In the year to March, Kenyans spent Sh169.1 billion on betting through Safaricom’s M-Pesa, highlighting the gambling fever that has become a national hobby.
According to the telecoms operator’s declarations, the value of bets increased by 23.8 percent from Sh136 billion a year before, defying a government crackdown on gambling with greater taxes on both firms and bettors.
Safaricom, the Kenya Revenue Authority (KRA), and betting companies are the major winners from the increase in betting activity, pocketing billions of dollars.
Last year, the telco’s betting income increased by 40% to Sh5.98 billion, outperforming more than a third of the Nairobi bourse’s revenues.
This news came on the same day as Safaricom reported a 1.7 percent drop in net profit to Sh67.49 billion, owing to expenditures in Ethiopian operations that have yet to launch and additional tax payments.
Safaricom lost Sh4.8 billion from the Ethiopian firm in which it owns a 55.7 percent ownership, and its tax payments increased by 39.1 percent to Sh34.7 billion when the Covid-19 economic stimulus package lifted tax exemption.
The number of bets funded through M-Pesa accounts increased by 39% to 732.2 million, indicating an increase in gambling addiction.
Despite the government’s efforts to limit the activity through higher taxes and regulations, betting continues to rise.
Betting is popular among young people, both employed and unemployed, who perceive it as a game-like thrill as well as a way to make quick money.
The Sh169.1 billion wagered over the review period is enough to buy 5.3 billion Safaricom shares, or a 13.2 percent ownership in the country’s most lucrative company.
Based on the telco’s most recent distribution of Sh1.39 per share for the year ending March, such a stake would generate annual dividends of nearly Sh7.3 billion.
The Betting and Licensing Control Board (BCLB) published a list of betting enterprises licensed for the year ending June, showing that the number had climbed to 100 from 76 a year earlier, or a 31.5 percent increase.
Kenya reinstated a 7.5 percent excise charge on betting stakes last year, which means the government gets Sh7.50 out of every Sh100 wagered.