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Gambling in Africa

posted 5 years ago

Huge opportunities in Africa

The African continent has over 1.2 billion
people living in it and accounts for 16.3% of the world’s population, making it
the continent with the largest population behind only Asia.

Of the countries we will focus on here,
Nigeria is the country with the seventh largest population in the world. The
Democratic Republic of Congo is 17th and Kenya 29th.

Due to its potential, which is based on the
size of its population and the resulting revenue that is available across the
continent, Africa could easily become the next big area of focus over the next
few years when it comes to the gambling industry.

The fact that this is all relatively new in
African countries and many such opportunities remain unexplored, helps explain
why the sky is the limit as far as gaming and Africa goes.

Of course, seeing the potential and having
the frameworks in place to explore it are two very different things. Knowing
the local laws, processes and acquiring the necessary licences to make it all
happen require knowledge, connections and experience. Which of course is where
we come in to make it all happen.

To what extent is gambling regulated in these countries?

 

Nigeria presents the best opportunity of all

Relevant Acts

A few years ago, PriceWaterhouseCoopers
released a report called the Gambling Outlook 2013/17 which studied the pace at
which gambling might grow in Africa over the next few years. Of all the
countries included in the report, Nigeria came out top in terms of being the
one with the potential for the fastest growth, which could be anywhere north of
17% in terms of year-on-year growth.

Lotteries held at national level are
regulated through the National Lottery Act of 2005 which determine how they
should be run, what taxes are paid by both the Operator and the winners and
what other measures need to be put in place to ensure everything runs smoothly
and fairly. In 2011, the Money Laundering Act was put in place to establish
measures and penalties relating to Money Laundering offences, which apply to
the Gambling industry. 

Whereas both of those are relatively recent
Acts, most of the other ones relating to Gambling in Nigeria are from a while
back.

For example, the definition of ‘gambling’
can be found in the Criminal Code of 1990 and the Gaming Machines Act of 1977
is the one that relates to gaming machines such a slots and video poker.

At present, there does not seem to be a set
plan by the Nigerian government to get this legislation updated. 

For example, 2013 saw the first-ever
Nigerian online casino open its virtual doors. NairaGames Casino has admittedly
shut down since but it shows that being granted a licence to operate as a legal
online casino there can be done.  Further
proof of that is the fact that not only are there five licensed online
sportsbooks, but two of them also have online casino games on their site.

 

 

What does the law say?

As things stand, Nigeria can be said to be
semi-regulated.

The law states that legal betting includes
skill-based card games such as Casino Hold’em, Roulette and Backgammon, which
can be played at one of three legal bricks-and-mortar Casinos in Nigeria. These
three Casinos also offer sports betting facilities which make up a greater
share of the country’s revenue generated from gaming than all the table games
put together. 

There are currently also a handful of
Nigerian-based and owned sports betting sites. These are extremely popular and
100% regulated.

It is also legal to bet on state-run
betting pools and horse racing totes. These two forms of gambling are actually
regulated very strongly with measures put in place to ensure every bet on them
is registered, the winnings are divided equally and properly among the pool
winners and that any establishment running them is licensed before being open
for business. Anyone running these operations without the proper license can
face heavy penalties including huge fines and imprisonment, all of which
reiterates the point that everything needs to be done by the book and that of
course is where our work as consultants will be invaluable in making sure that
no stone is left unturned.  

Similar licensing requirements and
subsequent penalties to those who do not have them also apply when it comes to
running lotteries.

Understanding Nigerian Law and how to
interpret it is therefore paramount and for those who succeed in making it work
in their favour, the business potential is almost unparalleled.

 

Kenya among the frontrunners when it comes to regulation

Gambling laws in Kenya are mostly set out
in the Betting Lotteries and Gaming Act of 1966. The first thing it did was to
hand power over to the Betting Control and Licensing Board, responsible for
virtually all aspects of gambling in Kenya but above all, set up to regulate
gambling establishments.

That includes the 28 casinos, 11 bingo
halls, three sportsbooks and one horseracing track available on Kenya.

In this respect, Kenya has a more organised
and formal approach to regulating gambling than other African countries, of
which Nigeria would be a good example, as mentioned already.

Examples of the state having a formal and
organised approach to gambling within their borders are that gambling is a big
source of revenue for the state. This is mostly through a 20% tax on lottery
winnings charged to players and further taxes imposed on operators through
taxes and licensing fees.

To apply for a gaming license in Kenya,
applicants need to contact the Betting Control and Licensing Board and complete
a special form referred to as 13A. On completion they will have to pay the
Board a fee to carry out an investigation to determine the suitability of the
applicant (and in the case of a land-based business, the premise). The Board
will then decide whether to grant the license. 

Congo – Regulation at Government level has been a success
story.

