How Africa’s Silicon Savannah Became an Online Vegas

Other companies followed SportPesa’s lead. 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 posted across the country, “good-looking ladies” Offering T-shirts in exchange for sign-ups, unsolicited text messages and Ngare’s own posts on Facebook, Instagram and Twitter, designed to attract followers who could later be converted into customers. There were plenty of opportunities. A 2016 poll at Kenyatta University found that 78% of male and 57% of female students had tried betting, with nearly half gambling at least once a week (and 80% reporting net losses). Subsequent surveys by GeoPoll consistently showed that more than three quarters of young people in Kenya and more than half in Uganda, Tanzania, Ghana, Nigeria and South Africa had enjoyed themselves, most on their phones using mobile money.

When sports betting became entrenched, addiction followed. A 2020 study of Kenyan student gamblers by Ogachi diagnosed nearly seven in ten with gambling disorders. Nelson Bwire, who led the Kenyatta University poll when he was a student, was so alarmed that he founded a non-profit organization, the Gaming Awareness Society of Kenya, which aims to reduce the damage caused by gambling. Bwire has mentored students forced out of school after betting their tuition fees, and workers jailed for squandering their employers’ money.

A habit that is not easy to kick

Some argue that Kenya should completely ban sports betting. There is certainly a precedent: the practice is very limited in many parts of the world, including most of Asia and the Middle East. But those who know the Kenyan sector well say major reforms are unlikely. For starters, betting taxes have become a major source of revenue for Kenya’s ailing government. Many of the country’s leading gambling houses also have close financial ties to politicians or their associates; some believe this could be part of why a 2019 bill calling for a new regulator with stronger teeth failed to gain traction in Kenya’s parliament. And gambling firms have themselves become major sources of employment: Ngare, who has worked for some of them, says he would rather return to journalism, but he also has rent to pay and his parents at home to support.

Still, there are signs that Kenyan authorities have had some success in curbing the sector’s excesses. New taxes on wagers and winnings seem to be pushing some gamblers to cut corners. 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 Betting Control and Licensing Board (BCLB), betting companies can no longer advertise on radio and TV during the day. But the industry still continues. In July 2019, the board refused to renew the licenses of 27 gambling companies, including SportPesa, in a row over paying back taxes. Some returned and new businesses saw an opening. Today, the BCLB lists 99 recognized bookmakers, more than before the crackdown.

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In an interview at the headquarters in Nairobi, BCLB director Peter Mbugi told me that the number of Kenyans gambling and the total bets are lower than in 2019, although he declined to share numbers. Mbugi attributes the decline to stricter regulations and a growing realization that sports betting “isn’t as rosy” as many had thought. But others say a reduction in numbers could be a temporary blow brought on by the 2019 uproar and the pandemic, which strained household finances and disrupted global football competitions for months. Data from Safaricom, which controls more than 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 2021, up from $436 million in the same year. period of 2020 Meanwhile, there are new African markets to explore. Karen Njerenga, who leads 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 gambling companies acquire and retain customers, has described the continent’s “untapped potential” in online gaming as “incredible”.

BRIAN OTIENO

Some hope that the same kinds of technologies that have allowed this industry to thrive can also reduce the damage it can cause. For example, last year Bwire and fellow activist Weldon Koros, together with the British company Gamban, introduced an app that allows addicts to block access to all gambling sites on their devices. Use of the non-removable software has been modest so far, but Bwire says it has helped some people “reduce temptations.” Bwire and Koros have also had some success lobbying universities to block gambling sites on their networks: If students have to pay for data, they think they might be spending less time on their devices. And the men praise Safaricom’s 2021 launch of a “smart mobile payment system” for student loans, which will prevent tuition from being diverted for betting. But Bwire would like the company to do more, including tougher restrictions on text-based advertising and the overdraft facilities that many gamblers use to place bets on credit, in addition to loans from third-party apps. (A spokesperson for Safaricom, which earned $37 million in gambling-related fees in fiscal 2021, did not respond to multiple requests for comment.)

Betting has become such a core part of his identity, Kirwa says, that it’s hard for him to fathom life without it.

New digital products may send some gamblers to alternative crowds. Kevin Kegera, a third-year student at Kenyatta University, says he tried sports betting after high school but gave up after realizing the odds had been manipulated against him. Today, he has switched to trading foreign exchange: FXPesa, an app that allows him to use mobile money, launched in 2019, and others have followed. Many of his friends also use apps to trade foreign exchange, cryptocurrency or foreign stocks – options that were not available even a few years ago. Kegera, who aspires to be “Kenya’s Warren Buffett”, suspects greater exposure of these products will continue to entice some highly educated Kenyans to bet, though probably not the masses. “It’s very hard to convince someone who hasn’t been to college about markets,” he says.

Kirwa is unlikely to kick his habit. One evening in Eldoret, I accompanied him in his red Toyota Vitz, a hatchback he’d fitted with tinted windows and electric-blue interior lighting. The afrobeats blaring from the stereo would have been less tinny if he still had his old sound system, he wailed, but he’d sold it to pay back a loan he’d placed a bet on. Despite Kirwa’s poor track record in the years since his big win, he says he has no intention of stopping. Betting has become such a core part of his identity, he says, that it’s hard for him to fathom life without it. Plus, it’s so convenient. His smartphone and M-Pesa wallet will always be in his pocket – and there’s always a chance that luck will be on his side again.

Jonathan W. Rosen is a writer and journalist who reports from Africa†