17 February 2017

Kenya: No Bet, Gaming Operators Tell Midiwo on New Law

Gaming operators in the country have called on MPs to defer debate on the contentious Betting, Lotteries and Gaming Amendment Bill saying that passage of the proposed law is going to lead to the collapse of the industry.

Association of the Gaming Operators- Kenya (AGOK) Chairman Ronald Karauri said deferment of debate will allow for broad based consultations with relevant stakeholders such as the licensees under the Betting, Lotteries and Gaming Act, the Betting Control and Licensing Board, Kenya Consumer Protection Advisory Committee, the Ministry of Finance and the Attorney General.

"The Bill may cripple the industry, because of the online aspect of the games, for example for the Premier League in Europe, 10 of the 20 teams are sponsored by betting companies, all those betting companies are available on you mobile phones, so what would happen is that we would collapse the industry which is creating employment, paying significant amount in taxes, contributing in many ways to support either sports and charity. So it's critical to ensure we support Kenyans based companies,"

"This will help develop a workable framework to bridge the perceived gap between legislation, regulation and industry realities," Karauri explained.

The proposed law seeks to impose a ban on advertisement of competitions in which prizes are offered in what will force betters to rely on phone applications and betting firms' websites on the bets.

If the Bill is approved by Parliament and assented to by the President, then sports betting firms such as Sportpesa, Betin, Betway, M-cheza among others will be barred from splashing advertisements in print and electronic media ahead of key local and international football matches.

Those who contravene the proposed changes to the law will face fines ranging from Sh1 million and Sh4 million, up from the current Sh3,000 or imprisonment for a term not exceeding three months or both.

The AGOK is also opposed to Minority Deputy Leader Jakoyo Midiwo's proposal seeking to establish an authority to license and regulate the activities of betting, lotteries and gaming firms.

The Kenya Betting Control and Licensing Authority will have the power to regulate and control the operation of betting and gaming and conduct of lotteries and prize competition.

"We note that there is no lacuna in law with respect to a legal framework for regulating and controlling gambling activities in Kenya. We note the regulator proposed by the Bill is a corporate entity as opposed to the Betting Control and Licensing Board which is not," Karauri said.

The gaming operators said that it would be an impossible task to implement the capping of operating hours.

"It is proposed to restrict the operating hours for licensees carrying out betting activity, operating a lottery or prize competition to 7pm and 7am. The Bill further proposes to restrict the operating hours for licensees engaged in gaming activity to between 5pm and 7am. It is our submission that this major policy proposal has not been sufficiently explained nor have reasons been provided for the same," he said.

The gaming operators is also opposed to a new tax proposed in the Bill, called 'Winning Tax' which is to be charged at the rate of 20 percent of a person's winnings from gaming, betting or participating in a lottery or prize competition authorized under the current Act.

"There is a misconception that we do not pay taxes but we have been paying corporate tax among other taxes. We are saying, we are overburdened with tax, that when you look at the revenue you will get at the end of the day, you might not be able to recover your costs."

"We note that there has been until recently a 'withholding tax' on the winnings from betting, gaming activities and lottery participation. This tax measure had to be withdrawn due to its challenges in implementation and the inordinate cost of its collection. Circumstances have not changed and thus it is equally untenable and impractical to efficiency collect the intended 'Winning Tax'" Karauri told the MPs.

Meanwhile, the House began debate on the Bill sponsored by Midiwo despite attempts by members of the Labour and Social Welfare Committee requesting House Speaker Justin Muturi to postpone debate for at least two weeks.

Committee chairman David Were (Matungu) explained that he needs more time to collect views of four stakeholders groups including the Kenya Revenue Authority Director-General John Njaraini and National Treasury Cabinet Secretary Henry Rotich and his Principal Secretary Kamau Thugge.

Njiraini, Rotich and Thugge are slated before the Committee on Tuesday.

The Committee and other stakeholders will then to attend a retreat organised by the Ministry of Interior and Co-ordination of National Government.


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