Africa’s gaming industry is in for a big blow following recent steps by two countries – Kenya and Uganda to ban the business. While the Kenyan ban has been temporarily suspended, legislators are currently considering policy amendments that would overhaul current state gambling laws by imposing significantly higher costs on licensed operators.
Meanwhile, the Ugandan decision to stop the gaming business remains in place.
With these actions, both jurisdictions have set a precedent that threatens to spread across the continent and bring to a halt the great signs of promise demonstrated by the continents gaming industry.
The gaming industry has continued to expand, benefiting from large and youthful population, improving internet accessibility, and the increasing access to internet-enabled devices.
Sports betting have emerged as a lucrative business, leveraging on Nigeria’s huge football culture. Some of the big leagues, such as the English Premier League, Spanish LaLiga, German Bundesliga, Italian Seria A, French Ligue 1 have over 20 millions of fans in the country and betting provides them the opportunity to earn from the sport they love.
Poor economic growth coupled with high unemployment rates has activated the growth of gaming industry in Nigeria.
The gaming industry in Africa is also making wave especially in underdeveloped countries. Gaming companies are gaining competitive advantage with innovate, and creative gaming contents that drives gaming experiences.
The burgeoning African gaming market has been spearheaded by a number of countries in recent years with South Africa, Nigeria, Kenya, Uganda and Tanzania widely deemed as the leading gaming markets on the continent.
Technological hubs, increasing online access and digital penetrations rates, as well as viable payment solutions being in place for a mostly unbanked population has helped to grow the gaming industry.
In Kenya, mobile operators cover almost 90percent of the population with over 46 million people having access to the digital space.
These conditions, intertwined with a youthful and growing middle class that has a staunch passion for sports, has made the 2nd most populous continent on the globe an attractive opportunity for gaming operators looking to expand beyond existing mainstream and, often, saturated markets.
However, after consistent year on year growth in a number of markets in the sub-Saharan region, the problems affecting their European counterparts have emerged in the promising market.
With betting activity sweeping across the continent, and East Africa in particular, Uganda was the first nation to act in 2019. According to local media, State Minister for Finance David Bahati “received a directive from President Yoweri Museveni to stop licensing sports betting, gaming and gambling companies.”
In addition, for those already registered, there would be “no renewal of licenses when they expire”. As well as wanting to divert the attention of the youth away from sports betting and its harmful social impact,
President Museveni specifically referenced foreign-owned companies repatriating profits rather than re-investing them in Uganda as a reason for the ban – a cause that has resonated with neighbouring jurisdictions.
Gaming powerhouse Kenya was the next significant market to act, albeit not to the extent of banning new and future licenses. Instead, the Kenyan Betting Control and Licensing Board (BCLB) mirrored similar moves being made in Europe, most notably in Italy, by focusing on the widespread levels of advertising.
According to a statement released by the BCL, “outdoor advertising of gambling, advertising of gambling on all social media platforms, advertising gambling between 6am and 10pm, [and] endorsement of gambling operations by celebrities” would be banned.
A recent report published on the Global Games Market by NewZoo, a global provider of games and e-sports analytics, shows that Nigeria ranked second place of all countries on the continent, after Egypt, with regards to the amount of revenue generated from gaming business between January and October 2018. It was reported that in total, Nigeria generated $180 million in revenue while Egypt lead with $286 million in revenue for the same time period.
Algeria came third, with $142 million generated, whilst South Africa made $129 million and Kenya $31 million.
These confirm the boom that has hit the gaming industry in Nigeria, as it once again receives a global recognition, despite the fact that online gambling is very much a hot topic both in Nigeria and other African countries. In fact, there has only ever been one Nigerian online casino launched back in 2013, which is no longer operational. Instead, there are a number of online casinos in Nigeria that are run by overseas operators that accept Nigerian players.
The moves from two sub-Saharan markets have led to many in the industry questioning both the severity and, more importantly, the effectiveness of the rulings. With regulated gaming prohibited, there is a high risk that revenue growth Africa gaming markets might shrink.
Anthony Nlebem
