Kenya has instructed Safaricom, a telecoms company, to stop processing sports betting companies ‘ payments, possibly shutting down the company’s profitable source of income.
In a letter sighted by Reuters on Thursday, Liti Wambua, Acting Regulator Director, Betting Control and Licensing Board (BCLB), informed Safaricom that licenses were not renewed for all 27 betting companies.
Mr Wambua said such payments should be stopped pending an ongoing investigation into their suitability to function in the nation.
“Consequently, we request you to suspend their pay-bills and shortcodes until otherwise advised,” Mr Wambua said in the letter.
Responding, through its attorneys, Safaricom said it needed time to carry out the order as abrupt execution would result in shutting millions of customers out of money already deposited in the multiple betting firms ‘ gaming wallets.
“The directive by the board will impact over 12 million customers,” Safaricom said.
It added that two of the gaming companies also acquired court orders enabling them to continue their activities without a renewed license, making the scenario even more complicated.
In the past, Safaricom executives told Reuters that the betting industry has become a significant part of their revenue in recent years through text messages and M-Pesa.
In the meantime, the betting companies have defended their operations.
“SportPesa is a law-abiding corporate citizen that upholds all tax and regulatory requirements,” said SportPesa, one of the biggest online betting and gaming companies.
Online sports betting firms have risen significantly in the East African country in latest years, driving a wave of sports excitement to attain 204 billion shillings ($2 billion) last year’s combined revenue.
That, however, has triggered public concern about betting’s social effect. The nation implemented fresh rules on gambling in May, including prohibiting outdoor and social media advertising.
Gaming companies depend on the market-leading network of Safaricom to make bets, interact with customers, and process payments on the famous M-Pesa mobile money platform of the company.
A distinctive number, known as a pay-bill, is allocated to each betting company that is used to process payments from customers who place bets on their mobile phones and pay off those who win.
Customers using basic feature phones depend on each betting company’s allocated shortcodes. (Reuters/NAN)