From responsibility to regulation
Growing concerns about the rise of gambling addiction in some African nations has led to calls for more stringent regulation across the continent. Jake Pollard assesses the severity of the situation and asks two leading industry figures how they would go about tackling the problem
Corporate and social responsibility has reached such a level of prominence in 2019 that it is impossible to envisage any debate about the future of the igaming sector without discussing the subject at some length.
This should come as no surprise. In Europe, and in particular the UK in recent years, we have seen the debate, and attendant criticism of the gambling industry, intensify to such levels that it seems the atmosphere and entrenched positions could not be any more pronounced.
These scenarios apply to most EU markets to one degree or another, whether it is in soon-to-be or recently-regulated Holland and Sweden, or long-standing Italy and Spain.
But what of Africa? CSR issues and claims that online betting has caused major problems in Kenya and Senegal, especially among young players, have been in the public sphere for some time already.
The pressure created by articles from local and international media outlets depicting tales of young men spending more than they can afford and developing gambling problems have forced national authorities to act. The Uganda National Gaming Board (NGB) passed new measures in March requiring all gamblers to upload identity cards or passports to show they were at least 25 years old. The NGB said it also planned to set up a central monitoring system to track gamblers’ activities.
In neighbouring Kenya, the National Assembly is considering a bill that would revamp the country’s regulatory framework for gambling, imposing significantly higher costs on licensed operators and establishing the country’s first national lottery.
On 1 July, the Kenya Betting Control and Licensing Board (BCLB) suspended the licences of eight sports betting operators and refused to renew those of 19 other gambling companies. According to press reports, among the companies affected were SportPesa and Betway (both suspended) and Betin (whose renewal was reportedly rejected outright). Between them, the three control more than 80% of Kenya’s online sports betting market.
But it should also be remembered that these events are occurring because of bookmakers’ aggressive marketing and dominant market positions. Their activities and growth in markets such as Kenya, Nigeria, the Ivory Coast or Senegal have attracted much coverage, most of it negative and critical, which in turn has forced the authorities to act.
Without wanting to undermine the seriousness of the subject, is the situation as bad as it is made out to be? No one really knows is the true answer. There is very little reliable data that gives an accurate picture of the situation in the region.
Operators are also highly reluctant to divulge any information, other than to refute or deny the worst of the allegations made about them or their owners. iGaming Business approached some of the betting operators working in Kenya and Ivory Coast for comment but they did not respond.
Lottotech operates the national lottery in Mauritius. For managing director Michelle Carinci, minimising harm “through player protection programmes can only be effective if there is collaboration among all stakeholders – the regulator, law enforcement, operators, retailers, researchers, health departments and the community at large”.
She adds: “Sports betting, for example, may attract underage players who love sports. It is critical that parents play their role and educate their children about the risk and possible harm associated with gambling at too young an age, which means parents must be educated [about these issues].
If players understood the true odds and mechanics behind video lottery games or slot machines, they would be better positioned to make informed choices about their gambling behaviours.”
The issues also play out at a societal level. Gambling can have a positive impact on how citizens approach and, as mentioned by Carinci, understand the mechanics of gambling and their own playing behaviours.
“Two years ago, we aligned with UN sustainable development goals (SDG) focusing on work and economic growth; responsible consumption and production through responsible gambling programmes and partnerships; gender equality; quality education and climate action,” she says.
“All those activities rely also on one important SDG and that is SDG 17, which is about partnership. With the help and involvement of multiple stakeholders, our efforts and programmes are more impactful.”
Carinci explains that the SDGs were selected because they align with the societal needs of Mauritius.
“In 2018, Mauritius was ranked 109 out of 149 for gender equality and diversity, demonstrating the need for action.
The education system in Mauritius has resulted in an increasing number of young students dropping out of school. Lottotech therefore supports schools that are funded by NGOs which provide a second chance to these same students. Goals should now be set aligning with the national needs.”
The point Carinci is making is that real progress can only be achieved when stakeholders, including private operators, take a concerted and holistic approach to the issue.
She adds: “We strongly believe that having employees involved in CSR projects provides another dimension which encourages them to be good corporate citizens and at the same time instils pride in working at Lottotech where we strive to make a difference in our communities.”
For igaming consultant John Kamara of Global Gaming Africa, “responsible gambling is a huge conversation at the moment and the truth is that most African operators have failed to really understand its magnitude, which has led to some of the problems we are seeing with regulators and policy makers.”
Kamara adds that operators should self-regulate and own the message of responsible gambling and communal CSR. With regard to what is happening in Kenya, he says: “It’s important to understand that the government is also reacting to the industry. Most emerging market governments are learning about gaming and they respond to how the industry presents the sector. Everyone needs to sit around the table and have a proper discussion about the way forward.”
However, he believes things “will calm down and a clearer position for the industry will be achieved”.
For Lottotech’s Carinci, the discussion should centre on a government’s “obligation to protect its citizens”.
She goes on: “Around the world we see governments regulating industries that have the possibility to cause harm. Gambling is one of those. Unregulated operators have operated for decades. The internet and mobile gaming have enabled grey market gambling to grow at an unprecedented pace.
“Some countries have given these grey operators the opportunity to become regulated operators and adhere to all the principles of responsible gambling and player protection. Other countries have taken steps to block [unlicensed] operators. We don’t believe prohibition is an effective way of protecting the public and in the long term it will not work.”
As for whether the days of aggressive marketing and hyper-fast growth are over for many online operators in markets such as Kenya, Uganda or Senegal, Carinci is forthright.
“One thing I think is evident: the aggressive and sometimes reckless marketing attracting minors into gambling activities, not paying heed to responsible gambling practices, the threat of money laundering and fraud, have all contributed to governments and society taking note,” she says.
All this is a similar paradox to what has happened in many European markets over the past 20 years: witness the obvious example of a highly regulated market like the UK and the new Gambling Act that came into effect in 2007.
Along with FOBTs on the high street, it is marketing and sports sponsorship (i.e. operators’ most visible activities) that provoke the most outrage from industry critics and subsequent action from the authorities – and even from the industry, in the form of the whistle- to-whistle ad ban set up by the major UK bookmakers.
Therefore, it would be logical to see African governments erecting further barriers or blocking illegal or grey operators as they turn their focus towards establishing their own effective regulations.
For Carinci this would be a positive as it “potentially would provide grey operators the opportunity to become legitimate operators, protecting and contributing to the societies within which they operate.
“The more the media, community workers, health officials, regulatory bodies and the public are engaged in a dialogue, the more likely we will see a transformation in many countries that have up until now treated the issue and subject with benign neglect.
“When it comes to the growth potential of markets, the right gambling model will ensure that any market will have moderate sustainable growth for the foreseeable future.”
John Kamara and Lottotech's responsible gaming strategy lead, Virginie Pasnin, will be discussing “Tackling Responsible Gambling and Public Perception for a Sustainable African Gaming Industry' at 11:15 on Day 1 at this year's ICE Africa, taking place on 2-3 October. To find out more and to register go here.