Tuesday, May 16, 2017

Revealed: How government gets billions from sports betting

 

By Khalifa Said @RealKhalifax ksaid@tz.nationmedia.com

Dar es Salaam. The revenue that the government gains from sports betting industry has doubled in the past three years The Citizen can authoritatively reveal.

The revenue has gone up from Sh6.2 billion in 2013/14 to Sh12.1 billion in the last financial year as analysed from the industry regulator’s financial data.

This puts betting among the biggest revenue generators to the national coffers from the gaming sector with casinos.

Apart from the revenues which go to the national income, The Citizen has established that the industry has turned a full time job among youths with others making up to Sh150, 000 a week.

Data from the Gaming Board of Tanzania (GBT) shows that in the period of 2013/14 to 2015/16, sports betting has generated more than Sh30 billion in total taking over casino industry which has been a main player in the gaming sector for years in terms of revenue generation.

In that period casinos had generated only Sh28 billion which is less by Sh2 billion from that of fast-growing sports betting industry.

The revenue collected from sports betting in three years is enough to run the ministry of information, culture, arts and sports as in 2017/18 sought 28.2 billion for all operations.

Mr James Mbalwe, the acting Director General of GBT says sports betting has grown faster due to the increase of gaming shops across the country and online services.

“Again, in the beginning players were not paying tax because we were only taxing operators. So after starting deducting taxes from players, the revenue grew considerably,” he said.

The government amended section 31A of the Gaming Act Cap 41 in 2015/16 financial year imposing 18 percent tax to all winnings.

The possibility of getting more money after predicting a sport match and availability of income is what make more youth involved in.

Said Mwangoda, 33, a Buguruni resident in Dar es Salaam says he bets every day from Sh1,000 to Sh5000 and earns an approximate of Sh150, 000 a week.

“I was working twelve hours a day as a casual labourer at one of the factory in the city and I was getting a wage of not more than Sh500, 000. I decided to quit the job since it had no benefits to me,” says Said, a father of two. Said says has turned sports betting as a full time job after realizing that the job pays him a lot approximately Sh600,000 a month with less energy asserted to it comparing from his former job.

Betting is not for men alone. Ladies too join the practice fast with majority being influenced by their peers despite having large possibility of losing.

Janet Tambo* (23), (not her real name), says her love for football and her friends’ betting behaviour influenced her into betting business which she now does it routinely. “It has indeed been helping me, I no longer make a lot of calls back home to my parents to ask for money over small things. I can get them all with the money I win on the betting,” says a Tumaini university Dar es Salaam college (Tudarco)’s student.

Unlike those who spend sometimes analysing and monitoring matches to betting shops, Ms Tambo does not go, instead friends bet for her and once she wins they bring her with the money.

She says she does not have any plans to stop from betting unless she wants to turn dependant on everything on her parents, something that to her is a taboo.

According to Ally Mayay, a sport analyst based in Dar es Salaam, sports betting industry has grown in the country in the past three years due to people’s affinity to sports thanks to the technological innovation which presents sports fans with the news of their favorites sports clubs at their convenience.

“It is true that there are bettors who know nothing about sports and not fans of neither football clubs, but these are very few ones and represent that category of unserious bettors. Most of the serious bettors who can spend up to Sh100, 000 are strong fans of football,” says Mayay.

However, Paul Urio, a business consultant, is against the idea that sports betting behavior is increasing because of sports affinity but due to the fact that people, mainly youths, live through the belief of sleeping poor and wake up rich.

“Many youths want to get money through shortcut means and think that sports betting can offer the best sort of it,” says Urio adding that another reason of the increasing betting behavior is due to the fact that the cost of betting has been reduced making many people to afford. People can’t buy services if they don’t have money, says Dr Donath Olomi, the CEO with the Institute of Management and Entrepreneurship Development (IMED).

Dr Olomi, a business expert, says the growth recorded in sports betting relates to changes taking place in the society including the growing number of middle class which among their characteristics is spending.

The ever growing of sports betting has outshined casino in generating government revenue. The regulator says most of bettors use their savings in betting.

“Sports bettors are many compared to those of casino and they are not affected by the current economic condition as their casino counterparts do,” says Mbalwe.

He said in the beginning casino players were able to play up to Sh2 million but now very few are able to play in more than Sh500, 000 and even the frequency has declined from throughout the week to weekends only.

