Last Monday, the Minister of State for Finance in charge of Planning, David Bahati was quoted saying a ban on gambling was looming because sports-betting companies had diverted the attention of youth from hard work.
A day after, Finance Minister Matia Kasaija, came out to say this wasn’t going to be a blanket ban, but one aimed at foreign firms whose profit repatriation was hurting Uganda’s economy. As we wait for the two colleagues to make up their minds, here is why they are likely to say they were misquoted and will definitely not ban gambling.
Gambling, particularly sport betting, could become the biggest economic activity in Uganda within a few years and my conviction is backed up with this illustration.
There are 20 million mobile phone users in Uganda. If 10% of them picked their phone and placed a shs 2,000 one-two bet, and half of them won, Government would earn a total of shs 1.8bn in withholding tax from the winners, and income tax from the betting companies.
Obviously, this assumes all winners are responsible citizens with TINs and all companies are registered with the National Lotteries and Gambling Regulatory Board.
The market reality though, isn’t as naïve or conservative. To start with the odds are never that simple. And then when it comes to the actual volume of betting transactions my guess is as good as yours.
Many Ugandans place bets with foreign unlicensed online gaming sites without any fear of prosecution, while a lot more bet on a daily, in the multitude of betting shops whose distribution model, Coca Cola would approve of.
So, my example is easily one of the tens of transactions, registered or otherwise, that occur daily. We could be talking a total addressable market worth trillions of shillings and Government appreciates this. Government, therefore, has no intention of banning an industry that has the potential to lend double-digit growth to tax revenue.
Instead they are struggling to figure out how to how to close the gap between this potential and their revenue earning realities and how to maintain regulatory authority, all without sending the entire industry underground. The finance ministry isn’t spoiling for a fight, it is crying out for help.
But considering that betting is taking place in an economy that is unable to offer alternative earning opportunities to its bulging population, or that we have become a nation of educated derelicts and over-night millionaires, one gets to appreciate why gambling and its promise of instant gratification has become a logical choice. So, let us first of all admit that we now live on a roulette wheel that is always spinning and we are unable to stop it and ask to jump off.
Then we can move on to reconfiguring our society into one which isn’t increasingly reliant on this unmeasurable and unmanageable activity.
And for this, government will require help from our homes, schools, and businesses. If this isn’t what the two finance ministers are crying out for, at least it’s what they need.