The Central Bank of Kenya (CBK) has stopped its provision of banking services to the bookmakers and lottery operators that have not yet complied with state regulations on the renewal of operating licenses.
According to a statement released by the CBK, the decision by the government to halt the banking services came about after the Betting Control and Licensing Board (BCLB) failed to renew the operating licences of several betting firms in Kenya for the period July 1, 2019, to July 1, 2020.
This directive comes just a week after the national government ordered telecommunication companies to shut down the paybill numbers and short codes of 27 betting firms that have yet to renew their licences, not even sparing giants such as SportPesa, Betin Kenya, Betway and 1XBet in a move that has brought the multibillion-shilling industry to a standstill.
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Sending and depositing money in Kenya is as easy as sending a text message, as it neither requires an internet connection nor a credit card. It is therefore no surprise that the country’s gambling industry is extensively dependent on mobile money transactions, thanks to mobile payment services such as M-PESA and Airtel Money.
Your mobile phone is practically your wallet in Kenya, and all you need to do is load money into the virtual wallets which are operated by the telco companies. Money won is similarly collected through the same wallets, save for special cases where the amount won is too big and as such has to be issued via cheques.
Suspending the paybill numbers and short codes has thus affected at least 12 million gamblers who have wallets with the betting firms. The operators, however, still continue to plead their innocence, refuting any claims of noncompliance.
Earlier in the week, SportPesa published an advert on a full page of a local newspaper, providing the public with insights into its finances and tax records. The betting firm was also quick to refute claims of harbouring underage gamblers on its sites.
Nanovas International, trading as betPawa, moved to sue the Betting Control and Licensing Board for failing to renew the company’s bookmaker and public gaming licences for the year 2019/2020.
Meanwhile, the High Court of Kenya has taken no action over the government’s decision to cancel betting licenses, pending responses by other parties.
As though suspending licences wasn’t enough, the Kenyan authorities further clamped down on betting firms by deporting 17 foreigners this week on the grounds of undertaking illegal gambling business.
Interior Cabinet Secretary Dr. Fred Matiang’i personally signed the deportation orders for the 17 executives and directors, a number of whom are from Eastern Europe, for violating the terms of their local work permits. Most of those deported were also accused of conducting irregular gambling activities in the country.
These radical measures are part of a broader campaign to combat the rampant betting culture among the Kenyan youth, despite the massive revenue it generates annually.
In September last year, President Uhuru Kenyatta of Kenya signed the Finance Bill 2018 into law, thereby imposing a 35 per cent tax on betting, with 20 per cent being levied on winnings and the remaining 15 per cent settled by the betting firms.