Impact of Globalization: Online Sports Betting in Kenya

Impact of Globalization Name: Institution: Course Code: Date: Online Sports Betting in Kenya According to CITATION Aar19 \l 1033 (Gray, 2019), the global sports valuation of the sports betting industry has a rough estimate of about $250 billion. Previously, this industry was concentrated in the West due to the broader penetration of the internet in their countries. Africa was an outlier market. However, in the last decade, most major sports betting firms have outpoured into the African market. Most major betting firms have established some form of presence in Africa. The prime markets in Africa are Nigeria, Kenya, South Africa and Ghana. These countries have lax rules on regulating the gambling industry and the foreign players continue to market intensively in Africa. One of these countries, Kenya has seen a tremendous growth of this industry which was introduced in the country barely 5 years ago. The Kenyan market is largely controlled by Sportpesa which was the first online sports betting company to the market. For this article, we will discuss the introduction of online sports betting in Kenya. The first player, Sportpesa, is largely owned by foreigners. The largest stakeholders are two Bulgarians and an American who cumulatively own 63% of the company CITATION Bus19 \l 1033 (Business Daily, 2019). Since its inception in Kenya, the company has grown tremendously and though other entrants have gained a significant share of the market, Sportpesa is still leading in market share. At the moment it is the official sponsor of English premier league teams; Everton and Hull City football clubs. The company has gone ahead to sponsor several teams in the Kenyan premier league, others in Tanzania and in South Africa. The company also has introduced its own tournament known as Sportpesa Super Cup. Though the tournament is played in its two largest markets, Kenya and Tanzania, it is meant to increase the brand awareness of the company. The introduction of online sports betting in Kenya has had a tremendous impact on the country. First, it led to an explosion of other betting sites. Recently, when the Kenyan government was cracking down on the betting companies for tax evasion, it closed 27 betting companies who cumulatively owed the government nearly $260 million in taxes CITATION Sta192 \l 1033 (Standard Media, 2019). It is important to note that all these betting firms have been established in the last five years. Thus, the introduction of online sports betting prompted other investors and entrepreneurs to target the Kenyan market and introduce their own sports betting platforms. On the other hand, the industry has had unintended consequences on the country and its economy. It has paved way for more players and since the legal framework was loose of poorly implemented, the country is now grappling with youth addiction to gambling. Many people have had access to the betting platforms because the country has a fair penetration of internet nearly 83% mainly through the use of smartphones CITATION Kev19 \l 1033 (Namunwa, 2019). They use smartphones to bet and since the legal gambling age regulations are poorly enforced, children are addicted to gambling CITATION BBC18 \l 1033 (BBC, 2018). In a study published in 2016, 78% of university students were problem gamblers CITATION Rac16 \l 1033 (Koross, 2016). In a country with high unemployment rates, most unemployed youth and children are leveraging their little earnings and income to the betting platforms aiming to make a fortune. School going children have been skipping lunch to gamble and it has been affecting their education CITATION Vic18 \l 1033 (Vice News, 2018). The promotions and advertisements of the betting firms do not explicitly show that gambling is wrong for children and therefore the public is not aware of the dangers of the hobby. The online sports betting euphoria has also ushered in a new gambling problem which has been seized by the Chinese CITATION Vic18 \l 1033 (Vice News, 2018). The Chinese have introduced betting machines all across the country. The gambling machines are designed to accept and dispense coins. Though the national government has outlawed the gambling machines, they continue to be used all across the country due to poor enforcement. The county governments continue to issue licenses for the operations of these machines but the national government has outlawed them CITATION Vic18 \l 1033 (Vice News, 2018). In that grey area, they continue to addict the youth who see gambling as their only way out of poverty. Thus, online sports betting has inadvertently led to the introduction of other forms of gambling specifically using betting machines from china. The online sports betting industry in Kenya opened the market for the Chinese to flood the market with unstandardized betting machines to exploit the Kenyan youth who are continuously becoming addicted to betting. There are also other effects of this industry to the economy. First, there are...