Unlike Kenya, there is no Gaming Authority
or other special body regulating gambling in Congo. Instead, the Government
itself is responsible for doing so and the absence of a dedicated body does not
mean gambling there is not regulated. On the contrary: there are structures and
procedures in place that mean gambling activities are controlled, tax is paid
by licence-holders and that proceeds from running lotteries are put towards
good causes.

Gambling in Congo is legal and since 2005,
all ‘games of chance’ have been regulated. Since then, a few amendments have
been made to update the definition of what are games of chance and what are not
but as things stand, they include: lotteries, slots and other games where human
interaction or involvement does not affect the actual outcome.

In contrast, there seems to be less
clear-cut guidance regarding games of skill such as blackjack and poker meaning
it is not obvious whether these games are considered gambling. Although you could
argue they are, because they are readily available in both of Congo’s two
Casinos.

In addition to these two land-based
Casinos, other regulated forms of gambling in Congo are bingo (it is
specifically mentioned as an example of a game of chance though Bingo halls are
at a premium in the region) and lotteries. The National Lottery, authorized
back in 1984 through Presidential Order No. 84-155, is 60% state-owned and 40%
in private hands.

Much like the National Lottery in the UK,
proceeds from running it, after winnings have been paid out, are used to fund
socio-economic activities and causes that serve the public interest.

But if these forms of gambling are
regulated, online gaming certainly is not. It is legal to play online but in
the absence of any Congo-based online operators or specific rules relating to
playing with foreign sites, that is as far as the guidance goes.

Ghana

There is
relatively recent legislation governing Gambling – The 2006 Gaming Act –
which has made it legal to bet in Ghana and the body responsible for its
regulation is the Ghana Gaming Commission (GCC).

The GCC’s responsibilities include the
regulation, monitoring and supervision of games of chance and sports betting
operators, as set out in the aforementioned Act.

That includes dealing with the licensing
and running of the country’s four land Casinos and the five overseas companies
(at the time of writing) who run Sportsbooks. Mostly focusing on European
soccer but also offering markets on US Sports which are popular among Ghanaian
punters, they have bricks-and-mortar shops scattered around the country and
also offer the facility for Ghanaian players to place their bets online or via
their mobiles.

Applicants wishing to obtain licenses must
contact the Ghana Gaming Commission and follow the subsequent procedure.  In the specific case of Casino licences, the
applicant must also obtain approval from the National Redemption Council.
Casino licences are granted for a period of one year upon the payment of a fee
and the licence holder can apply for the license to be renewed at the end of
that year upon payment of a renewal fee, which is considerably smaller than the
one paid to be granted the licence in the first place.

The GCC however does not deal with the
Lottery side of things, which is run by the National Lottery Authority (NLA),
set up in 2007. Similar to Congo, the lottery is both an important source of
revenue for the country through taxes, as well as a way of funding aid for the
socially disadvantaged.

The National Lottery Authority (NLA) also
owns a sports betting product going by the name of Soccer Cash.

In one respect, Ghana is therefore a
regulated market when it comes to Gambling as we have seen, through a relevant
and recent Act and bodies set up to make sure everything is run smoothly when
it comes to for example, licensing and taxation.

 

Is online betting available in these countries?

Online betting is readily available in all
the countries we considered as case studies and in particular in Nigeria, which
has the highest quality and greatest reach when it comes to internet
connections.

In Nigeria, there are local sports betting
companies present within the country offering online/mobile betting and in the
case of Ghana, there is the NLA-run Soccer Cash product that is available in
shops, bars and online as well. Plus foreign companies who are allowed to
operate on Ghanaian soil as long as they have the requisite license.

What all four of them have in common is
that none of them have openly made it illegal for citizens of their country to
bet online with foreign sites.

It is, therefore, up to each and every
betting company to decide whether they want to accept players from the four
countries we have looked at. Of the four, Nigeria is the country that foreign
companies have been more sceptical about accepting customers from, but plenty
of other operators have been happy to welcome them to their site.

Our findings on Gambling in selected African countries

Looking at the case studies covered here,
we can reach a few general conclusions, even though all four countries are
slightly different.

They differ is in terms of governing bodies
specifically set up to regulate the gambling operations. Some of them have
specifically appointed regulatory bodies to deal with some or all of the
gambling-related issues within that country such as licensing, taxation and
penalties whilst others, of which Congo is the best example, have managed it
all through the Government itself without that necessarily making the
regulation process any less effective.

Similarly, some are also more competent
than others and how strict they are with granting licenses and imposing
penalties, will also vary.

They all have land-based Casinos and
lotteries available to play on their own soil and whereas some of them have
their own sports betting operators, they all make it legal for their citizens
to bet with foreign operators, if they so wish.

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