the Interior will work with stakeholders to formulate a comprehensive policy to improve revenue mobilization from online gaming.

“The Ministry of Finance and the Ministry for the Interior will co-supervise the gaming industry and will soon consult with stakeholders to formulate a comprehensive policy to improve revenue mobilization from this source,” said Mr Mensah-Bonsu.

Spike in online gaming

There has been a spike in online gaming in Ghana and on the African continent over the past five years with the number of online gaming companies increasing exponentially.

The operators which number over 19 are licensed by the Gaming Commission of Ghana. They offer services ranging from online sports betting to online casino games on their web-based platforms.

Kenya scraps betting tax

In September 2019, Kenya’s Parliament voted to raise the excise duty on bets, from 10% to 20%. The new tax came on top of an existing 20% tax on individual gamblers’ winnings.

However, the tax was removed in under a year after leading betting operators Sportpesa and Betin closed-down operations in the country.

Kenyan gambling landscape

According to a 2017 PWC report, Kenya is amongst the top three gambling markets in Africa, with the Kenyan gambling industry rapidly becoming a multi-million dollar business.

There are a number of gambling sub-sectors across the country, including lotteries, sports betting and prize competitions, in which there are currently 30 licenced betting firms and casinos across the country.

Sports betting

One of the most prevalent trends for gambling within the country is sports betting, with around 30 sportsbooks licenced to operate in Kenya.

The estimated combined revenue of this sub-sector of gambling is thought to be around $2 million, in which the first sportsbook to enter the market was SportPesa, who received their license in 2013.

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Whilst the first gambling licenses were established in Kenya in 1966, when the Betting Lotteries and Gambling Act outlined regulations and established the Betting Control and Licensing Board, the industry has only really begun to take off on a scale that is relatable to the rest of the world through the use of mobile technology.

Smartphone penetration

With the rapid advancement of mobile technology in Kenya over recent years, almost 100 per cent of the population now have access to a mobile.

This has been a catapult for the gambling industry as smartphones have been a key enabler, allowing for some of these people to start gambling frequently.

Statistics show that 64 per cent of mobile gamblers own a smartphone, compared to 40 per cent who own a standard phone.

Of those who do gamble using their mobile phone, it has been found that 55 per cent of these people gamble more than once a week, showing a growing affinity for the industry.

Male affected

According to GeoPoll statistics, 70 per cent of gamblers are male. This statistic can most likely be linked to the population’s affinity for sports, with many Kenyans being fans of football, and in particular, European Leagues like La Liga and the Premier League.

It is thought that the industries association with football has helped gambling to become a more respected recreational activity within the country.

In addition, a study by GeoPoll has found that of those that gamble in Kenya, 47 per cent are light gamblers who place bets once a month or less and only 10 per cent of gamblers place bets more than once a day.

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The most popular age group to gamble in Kenya is between 25 and 34. Statistics also show that those aged 35 and above are least likely to participate in gambling, with the most popular reason being that they feel a responsibility not to spend their money on gambling.

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