UNACCEPTABLE

Matiang'i orders work permits review for foreigners in betting industry

In Summary

• Ninety per cent of gaming industry players are foreigners.

• Betting companies owe KRA Sh26 billion and the attempt to claim the amount has been frustrated by court orders.

Interior CS Fred Matiang'i during a meeting between Betting and Licensing Board, stakeholders and the government at the Kenya School or Government on May 20,2019.
Interior CS Fred Matiang'i during a meeting between Betting and Licensing Board, stakeholders and the government at the Kenya School or Government on May 20,2019.
Image: ENOS TECHE

 Interior Cabinet Secretary Fred Matiang’i has issued a list of directors of betting companies to the Inspector General of Police and the Director of Criminal Investigations for review.  

This is intended to rid the country of those with work permits not authorised for gambling. Almost 90 per cent of the licensed gaming industry players are foreigners with titles like training manager, front office manager, operations manager, bankroll manager, head of marketing, head of IT, casino live game manager and project engineer. 

The list seen by the Star shows that the majority are from Italy and Bulgaria each with 14, closely followed by China with 10.

 

The others are Ugandans (two), South Africans (four), Tanzanians (one),  Czechs (three), South Koreans (six), Britons (four), Hungarians (two), Macedonians (two), Italians (four), Swiss (one) and Americans (two).

There are also three Russians, five Turks, one Moldovian, two Ukrainians, two Spaniards, one Swede, one French, one Filipino, one Sri Lankan, four Serbians, three Danes, two Indians and one Nepalese.

The CS, during a betting control and licensing stakeholders meeting, said that almost 100 per cent of the revenue raised by the gaming and betting firms owned by foreigners is repatriated to their home countries.

“The Central Bank of Kenya has associated this capital flight to some distortions currently witnessed in the financial sector,” Matiang'i said.

He questioned the benefit of the investments to the country, adding that in five years the annual turnover of the gaming industry increased from a mere Sh2 billion to about Sh200 billion.

“This represents a 10,000 per cent growth rate which defies conventional economic logic,” he said.

Matiang’i said no country had developed from gambling and the current misrepresentation propagated by the industry to convey the “economic logic” is shocking.

 

“Whilst technological advancements account for a portion of this growth, empirical evidence reveals that predatory gaming would explain much of this growth,” he said. 

According to the Interior CS, evidence from the Kenya Revenue Authority shows that the sector owes an estimated Sh26 billion in unpaid taxes.

He accused the sector of using the judicial process as a hideout to avoid paying taxes.

“Attempts to recover this amount have not been fruitful because the key industry operators have found refuge in judicial processes where all manner of court orders are sought and issued thereby frustrating the collection of taxes,” he said. 

He also faulted betting companies for the negative effect that it has caused to the youth. 

Over 500,000 Kenyans are currently blacklisted for defaulting in repaying money borrowed for gambling.  

“The common presence and craze of gaming in Kenya have caused dire social and economic strain at the behest of a few elite, a majority of whom are non-Kenyans and live outside the country,” he said. 

The CS said that come June 30 at midnight, no gambling licence will be renewed automatically.

“All applicants for licences (fresh or renewal) will undergo security vetting. Renewal of licences will be pegged on due payment of taxes backed with all supporting evidence,” he said.

He instructed the industry players to cooperate with the government because it only supports clean business and investments.

Going forward, the government has said it will establish a proactive regulatory framework for the industry so as to create a socially responsible gambling culture.

(Edited by O. Owino)