Africa’s Gambling Industry faces highs and lows

Notwithstanding the criticism the gambling industry in Africa and elsewhere faces for creating a negative social impact, the industry view is that a strong regulatory system that will help gambling to thrive is the key to success in Africa. In fact, Lanre Gbajabiamila, the chief executive of the Lagos State Lottery Board (LSLB), will discuss the achievements of his organisation when he delivers one of the keynote speeches at World Regulatory Briefing Africa (WrB Africa), which will take place in Lagos, Nigeria on April 11-12, organised by Clarion Events, the team behind ICE Totally Gaming.

Ahead of his appearance, Gbajabiamila told that the legalisation of many forms of gambling in the Nigerian state has been beneficial because a robust licensing system has enabled law-abiding operators to offer a range of regulated products, raising money for good causes while also deterring criminals. The LSLB splits its focus into four areas – regulate, protect, promote and generate – meaning that it plays a role in the development of the legal gambling sector, while also keeping check on the various licensed lottery, betting and other operators.

“Regulation has proved very effective,” said Gbajabiamila, who has led the LSLB since 2007, adding, “Prior to the setting up of LSLB, the industry in Lagos was largely informal and unregulated. Aggrieved persons had no means of seeking redress for wrong done and the state also lost revenue that could have been generated. The benefits are job opportunities, wealth creation and social development of the state. Our major concerns are always unlicensed operators and the threat of underage gaming.” Gbajabiamila believes that strong regulation has allowed operators to attract customers from across society, including wealthy individuals who may have previously been repelled by criminality within the sector.

However, it is not as if the gambling industry is not facing problems, especially in South Africa where casinos attract tourists the most. As Sun International CEO Graeme Stephens recently remarked, “Our real problem is the core South Africa gaming business and this is affected by the economy in this region. But it goes beyond that – there is a feel-good factor that is missing. People lack confidence at the moment, and when you lack confidence you don’t spend your money in a casino.” Regulatory woes are also a deterrent. Last December, the Competition Commission blocked the acquisition of Peermont Global, which Sun was acquiring partly for the attractive Emperor’s Palace Casino.

In terms of legalities, the Association of Gaming Operators in Kenya recently said that clauses affecting taxation of winnings are contradictory and not clear on who should in fact pay the tax. Gaming operators said in court documents that most of their clientele were tourists and foreign nationals who were not covered in the Income Tax Act. They say that if they are to file online returns for the withholding tax on gross winnings they will be required to inquire into each player’s transaction including online bets and the extra burden of coming up with a profit and loss account. Casino operators have opened a fresh court battle with the government over laws that compel them to tax winnings by foreign nationals and to reveal customers’ Personal Identification Numbers (PIN) to the tax authorities.

On the positive side, work on the new Menlyn Casino is moving ahead swiftly and the group plans to invest R4 billion in the project in the coming year. The casino will open in 2017.

The overall mood about the gambling industry across Africa seems to be upbeat. “The Nigerian gaming industry is an evolving one and gradually expanding. More states and individuals are becoming more aware of the opportunities that exist in the industry in terms of entertainment, revenue and employment,” is the opinion of one the participants of WrB Africa. Adding to this, the convention’s event director, Rory Credland, states: “It will be fantastic to bring together so many people from across the globe to talk about responsible gambling and how we can help to create a sustainable future for one of the gaming industry’s high-potential markets.”


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