Worried Zimbabwe blocks new sports betting licenses after surge in gambling; it's huge in Uganda, Nigeria

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They bet on everything from football, dogs, cricket to basketball - and in Uganda there are over 2,000 operators.

ZIMBABWE has stopped awarding betting licenses in an effort to limit a surge in gambling on sports and lotteries in a country with an estimated unemployment rate of about 90%.

“We need to control betting, because we can’t be betting everywhere,” Deputy Home Affairs Minister Ziyambi Ziyambi said by phone on Monday from the capital, Harare. “There are now too many operators,” he said, declining to say how many. 

Zimbabwe’s unemployment rate is estimated by the government at about 11%, although Prosper Chitambara, an economist with the Labour Economic and Development Institute Research of Zimbabwe, said that 90% of the 14 million population are “either openly unemployed or under employed”. 

Zimbabwe’s economy has halved in size since 2000, according to the government. A land reform programme that saw the seizure of commercial farms slashed export income from tobacco and other crops and triggered shortages of everything from corn meal to motor fuel. That has boosted unemployment and driven some people to gambling, betting shop managers and gamblers said.

Family survival

“We have different kinds of clients—some do it for fun and some for economic reasons,” Emily Kabaya, a manager with VegasBet Ltd. in Harare, said by phone to Bloomberg, adding that there’s a link between increased betting activity and economic hardship. 

“My family survives from this,” Blessing Moyo, an unemployed former banker at the shuttered local unit of AfrAsia Bank, said after placing a bet at a Soccer Shop outlet in Harare on May 4. From one wager, “I got $2,700 and bought tiles for my house. My wife was initially against the idea, but she now realises that its a new way of life.” 

Sports betting is also big in other parts of Africa, with wagers being placed on everything from local and international football, Formula 1, boxing, cricket, tennis and basketball - and is slowly being regarded as a normal way to make a living. 

60m Nigerian punters

In Nigeria, reports indicate that about 60 million Nigerians between 18 and 40 years of age spend up to $9 million on sports betting daily.

That’s nearly half of what Nigerians spend on petrol every day, estimated at $20 million. The report showed that gamblers in Nigeria commit on average $15 in bets each day, while a separate article showed betting companies can generate as much as $100,000 monthly while they use $25,000 - 35,000 to pay winners.

In Uganda too, sports betting is hugely lucrative. In 2012, gambling was named a “new driver of chronic poverty” among young people in a report by Action Aid and other NGOs; according to a statement from the Ministry of Finance, there are over 2,000 active operators have been engaged in various gambling modes and techniques earning the government over $3.6million last year.

 This article in The East African highlights the fortunes of one university student in Uganda, who put in a total of $275 in two tranches, and made over $1,000, enabling him to buy a two-acre piece of land and pay his tuition fees. However, the stories of heartbreak far outnumber the good endings.

One company, Gaming International, set up over 200 points of sale all over Uganda in just two years from the time they launched into the market in 2009. The company has since expanded into Kenya, investing $1.5 million in gaming hardware, and $2 million in developing a country-wide sales network.

Norman Macheka, general manager of Soccer Shop in Zimbabwe, said the company employs 120 people across four outlets having grown since transforming a sports bar into a betting shop in 2012.

The biggest payout last year was $30,000 from a $5 wager, he said. The company also offers betting on horses, cricket, and dog racing. “Business is good, the most popular betting is soccer,” he said in an interview last week.

“The issue is about how people are trying to address poverty,” Christopher Mugaga, an economist with Econometer Global Capital in Harare, said by phone. “This all comes down to the economic environment, unemployment and people trying to survive. The economy is not performing.”

Zimbabwe’s economy is forecast to grow by 2.8% this year, according to the International Monetary Fund, down from 3.2% in 2014 and 4.5% the year before that, as uncertainty over black ownership laws stifle foreign investment. 

More than 1,000 jobs were eliminated by 76 companies during the three months through March, according to the country’s Retrenchment Board, on top of 7,000 workers last year. 

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