Kenyan 'Clean-Up' Leaves Top Firms Locked
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igt179-p01-front_09/10 05/08/2019 16:25 Page 1 News and analysis for the igaming and sportsbetting industry iIncorporatingG amingBetting Business TIMES Emirat and the Mike Tyson Valentyn Kyrylenko importance of talks about Putting customer trust in the his match up support at the forefront 26 insurance game 37 with Parimatch People 22 £5.20 (€8.30) • ISSUE 179 • AUGUST 2019 • www.igamingtimes.com series of escalat- would affect 12 million cus- ing enforcement tomers. Yet days later Sport- measures from pesa and Betin announced Athe Kenyan gov- their payments had indeed ernment through- been cut off. Safaricom is out July has left many of the now referring customers’ country’s biggest betting complaints to their betting firms locked out of the provider. market. Various legal challenges Having warned in April have ensued, with firms dis- that it would turn the market puting that taxes were out- “upside down,” suspen- standing. Although justices sions, payment blocking have thus far refused to stay measures and even deporta- the orders. And the govern- tions have now all been ment simply escalated its issued, until “rogue” opera- resolve a week later, order- tors get compliant and pay ing the deportation of 17 for- their taxes. eign directors of betting The shock treatment firms. began in early July when 27 At the time of writing the companies were ordered to BCLB has confirmed that 10 immediately cease opera- of the 27 firms have now had tions. The Betting Control & their licences renewed, Licensing Board (BCLB) including Betway, OdiBets, later instructed the national Mozzartbet, Eastleigh bet, banks to freeze assets of Lucky to you, Kenbook firms’ corporate accounts to makers, Bet boss, Kick off, prevent capital flight – and Kenyan ‘clean-up’ Easi bet and Palms bet. for telecoms companies to The government appears suspend gambling pay- to want the betting sector to ments, and give their cus- survive – although the future tomers ”48 hours to clear all leaves top firms of Kenya’s largest firms, betting accounts”. Sportpesa and Betin, Ten licences of mostly remains unclear. smaller firms have since Sportpesa maintains it been renewed, but two of locked out will not pay the Sh$3bn the the biggest players, Sport- tax authority is asking for, pesa and Betin – along with but said it “wishes to refute 15 other operators – are still KENYA MARKETS claims that our business is unable to take bets. closing down. The BCLB claims betting “We are in discussions firms made a collective In blocking vital M-Pesa and SMS payments, theKenyan government has with the government and rel- Sh204bn ($2bn) last year – cut the country’s largest operators off from millions of customers - proving evant stakeholders and are yet only paid Sh4bn ($39m) positive that we will be back in taxes. It gave operators that it can and will turn the market “upside down” until they get compliant. to full operation soon.” until 1 July to pay backdated duties, or would not have license to any investor,” a down is apparently being while half a million have majority of Kenyan bets their licences renewed. defiant Fred Matiang’i, Inte- driven by concerns over been blacklisted by lenders through its ubiquitous Sportpesa, Betin and rior Cabinet Secretary, told problem gambling among because they borrowed to mobile money system, M- Betway – who together are local media. the country’s youth – an epi- bet and failed to pay back." Pesa (see chart) – was said to account for 85 per- “Our decision is going to demic, the government says, “This cleanup has just ordered to close all mobile cent of the market – were all shake the sector for sure, that has been encouraged started and we will carry it wallets and “paybill num- accused of undercutting the but we have reached a point the “rogue behavior” of gam- through no matter what it bers” for gambling tax man and ordered to close where we have to save our bling firms. takes,” he added. providers. operations immediately. country.” Matiang’i claimed 76 per- Crucially, Kenya’s top Safaricom initially urged “There is no law that com- Along with accusations cent of youth gamble – “the mobile telecom firm, Safari- the government to recon- pels a government to issue a on unpaid taxes, the clamp- highest figure in Africa, com – which processes the sider the move, saying it igt179-p02-04-world_09/10 01/08/2019 12:37 Page 1 News Nasdaq, Running with the pack Football Index to trade ‘shares’ in sports players US SPORTS BETTING he Nasdaq exchange CEO of the UK betting plat- group has teamed up form. “When the whistle Twith Football Index to blows it’s all over. We are offer arm-chair investors changing that to introduce the chance to trade shares a real market where