With tax revenues plummeting due to the ongoing COVID-19 crisis, the Kenyan government has once again targeted the country’s betting industry with a punitive tax.

Treasury Cabinet Secretary, Ukur Yattani, has reintroduced the eye-watering 20% excise duty on wagers that had been abandoned in July last year after causing betting operators, including SportPesa and Betin, to withdraw from the market – triggering a financial crisis for the country’s sports clubs.

At the time, betting operators and sports clubs depending on betting sponsorships, argued that the nature of the tax showed the Kenya Revenue Authority (KRA) had no real understanding of gambling, even at the most fundamental level. Despite this, the KRA stubbornly refused to budge for months, and at one point suspended the licenses of 27 sports betting operators. 

However, with the Kenyan economy taking an unprecedented hammering from the COVID-19 pandemic, the government appears desperate for any source of revenue and is once again ignoring the long term viability of its sports industry. 

In response, Kenya’s two biggest football clubs, AFC Leopards and Gor Mahia, have released a strongly worded statement opposing the new tax, saying: “The enactment of the 20% excise tax will unequivocally rule out continued sponsorship of football clubs across all tiers (National Super League, Division 1 and County Leagues), with the net effect of rendering the operations of most of the league teams unsustainable. The tax proposal is ill-timed and makes a strong appeal to the government and members of parliament to make special considerations on this exigent matter and give the sports fraternity a fighting chance during these difficult times.”

The chairman of both clubs pointed to the fact that betting operators have ploughed Sh1.6bn (approx. $14.8M USD) into Kenyan football between 2016 and 2020 – indeed, BetKing is currently the main sponsor of the country’s Premier League. . 

AYO.NEWS says:

As we’ve seen in other countries, in times of crisis, the gambling industry is seen as an easy target by politicians who are desperate to detract attention from their own incompetence. 

It’s quite clear to anyone capable of basic maths (so, that rules the KRA out), that a 20% tax on wagers will make the market unviable for most operators. This will cause operators to abandon the market, clubs and leagues to lose sponsorships, and bettors to turn to the unregulated black market. 

The end result: less tax revenue for the government, insolvent sports clubs and leagues, and no protection for punters. 

Smart move Kenyan government, real smart.

Last year India banned PUBG Mobile, now it seems neighbouring Bangladesh may be about to upstage that by banning both PUBG Mobile and Free Fire. 

While India banned the hugely popular PUBG Mobile because of its links to China, it seems the Bangladeshi government is concerned about the addictive effects of it, and rival battle royale title Free Fire, on young people. 

According to AFK Gaming, which references local publication Daily Manab Zamin, the Bangladesh Telecommunication Regulatory Commission, Ministry of Education, and Ministry of Home Affairs have all called for the games to be banned. Apparently, bans have also been discussed by a Parliamentary Standing Committee, and the Bangladesh Mobile Phone Users Association. 

Emphasising how concerned the Bangladeshi government is about the effects of the battle royale games on youngsters, it has said it will also try to eliminate the option of getting around any ban by using a VPN. 

The news comes shortly after Free Fire publisher Garena launched a dedicated server in the country to cope with demand.

AYO.NEWS says:

This is a tough one. While Krafton managed to address Indian concerns by distancing itself from Tencent and investing in a dedicated Indian spin-off, Battlegrounds Mobile India, it’s difficult to see how publishers could do anything to mitigate a ban driven by addiction concerns. 

Of course, although losing access to Bangladesh, with its population 163 million, would be painful for both Krafton and Garena, the bigger fear will be that any Bangladeshi ban inspires more countries to follow suit.

Just one day after Norwich City FC announced a sponsorship deal with Malta-based, Asia-focused gambling operator BK8 Sports, fans are revolting. 

The crisis, which already has people drawing parallels to the 1xBet scandal that caused major headaches for fellow Premier League clubs Liverpool, Chelsea, and Tottenham Hotspur in late 2019, BK8 has been found using sexually explicit marketing content on its official social media accounts.

In an attempt to calm fans, Norwich City says it has made sure BK8 has removed the explicit content, but also added that BK8’s approach does not “align with the wider vision and values” of the club. Furthermore, Norwich City has said it will be reviewing its due diligence process. 

BK8 issued an apology to fans, saying: “BK8 would like to wholeheartedly apologise for any offence caused by our historical marketing. We accept this form of marketing isn’t befitting of a Premier League partnership. We have immediately removed all marketing material of this nature and will conduct a review of our marketing strategy moving forward.”

AYO.NEWS says:

It completely beggars belief that we are still getting major football clubs and esports organisations signing big money deals with the likes of BK8 and 1xBet. One can only assume those tasked with due diligence were either under the influence or have never been introduced to Google. 