“That has caused casino operations not to perform well leading it to generate less revenues and thus overtaken by sports betting industry,” he says.

Despite the fact that there are various gaming regulated by the GBT, sports betting and casino have been the backbone in revenues generation.

Mr Mbalwe says that after seeing the trend of casino gaming decline, they decided to conduct a survey to find out what has been the causes assuming that casino players have turned to sports betting.

“But we found out that there is no any relationship between casino players and sports bettors, while the former is for people with big income the latter is for small earners who in most cases uses the money they saved from other spending,” says Mr Mbalwe in an interview with The Citizen.

This revelation comes at the time the country is ranked third in youth betting frequency behind its neighboring Kenya and Uganda.

According to a recent GeoPoll’s rapid survey carried out among youths between the ages of 17-35 most youths in Tanzania bet once in a month comparing to neighbors in Kenya who bet at least once a week.

The survey dubbed “Mobile Gambling among Youth in Sub-Saharan Africa” was conducted in Uganda, Tanzania, Ghana, Nigeria, South Africa and Kenya.

However, Mr Mbalwe says that the betting frequency among youths in the country is low due to the fact that establishing a sport betting center in the country is challenging due to regulations and hardship in getting premises.

According to data obtained from the GBT, by December last year there were 15 sports betting operators in the country with 286 betting shops and 1, 755 sports betting terminals.

But betting practice is urban oriented and is dominated in Dar es Salaam which is the richest region in the country.

By 2016, the commercial capital alone had almost three-quarters of all sports betting shops with a total of 211 followed by Arusha with 18 shops.

Mwanza had 533 terminals, many than any region, followed by Dar es Salaam (378) and Morogoro with 269.

Top five ‘betting regions’ are Dar es Salaam, Arusha, Mwanza, Tanga, Kilimanjaro, Pwani, Mtwara, Mbeya, Morogoro and Dodoma lead in having both betting shops and terminals.

No betting here

While betting is related to the youth practice, data from the gaming board shows that there are regions which doesn’t have shops, terminals or agents showing there is no places for physical betting.

The regions, which analysts says players might be using alternative like online services, includes Singida, Manyara, Njombe, Rukwa, Katavi and Tabora.

On why others regions doesn’t have betting shops, terminals or agents, the regulator says the investors always invest in areas they can make profit and they cannot be forced.

“But we encourage them to expand their operations beyond Dar es Salaam and other big cities,” he said.

With the coming of online betting, however, Mr Mbalwe says that the frequency is expected to grow and reach more people without the physical presence of the betting centers.

Some of the sports betting agents who operate online and which Tanzania’s bettors are accepted to place their bets include Meridianbet, SupaBets, BetHam, Throne Bet, FastBet, Princess Bet Tanzania, and 5 stars 888 Sports betting,

Others are 5 stars Sky Bet, 5 stars 188 Bet, Bet Fred, Ladbrokes, William Hill, Bet Fair, UniBet, RedBet, Paddy Power, TAB Racing and Sports, Sportsbet Australia, Horseplayer Interactive, bet-at-home, Coral, 188 Bet, and TAB Touch.

Mr Ronald Shirima, a General Manager of Gal Sports Betting Tanzania, says although the industry had been growing fast in recent years but the frequency of betting among people has currently reduced due to what he calls ‘economic shake up’. “But even with the economic hardship and regulation challenges we have been able to stay strong and offer best service which satisfy our customers’ needs and meet standards,” says Mr Shirima revealing that plans are underway to expand in other regions.

But other operators fears that the government decision to allow anyone to establish a sport betting shop without caring their experience in the business has made the business not only roughly run but also turning a menace.

“If the situation will continue like this without any intervention from the government on who exactly can establish the betting shop, accusations will increase against the business and that can lead its disappearance,” says one operator who sought to be anonymous.

The government says it recognize the role played by sports betting industry in bringing development through its revenues in the government.

“We would like to promote and develop any sector which by any way generate income and uses that income to pay tax to increase its ability in contributing our efforts to bring about development in the country,” says Ben Mwaipaja, a spokesperson with the Ministry of Finance and Planning.

If there are any problems on taxes that stop the sports betting operators from conducting their business smoothly, he says, they should report the issues to the ministry for solutions.     

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