TRUE Africa

Is SportPesa’s sponsorship of Hull City a good sign for the African betting industry?

The English Premier League new boys Hull City recently unveiled their new kit for the upcoming season, revealing SportPesa – a Kenyan sports-betting company – as their new sponsor, in a multi-million pound deal.

The Yorkshire club which recently regained promotion back to the English top flight described the deal as ‘the most lucrative in the club’s proud 112-year history’.

Contractual elements of the deal require the Tigers to play a select team in Kenya, as part of SportPesa’s strategic objective of ‘contributing to the sustainable growth of a number of sports in Kenya’.

This ground-breaking deal also places SportPesa as the first African sports-betting company to sponsor the kit of a team playing in the EPL.

SportPesa becomes one of 10 online games and sports-betting companies to sponsor teams in the English Premier League, joining the likes of bet365 (Stoke City), Betway (West Ham) and BetEast (Swansea) in offering lucrative deals to EPL clubs in exchange for real estate on their match-day kit. This ground-breaking deal also places SportPesa as the first African sports-betting company to sponsor the kit of a team playing in the EPL. Not a bad feat for a company which only launched back in 2014, and whose CEO Ronald Karauri is reported to have swapped his career as a pilot for running a multi-million dollar company. Estimates place SportPesa’s monthly revenue in excess of $10 million a month.

 

 

It is this meteoric rise by SportPesa in the space of two years that continues to drive more entrants into the rapidly growing sports-betting market in Africa – ably supported by the availability and affordability of internet and smartphone technology. These betting franchises can now be found in many municipalities across the continent, as sport enthusiasts gamble on the hope of striking lucky.

Meanwhile, clever marketing by the companies, coupled with minimum bets which can be as low as the equivalent of £0.2 have fuelled risk taking, as the perceived loss from gambling appear tolerable. However, that is not always the case. Seemingly small bets placed religiously can lead to addiction and frustration, a toxic mix, on a continent already grappling with widespread unemployment.

It should be noted that sports betting is not a new phenomenon in Africa. For years, many have wagered on the outcomes of sporting events informally at neighbourhood beer parlours and among friends. The only difference now is that the process of placing bets and realizing winnings has been taken online.

In simple terms, it has never been this easy to place a bet on a sporting event in Africa.

It would be useful for more stringent regulation to be introduced around free bets, which acts as the candy in the store to draw in the crowds.

Many unfortunate incidents have been recorded across the continent as a caution to the negative consequences of sports betting. For example, in Kenya, it was reported that Kennedy Kosgei hung himself from a tree having lost his bet on a Spanish La Liga game. Another man not only lost his bet, but also suffered heartache as his wife left him, having gambled away a huge sum of money on a bet… and one placed at SportPesa.

It is against this backdrop that regulators in Africa need to take steps to monitor the frequency of bets placed by punters, and possibly introduce checks such as those used in the United Kingdom in which individuals can impose ‘self-exclusion’, barring themselves from being able to place bets with specific betting houses. It would be useful for more stringent regulation to be introduced around free bets, which acts as the candy in the store to draw in the crowds.

Its growth story also nevertheless presents an opportunity for employment, innovation and – more importantly for governments – revenue.

Despite the moral conundrum presented by the sports-betting industry, its growth story also nevertheless presents an opportunity for employment, innovation and – more importantly for governments – revenue. Yes, more needs to be done by the corporate social responsibility (CSR) programmes of sports-betting franchises to ensure that they ‘give back’ to the communities in which they operate. But regulators also need to clamp down on the deceptive glamour often portrayed by adverts for the industry.

In its 2015 outlook for the gambling industry in Africa, PwC estimates that sport betting revenue in South Africa; Africa’s largest betting market, will outpace bets on horseracing by nearly 10 per cent in the period 2015 – 2019, with similar trends expected in Kenya and Nigeria. Conferences such as the recently concluded Sports Betting West Africa Summit held in Accra are therefore crucial to ensure the sustainable development of the industry.

Hopefully Africa can write a different chapter for sports betting and erase the doom and gloom painted by the brush of addiction and exploitation.