By Graham Wright
To get a sense of how pervasive sports gambling has become in Africa, where large numbers of young people are using digital financial services (DFS) for the first time, chances are you need look no further than your favorite soccer player’s jersey.
Betting companies’ logos now appear on 9 of the 20 English Premier League soccer teams’ uniforms, and companies are paying big money for this visibility.
Kenyan sports betting company SportPesa reportedly paid $10 million to feature its logo on the Hull City players’ shirts.
SportPesa is also sponsoring Everton’s shirts at a cost of $12.5 million a year for five years. Sports betting is a money-spinner.
The gambling industry in Kenya, Nigeria and South Africa was projected to be worth $37 billion in 2018.
iAfrikan notes, “In Nigeria, 60 million people aged between 18 and 40 spend up to $5 million on sports betting daily. The majority are unemployed or underemployed young people who stake an average of USD 8.40 daily.”
A recent survey by GeoPoll revealed that more than 54 percent of youth (ages 17 to 35) in Sub-Saharan Africa have tried some form of gambling — primarily sports betting. An estimated 2 million individuals engage in mobile-based sports betting in Kenya alone, most between the ages of 40 and 21. GeoPoll notes that 96 percent of Kenyans use their mobile phones to bet, and 75 percent of all wagers are placed using smartphones.
Small wonder that one Kenyan government minister calls sport betting “a curse on youth.”
There is evidence that gambling is destructive to Africa’s youth
There are growing concerns that sports betting among students distracts many from their studies. Dauti Kahura reports that students are “… now spending all their energies dreaming every single day about betting and winning big-time money. It has become a full-time occupation for them. Studies have become secondary.”
As one chemistry student at the University of Nairobi told him: “Here at Chiromo, there are betting groups, just like there are tutorial groups, but the betting groups are superseding the tutorial groups by the day.”
The consequences can be devastating. There are a growing number of reports of students committing suicide after losing bets and of other students at high school and university dropping out after using their school fee money to gamble.
So why are young people drawn to sports betting?
About 35 percent of Africa’s young people are unemployed. Only one in six African youths is in gainful wage employment, and all African youth are susceptible to the aggressively marketed dream of “winning big” and transforming their lives.
Unsurprisingly, 75 percent of students say they bet to make money, like this enterprising young man in Kenya. Enjoyment and boredom also motivate students to gamble.
Eric Musau, a senior research analyst at Standard Investment Bank, told Equal Times that betting is increasingly considered a reliable source of income. “Betting is giving young people hope for something better regardless of their financial situation, but this can quickly become an addiction,” he said.
Gamblers perceive “informed betting” (betting guided by “experts”) to improve their odds and allow those who have done their homework to win. In 2018, 11 of the top 20 Google search queries in Kenya were directly related to betting.
Indeed, many gamblers claim they make good money out of placing smart bets. There are examples of successful gamblers setting up websites, as well as Facebook, WhatsApp and Telegram groups to offer advice and even act for others.
One of the most successful advisory groups is run by Binti Foota (a feminine-sounding name that reflects the apparent growth of women gamblers), which charges $5 ((About ugx. 18,250 )every two weeks to help subscribers predict the outcome of football games.
There are some benefits to sports betting
Proponents of sports betting note that the craze has created thousands of new jobs. Sports betting companies have hired agents, including some to run betting corner shops or “parlors” — typically in poor communities with no internet connection. And “sports analysts” earn money by providing analysis and advice and helping others place bets. Supporters also note that sports betting provides quick money for ordinary people (hmmm … that cuts both ways), generates tax revenue for the government and contributes to economic growth in African countries.
Does sports betting encourage people to use DFS more broadly?
For those of us interested in the promotion of DFS and mobile money, sports betting appears to be a worrying “unintended consequence.” Worse, while data are scant, it is clear that some gamblers use the easy access to digital consumer credit to borrow to bet — leveraging their risk.
An argument commonly offered by sports betting proponents is that gambling is an important “on-ramp” for the poor to use DFS. However, as noted, 75 percent of sports bettors in Kenya use smartphones to place their wagers. How many of these are really poor — or are indeed using mobile money for the first time to bet — is open to conjecture. In Kenya, over 70 percent of people already use mobile money, so the “on-ramp” argument may be more applicable in countries like Nigeria, which has lower mobile money penetration rates. In Nigeria, less than 5 percent of adults have mobile money accounts, and 29 percent have bank accounts — both of which can be used to load money onto betting accounts at the leading sport betting providers.
Again, how many of these DFS accounts were opened to bet online or through mobile is open to question, particularly with the growing availability of largely cash-based betting parlors across Africa. So the benefit for financial inclusion may be, at best, “one of several modalities of interacting with DFS, as engagement becomes more frequent and more advanced.”
There is a pressing need for more research into sports betting and its relationship with mobile money and digital credit. The financial inclusion community must develop regulatory, policy and operational responses to the many challenges sports betting presents. Given the addictive nature of gambling and the nature of the odds, which will always be set in favor of the sport betting company, I would wager that its net effect for young gamblers is negative.