Login Casino interviewed Yahaya Maikori, an expert in the legal field and the Senior Partner of the law firm Law Allianz on the current situation of the gambling market in Africa as well as his outlook for the future of the industry.
Africa is one of the most promising markets nowadays. To what extent is there a pressing need for regulation? How can the African market get rid of illegal operators?
Thanks for this question. The gambling industry is currently witnessing unprecedented growth in key African markets, this growth has generated public interest because of its social and economic implications. As it gets assimilated into mainstream economic activities, the need for regulation becomes very compelling in order to instill some order in the ecosystem. The current state of affairs has created a breeding ground for illegal operators who most times are poor ambassadors of the industry. While regulation is pressing, we also know that in most cases the legislative process is a tedious process; notwithstanding the arduous process of law-making – effective tax laws even if unrelated to gaming can be used to deal with illegal operators.
Today Kenya is one of the actively developing markets. The 10% tax on betting operation (which is being discussed, but has not been introduced yet) as well as the earlier decision on the gambling legislation audit and license fee increasing – to what extent are these actions favorable and appropriate for the local betting sector?
Well, Kenya is an example of the industry’s Wild Wild West. This was bound to happen, even though I believe government’s intervention is more reactive and punitive than proactive. We cannot state for certain what the final law will look like and what the wider implications will be. Suffice it to say that government seems to have a poor understanding of the industry and its applicable tax structure while there was also gross abuse by the operators.
How will the tax introduction effect betting companies?
Well, we have seen the new developments with Sportspesa and Betin who control 65% of the market; If they have actually exited the market then it sends the wrong signal but on the flip side it also creates an opportunity for players who were struggling hitherto increase their footprint. One of the Kenyan legislators stated that the betting companies were good riddance because they added no value to the society – now that is food for thought for the industry.
Nigeria is currently experiencing significant growth in online sports betting. According to experts, this can be due to the fact that mobile payment systems entered the market. What do you think in this regard? Are there any other factors that influenced this level?
The one factor that accounts for Nigeria’s growth is its large population of almost 200 million people (the largest in Africa) making it the most mobilized country in the world. So regardless of the size of the market share, it accounts for a lot when compared to that of other African markets. Secondly, the affordable internet and accessible payment systems like USSD are helping facilitate online gaming. Mobile money is yet to start but I am sure once it commences the growth will be exponential.
Can international companies enter the African market? What are the main challenges for the local industry?
Sure, international companies are already drivers of the industry in key markets. But like on every other market challenges do exist – in Africa those challenges include infrastructural deficit, inadequate or poor
regulation which creates uncertainty, player fixation with sports betting to the exclusion of other games and the slow growth of online gaming making retail offering very difficult for European companies.