before in football players. there was only a ‘bet’. Our The platform will mimic traders have a long term Nasdaq’s stock exchange - involvement with us and prices rise and fall based their ‘assets’.” on demand - except rather Cole said the vision was than buying and selling to create recreational mar- stock in companies, con- kets that “sit alongside” sumers can trade shares in financial markets, Top Five pledge football players based on “It makes vastly more their performance over a sense for the majority of three-year period. retail customers to trade “Football Index will use something they under- poses big challenge our matching engine tech- stand like footballers rather nology to provide their than forex, about which clients with a platform to they know much less. We revolutionize how fixed- are creating an alternative for small firms odds betting operates,” asset class for ordinary said Paul McKeown, people.” Nasdaq’s senior vice presi- The Index includes the UK MARKETS dent and head of market- full functionality of an ritain’s top five operators ment and collaboration.” place operators and new exchange, with buy and sell have significantly raised the “Our hope is that this begins a new era markets. limit order books and a full The Big Five’s stakes on charity contribu- of cooperation within the industry and The deal represents view of the depth of market. pledge to raise their Btions - while turning the chal- between the industry and experts, chari- Nasdaq’s debut into the “Nasdaq has extraordi- lenge on their smaller ties, government and the regulator to gambling industry, but is nary experience in order contributions for competitors to keep up. promote safer gambling and minimise part of a wider push to matching, which is new to the treatment of After discussions with the Depart- the risks,” he added. diversify into other markets us,” Cole added. “Their ment for Culture Media and Sports, However this overt splurge of gen- beyond company stocks. experience in the sector problem gambling William Hill, Bet365 GVC, SkyBet and erosity comes not only with the hope of “Betting is about fixtures and purpose-built technol- could be enough to Flutter - which together account for preventing worse regulatory action in and binary outcomes,” said ogy is invaluable to us real- around half of all commercial gambling the future, but a more covert challenge Adam Cole, founder and ising our goals.” prevent more in Britain - announced a ten-fold increase for the UK’s smaller operators. tightening down the their voluntary contributions towards Speaking at the time of the announce- support and treatment, to one percent of ment, William Hill’s chief executive, line - but according revenues, by 2023. Philip Bowcock, warned of over-regulat- to the industry’s That alone would amount to around ing. The gambling market is an “ecosys- £60m a year. The five have also pledged tem” he said, and the “worst thing that leading to spend another £100m collectively, can possibly happen is that we have an consultants, the over that period, specifically on treat- over regulated industry and that sends writing is on the ment. people into the black market.” Peter Jackson, CEO of Flutter (the According to David Clifton, director wall for the Britain’s recently rebranded parent to Paddy at Clifton Davies consultancy firm, oper- smaller firms. Power and Betfair) described the pledge ators are keen to avoid the myriad threats as “an unprecedented level of commit- of marketing restrictions, ad bans and inBRIEF JULY:IN FIGURES they reckon that’ll mean when the UK High Street The huge shortfall on the splurge swallowed up around 10,000 staff will be has many empty shops, second quarter is partly nearly a third of the group’s 1,600 UK SHOPS affected. Both have not just betting shops.” due to its comparison with revenues (29 percent) in CLOSURES pledged measures to last year’s World Cup, but Q2. Earnings fell by a redeploy staff in other KINDRED POSTS 50 according to Kindred CEO commensurate 27 percent, 1,600: the number of areas and support those it PERCENT Q2 LOSS Henrik Tjarnstrom, the to £32m. Nevertheless betting shops slated for can’t in other ways - but £9.2m loss was mostly Kindred said the “focus on The 50 percent profit loss closures in Britain over the there’s no disputing that down to “significant short- growth in locally licensed posted by Kindred is next two years - and that’s the layoffs and closures term margin pressure” indicative of the cost of just among the markets will cause significant bookmakers were bluffing” from higher taxes, and new transitioning from a grey to two largest retail economic damage to the when they warned of marketing costs in its white market. Tell that to bookmakers. William Hill country. As Lorien Pilling extent of shop closures.