Sports betting on the spot as digital debt burden hits Kenyan youth

Source: Xinhua| 2019-04-02 20:09:23|Editor: zh
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NAIROBI, April 2 (Xinhua) -- Kenya's fast-growing sports betting industry is in the hot seat after the government linked it to increased digital debt among the youth and suicide cases.

Introduced into the east African nation barely six years ago, sports betting has grown into a multi-billion shilling industry.

Some of the things that have fueled the growth of the industry include the love for football, in particular the English Premier League, and the ubiquitous use of mobile money.

The explosion of digital credit in the east African nation is also said to have contributed to the increase in betting among the youth. The two industries, together with mobile money, are now interlinked.

A majority of the Kenyan youth, many of them jobless, are said to be borrowing multiple times from the about 50 digital lending platforms in the country to bet.

As expected, few win their bets and therefore, few repay their loans that range from 500 shillings (5 U.S. dollars) to 300 dollars, borrowed for as high as a 15 percent rate a month.

Up to 500,000 youths, according to the Interior Cabinet Secretary Fred Mating'i, have been blacklisted by credit reference bureaus due to digital debts linked to betting.

Besides the digital lenders, young people squander school fees, wages, rent, loans and shopping money on betting.

One of the worst documented cases is of a university student who used his government education loan of 400 dollars to bet and lost. He then committed suicide.

"Up to 76 percent of Kenyan youths aged 35 and below are engaged in some betting. Of the 76 percent, 54 percent are from poor backgrounds. What are we doing to our youth?" asked the minister as he announced proposed laws to streamline the sector on Monday.

Calvin Ochieng, a mechanic in Nairobi, is among sports betting addicts in the east African nation.

Ochieng, 28, bets every day on different platforms, sometimes up to 40 dollars. He borrows the bulk of the money but also reinvests what he wins.

"I rarely use money directly from my pocket to bet, it is either I borrow from the digital lenders or reinvest what I win from the betting companies which comes directly into my mobile account," he said on Tuesday.

He agrees that he borrows mainly because of betting and not to buy household or work items.

"But what I have received is more than what I have borrowed or placed as bets, which in my view is not a bad case since betting is a game of chances," he said.

But as the government moves to take action, multiple interviews with those who consider themselves betting gurus revealed that some Kenyans have mastered the art of not losing money bets.

"Since chances of winning the jackpot is minimal, I never go for it. What I do is place multiple bets of one dollar or less on various games predicting each team will score," explained Mathew Chomba, a secondary school teacher in Busia.

By parlaying his bets in this way, Chomba said, he uses about 10 dollars in a day but ends up making up to seven times more as he minimizes his chances of losing.

Over seven million Kenyans have taken mobile loans and half of them are repeat borrowers, according to a recent joint survey by the Central Bank of Kenya, Kenya National Bureau of Statistics and FSD-Kenya.

The survey noted that 35 percent of the digital borrowers use the money to meet their day-to-day needs, but most, 40 percent, use it for business that includes betting.

As the government plans crackdown on betting, a number of youths, however, have defended the practice, saying it gives the youth income.

"Before blaming sports betting, the government should create jobs and opportunities for the youth. It should also encourage responsible betting because gambling has been there since time immemorial and they earn revenue from it," said Mark Kuria, a commerce graduate who is job-hunting.

The National Employment Agency last week put Kenya's unemployment level at 43.4 percent, up from 39 percent.

In 2018, government data showed that revenues from betting amounted to two billion dollars and the firms remitted some 40 million dollars as tax.

Bernard Mwaso of Edell IT Solution acknowledged that sports betting has become a menace but linked the rise to high levels of unemployment coupled with spread of mobile technology, especially smart phone use, mobile money and digital credit.

"Technology has fueled betting because one can borrow cash or deposit money in their mobile account, check on the internet statistics about football teams and then bet. All this is done at the click of a button which makes betting easier to do," he said.