How Africa’s Silicon Savannah became an online Vegas

Other companies followed the example of SportPesa. Hempstone Ngare, a former radio reporter hired in 2017 to manage social media for one of the company’s competitors, recalls a period of particularly aggressive marketing: billboards put up across the country, “pretty ladies” offering T-shirts in return. of signatures. ups, unsolicited text messages, and Ngare’s own posts on Facebook, Instagram, and Twitter, designed to attract followers who could later become customers. Opportunity abounded. A 2016 survey at Kenyatta University found that 78% of male students and 57% of female students had tried gambling, with almost half gambling at least once a week (with 80% reporting net losses). Subsequent GeoPoll surveys consistently found that more than three-quarters of young people in Kenya and more than half in Uganda, Tanzania, Ghana, Nigeria and South Africa had indulged, most of them on their phones with the help of mobile money.

In 2018, Kenyans were spending $1.3 billion a year to place bets on the SportPesa platform.

As sports betting took hold, addiction followed. A 2020 study of Kenyan student gamblers by Ogachi diagnosed nearly seven in 10 with gambling disorders. Nelson Bwire, who led the Kenyatta University survey as a student, was so alarmed that he founded a non-profit organization, the Gaming Awareness Society of Kenya, which seeks to reduce the harm of gaming. Bwire has counseled students who have been forced to drop out of school after gambling their tuition and workers who have been jailed for wasting their employers’ money.

A habit that is not easy to break.

Some argue that Kenya should ban sports betting altogether. There is certainly precedent: the practice is highly restricted in many parts of the world, including most of Asia and the Middle East. However, those who know the Kenyan sector well say drastic reforms are unlikely. For one thing, gambling taxes have become a major source of revenue for the cash-strapped Kenyan government. Many of the country’s leading bookmakers also have close financial ties to politicians or their associates; some believe that could be part of the reason why a 2019 bill calling for a new regulator with stronger teeth failed to gain traction in Kenya’s parliament. And the betting companies themselves have become major employers: Ngare, who has worked for several of them, says he would prefer to go back to journalism, but he also has to pay rent and have parents at home to support.

Still, there are signs that Kenyan authorities have had some success in reining in the industry’s excesses. New taxes on betting and winnings appear to have incentivized some punters to cut back. A law passed last December gives the Central Bank new powers to regulate digital lenders. And thanks to restrictions put in place by the country’s Gambling Control and Licensing Board (BCLB), gambling companies can no longer advertise on radio and television during the day. But the industry keeps moving forward. In July 2019, the board refused to renew the licenses of 27 betting companies, including SportPesa, followed by payment of back taxes. Some returned and new companies saw an opportunity. Today, the BCLB lists 99 licensed bookmakers, more than before the crackdown.

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In an interview at its Nairobi headquarters, BCLB director Peter Mbugi told me that the number of Kenyans gambling and the total volumes wagered are lower today than in 2019, although he declined to share figures. Mbugi attributes the drop to tighter regulations and a growing awareness that sports betting is “not as optimistic” as many thought. But others say a reduction in numbers could be a temporary blip caused by the 2019 reorganization and the pandemic, which has strained household finances and disrupted world soccer leagues for months. Data from Safaricom, which controls over 99% of Kenya’s mobile money market, shows that M-Pesa users’ transactions with gambling sites were worth $737 million in the six months ending September 2019. 2021, up from $436 million in the same period in 2020 Meanwhile, there are new African markets to explore. Karen Njerenga, who heads marketing in Kenya for Betway, a global company with operations in seven African countries, says the company has its sights set on several others. Chalkline Sports, which helps betting companies acquire and retain customers, described the continent’s “untapped potential” in online gaming as “incredible”.

Nelson Bwire (seated) and fellow activist Weldon Koros (standing) have teamed up with UK company Gamban to introduce an app that allows addicts to block gambling sites on their device.

BRIAN OTIENO

Some are hoping that the same kinds of technologies that allowed this industry to thrive can also mitigate the damage it can cause. Last year, for example, Bwire and fellow activist Weldon Koros teamed up with UK-based Gamban to introduce an app that allows addicts to block access to all gambling sites on their devices. Uptake of the software, which cannot be uninstalled, has been modest so far, but Bwire says it has helped some people “reduce temptations.” Bwire and Koros have also had some success in pressuring universities to block gambling sites on their networks: if students have to pay for data, it is thought, they might spend less time on their devices. And the men praise Safaricom’s 2021 launch of a “smart mobile payment system” for student loans, which prevents tuition fees from being diverted to gambling. But Bwire would like to see the company do more, including imposing tighter restrictions on text-based advertising and overdraft facilities that many bettors use to place bets on credit, as well as loans from third-party apps. (A spokesperson for Safaricom, which earned $37 million from gambling-related fees in fiscal 2021, did not respond to multiple requests for comment.)

Gambling has become so fundamental to his identity, Kirwa says, that it’s hard for him to comprehend life without it.

New digital products could sway some punters towards alternative hustle and bustle. Kevin Kegera, a junior at Kenyatta University, says he tried sports betting after high school but gave up after realizing the odds were stacked against him. These days, he moved on to forex trading: FXPesa, an app that lets you use mobile money to do so, launched in 2019, and others have followed. Many of his friends also use apps to trade foreign currencies, cryptocurrencies or foreign stocks, options that weren’t available a few years ago. Kegera, which aspires to be the “Warren Buffett of Kenya,” suspects that increased awareness of these products will continue to attract some educated Kenyans from gambling, though probably not the masses. “It’s very difficult to convince someone who hasn’t gone to college about the markets,” he says.

Kirwa, for her part, is unlikely to kick her habit. One afternoon in Eldoret, I met him in his red Toyota Vitz, a hatchback that he had fitted with tinted windows and electric blue interior lighting. The stereo’s blaring Afrobeats would have been less tinny if he still had his old sound system, he lamented, but he sold it to pay off a loan he used to make a bet. Despite Kirwa’s poor record in the years since his big win, he says he has no plans to quit. Gambling has become so central to his identity, he says, that it’s hard for him to understand life without it. Also, it is very convenient. His smartphone and his M-Pesa wallet will always be there in his pocket, and there is always a chance that luck will be on his side again.

Jonathan W. Rosen is a writer and journalist reporting from Africa..

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