Illustrating that it isn’t just a football problem, earlier this year major esports tournament organiser ESL announced a partnership with 1xBet – the very same gambling operator that caused the issues for Liverpool, Chelsea, and Tottenham Hotspur in 2019. 

Ukraine-based WePlay Esports also recently discovered how damaging skimping on even the most basic due diligence can be, when both Warner Bros. Interactive Entertainment-owned NetherRealm Studios, and Bandai Namco Esports, cut ties with the tournament operator due to its partnership with 1xBet. 

And, its probably best not to even mention BLAST and Riot Games’ misguided, and extremely short-lived deals with the devil (Saudi regime). 

Regarding the Norwich City/BK8 Sports deal – we predict it’s dead in the water.

The UK government’s Department for Digital, Culture, Media & Sport (DCMS) has appointed Malcolm Sheehan QC to lead its independent review into the collapse of BetIndex, the operator of Football Index. 

Sheehan will be looking into the apparent regulatory failings surrounding the crisis that allowed the football trading platform to collapse in such a dramatic fashion, causing thousands of customers to lose substantial sums of money – estimated to total around £90M GBP. 

Investigators will be looking at the period from September 2015, when the UK Gambling Commission (UKGC) granted BetIndex a license, until March 2021, when the UKGC revoked that license. 

As previously reported, serious questions have been raised as to how much the UKGC really understood Football Index’s business, with some accusing the regulator of negligence. Sheehan will also be looking at the role other regulatory bodies played in monitoring the platform.

In a statement, DCMS said: “The review will examine the actions of the Commission in assessing, licensing and monitoring the operator. In addition, the review will examine the actions taken by the Financial Conduct Authority in determining whether the product should be regulated under the Financial Services and Markets Act.

“Alongside any lessons learned for the regulators, the report will feed into the government’s ongoing Gambling Act Review. The government intends to publish a white paper following the call for evidence on the Gambling Act Review before the end of the year.”

The investigation is independent from BetIndex’s administration process, which is being managed by Begbies Traynor.

Spillemyndigheden, the Gambling Authority of Denmark, has amended regulations to allow online licensees to utilise IT equipment based outside of the country. 

Previously, online gaming licensees had only been permitted to use IT equipment located in Denmark itself. However, the new rules, which came into effect on 30 May, mean licensees will be able to use equipment based internationally.

Although any equipment will still be subject to approval by Spillemyndigheden, the regulator has said it may “dispense with the requirement of remote access, if the gambling operator holds a licence to offer gambling in another country, where a public authority monitors the licence holder’s provision of gambling products and this supervisory authority has entered an agreement with the Danish Gambling Authority about the supervision of the licence holder’s provision of gambling in Denmark.”

The change should help make the Danish online gambling sector more attractive for operators, who will be able to take advantage of more competitive technical solutions. 

Staying with Spillemyndigheden, in March the regulator received court approval to block a record 55 illegal websites. 

The mastermind behind Sweden’s draconian emergency gambling restrictions, Minister for Social Security Ardalan Shekarabi, has been found to have made “unfounded” comments to secure support for his policies. 

As reported at the time, Shakarabi claimed that evidence suggested the pandemic would significantly increase the amount of online gambling, and exacerbate problem gambling. 

He used this as justification to get extreme restrictions implemented – despite determined opposition from the industry, which argued the measures would be counterproductive, and drive people to unlicensed black market operators. 

The emergency restrictions, which include strict deposit caps and severe limits on bonuses, have been extended several times at the behest of Shekarabi and his supporters. They are currently due to be in force until 14 November 2021.

However, the Riksday’s Constitutional Committee has judged that Shekarabi’s comments were “unfounded”, saying: “It has become clear that the Minister has based his statement on information that does not allow for a definite conclusion as to whether gambling had increased or not.”

Responding to the Committee’s findings, Secretary General for the Swedish Trade Association for Online Gambling (BOS), Gustaf Hoffstedt, said: “Everyone has known that there was no basis for the statement about the alleged increased online casino gambling. It is welcome that the Riksdag’s Constitutional Committee now confirms that. Ministers must have a basis for their statements; it is not enough to say things just because it fits into the policy you want to pursue.

“The Minister’s statements about the alleged but unfounded increase in online casinos during the pandemic are the main reason why this form of gambling is still subject to very strict temporary restrictions. The next step must reasonably be for the government to quickly end these restrictions,”

AYO.NEWS says:

Since the very start of this saga, we’ve maintained that Shekarabi was using the COVID-19 crisis as an excuse to pursue an ideologically motivated political campaign against the gambling industry, and that his claims and arguments were entirely baseless. 

Let’s hope the industry now acts with one united voice, and demands not only that restrictions be removed immediately, but also that Shekarabi is held accountable for his actions.