Kenyans spent Sh83.2 billion to place bets in the six months to September through Safaricom’s M-Pesa platform alone, underlining the gambling craze that has become a national pastime.
The telco’s disclosures show that the value of the bets jumped 69 percent from Sh49.2 billion a year earlier.
Safaricom, the Kenya Revenue Authority (KRA) and betting firms are the biggest beneficiaries of the growth and intensity of betting activities, pocketing billions.
The telco’s revenue from betting doubled to Sh2.95 billion from Sh1.48 billion. The taxman is estimated to have collected at least Sh6.2 billion from punters using M-Pesa.
The KRA takes 7.5 percent of the value of bets placed besides 20 percent of winnings and corporate taxes on betting firms.
The volume of bets funded from M-Pesa accounts surged 84.7 percent to 347.8 million, signalling a growing gambling addiction.
The growth of betting comes despite the government trying to curb the activity through higher taxation and increased regulations.
Betting is popular among young people – employed as well as the jobless — who see it as offering a game-like thrill besides an opportunity to make quick money.
While a few punters get lucky and win large sums of money, the activity represents missed opportunities and losses for participants as a whole.
The Sh83.2 billion wagered in the six-month period, for instance, is enough to buy 2.05 billion shares of Safaricom, equivalent to a 5.1 percent stake in the country’s most profitable firm.
Such a stake would earn dividends of about Sh2.8 billion annually, based on the telco’s latest distribution of Sh1.37 per share for the year ended March.Betting is now the second-largest business line by revenue under M-Pesa’s payments and betting unit after consumer-to-business (C2B), which generated sales of Sh5.1 billion in the six months to September.The disclosures show that betting firms and punters are being charged some of the highest fees by Safaricom compared to other M-Pesa users.The Sh2.95 billion revenue from betting, for instance, represents 3.5 percent of the value of bets funded from the mobile money platform.In contrast, Safaricom took only 0.25 percent or Sh5.51 billion as revenue from the Sh2.1 trillion worth of consumer payments to businesses through M-Pesa.The full scale of gambling in the country is unclear but the bets funded from M-Pesa account are expected to represent the majority of the activity given the platform’s dominance in personal payments.Betting firms are the biggest beneficiaries of the betting craze but all of them are private […]
