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Uganda is set to ban foreign betting firms for “shipping” profits abroad

The international gambling business is coming under severe pressure in Uganda.

On the sidelines of the World Economic Forum in Davos, president Yoweri Museveni tweeted that his nation will ban the registration of “new fully-owned foreign betting companies while the old ones will not have their licenses renewed.”

His tweet comes days after finance minister David Bahati said the president had issued a directive to not authorize any more permits for sports betting, gaming, and gambling companies. The deal is a blow to the legions of gambling firms operating in the East African nation including Kenya’s SportPesa, and British-origin betting firms Betin, and Betway.

“All they do is accumulate money from Ugandans then ship it out of the country,” Museveni said.

The decision to supposedly curb capital outflow follows a tussle between Uganda and Africa’s largest telco MTN. Authorities this week arrested and deported foreign officials from the company saying they had compromised “national security.” Yet in a meeting with MTN CEO Rob Shuter in Switzerland, Museveni said he advised the company to float shares on the Ugandan stock exchange to boost local ownership.

“The question of repatriating 100% of your profits yet there is little value-addition and wealth creation for Ugandans is unfair,” he said in a follow-up tweet.

Over the last few years, gambling in Uganda has grown with the industry diversifying from just casinos and lotteries to sports and online betting. Tax collections from the sector have also ballooned, with revenues jumping from 0.24 billion Ugandan shillings ($65 million) in 2003 to 11.1 billion shillings in 2014, according to one estimate.

Gambling addiction

But with increased access to smartphones and satellite TV, concerns have been raised about addiction, loss of savings and increased crime—especially among young people.

Similar concerns have also been raised in Kenya and Nigeria, where the seamless integration of mobile money and betting platforms have pushed many unemployed and poor people to the brink.

Yet banning betting altogether could prove an onerous task for Uganda, given how much the sector benefits state coffers. Sports betting is also a growing lucrative global business with a value of almost $38 billion.

Experts say one way for Uganda to benefit from and reduce the negative impacts of the sector is to amend its outdated regulatory laws, much of which were formulated in the 1960s. In light of technological advancements, the Ugandan think tank Economic Policy Research Center has noted current laws do not cover the whole gambling spectrum and do not have clear provisions to protect minors.

SOURCE: QUARTZ AFRICA

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