Kenya continues to suffer from the adverse social and economic effects of gambling despite the recent efforts by the government to tame the problem. The Kenya Gambling Control Bill 2023 is among the many regulatory attempts to control the gambling maze. However, resolving the menace related to gambling requires a radical solution: a total ban on all gambling activities.
Gambling- the Core Problem
In recent years, Kenya has seen a significant rise in gambling, especially among the youth. In a survey by Geopoll in March 2024, 82.81% of Kenyans reported having placed bets. In terms of gambling frequency, 15.61% of respondents bet several times a day while 30.85% place bets once a month.
The enormous size of Kenya’s gambling craze is demonstrated by the tax figures by the Kenya Revenue Authority. In 2022/2023 year, betting companies paid a total betting duty of Kshs 6.64 billion. Based on this figure, betting companies made over Kshs 66.5 billion in the same year.
And, of course, the actual figure would be far much higher than the reported figures due to underreporting. In 2019, before the introduction of taxes on betting, KRA data revealed that Kenyan punters spent over Kshs 360 billion on betting annually.
The highly addictive behavior continues to grow thanks to a widespread internet connection that gives people access to online betting. Mobile money platforms facilitate the vise by easing the payment process. And the onslaught of poorly regulated lending apps means Kenyans can indulge in betting even when their pockets are empty.
Some local TV stations and radios participate the gambling craze, appealing to vulnerable Kenyas to pay cash to “peperusha ndege” or hit jackpots.
Social and Economic Costs
There is no doubt gambling has resulted in severe social and economic costs to individuals and families. In Kenya, gambling has left a trail of broken families. Many of the unemployed or underemployed, especially young people, often fall into the narrative that they can make a fortune from gambling. However, that belief is incorrect. The odds always favor the betting companies.
As punters pursue to recover their losses, they end up in debt and unable to pay bills. In the case of compulsive gambling, the gambler may resort to selling property or spending money on bills. The adverse consequences of the gamblers’ actions are felt by children and significant others. Many families break up as gamblers get frustrated and depressed.
The adverse effects of gambling also spill over into the workplace. Individuals who engage in compulsive gambling are more likely to experience problems at work including low morale and reduced productivity.
Impact on the National Economy
The impact of the gambling craze on the Kenyan economy is one of the most overlooked aspects of the issue. Typically, betting companies mop up money from the economy without any meaningful contribution to the country’s real gross domestic production.
Curiously, most betting companies in Kenya are incorporated in foreign countries like Isle of Man. There is a possibility that the substantial profits betting companies make are invested in other countries. Between 2018 and 2023, Kenya gamblers staked a total of Kshs 620.97 billion bets as reported by the Business Daily on November 28, 2023. The figures could exceed Kshs 1 trillion because of revenue under-declaration. Thus, part of the enormous debt the country accumulated over the past decade could be in the hands of betting companies.
Effects
The mopping up of money has multiple effects on the Kenyan economy. First, the economy is denied money used in betting. For instance, when a person stakes Kshs 500 and loses, the money is removed from the economy. If the person had engaged in economic activities instead of gambling, the money would have been used to purchase food products in the local market, thus contributing to economic growth. Second, the unfortunate scenario results in widespread unemployment, particularly among young people. The high unemployment and reduced money supply contribute to low tax revenues.
Third, the scenario has also contributed significantly to the current debt crisis in the country. The government typically borrows to provide public services, spend more on projects, and alleviate unemployment to some extent. However, much of the funds spent on projects as salaries to workers fall into the hands of betting companies. That means the underlying problems like unemployment persist. The government has to take more loans to launch additional projects. And the most obvious source of government loans are treasuries sold to a few banks holding massive deposits belonging to betting companies or other entities involved in the gambling craze.
The government recently launched Climate WorX Mtaani aimed at creating jobs for over 200,000 youth. However, unfortunately, much of the funds allocated to the initiatives may fall into the hands of betting companies and other entities involved in the gambling craze.
Effects on microenterpreneurs
Furthermore, gambling has adversely affected microentrepreneurs who play a vital role in creating jobs in the country. The use of business resources to gamble leads to family feuds and subsequent closure of businesses. Many microentrepreneurs also have to compete with gamblers in the loan market potentially driving the interest rates up. Thus, gambling indirectly causes the closure of microenterprises which could have created job opportunities for our young people.
Read More: 10 Major Financial Consequences of Gambling
Mental health
Compulsive gambling inflicts significant harm on the gamblers’ mental health. Gambling becomes compulsive when the punter develops the uncontrollable urge to risk things of value, including money or property, to get something of greater value or recover earlier losses. According to the Mayo Clinic, individuals with compulsive gambling often develop other mental health issues such as personability disorder, anxiety, depression, bipolar disorder, attentional-deficit/hyperactivity disorder (ADHD), obsessive-compulsive disorder, and substance abuse. The cases of suicide and suicide attempts reported in the country are long-term consequences of compulsive gambling. Treating compulsive gambling and related mental health issues places a huge burden on the government health expenditure.
Conclusion
The government must ban gambling in the country in order to protect the future of our young people. While the betting industry contributes taxes to the government, these revenues are insignificant in light of the adverse effect of gambling on individuals, families, businesses, and Kenya’s economy. Community and religious leaders should advocate for the end of this menace. The move could propel our economy to greater heights and make a significant contribution to the journey of turning Kenya into the next Singapore Africa. We must take a cue from other economic giants like Japan, China, Singapore, and Israel, which have long since prohibited gambling
