Various forms of gambling are becoming a phenomenon across the African continent and Kenya has been no exception in the frenzy. In light of the growing global gambling and gaming trend, and the emergence of newer and more complicated versions of gambling, particularly online gaming, there has been increasing concern on the legal regulatory framework on gambling in Kenya. The overriding aim has been to strike an ideal balance between the positive aspects of the gambling and gaming sector and its potential negative effects.
The legal regulatory framework on Gambling in Kenya
Overall, gambling and gaming activities in Kenya at both the national and county levels are governed by the Constitution of Kenya, 2010 (the “Constitution”). Besides the Constitution, the Betting, Lotteries and Gaming Act, Chapter 131, Laws of Kenya (the “BLGA”), is the overriding legislation governing gambling and gaming activities at the national level. Additional regulation at the county levels is through county specific legislation where this currently exists.
Administratively, gambling and gaming activities are controlled by the Betting Control and Licensing Board (“BCLB”) established under the BLGA. The BCLB, in turn, administratively falls under the Ministry of Interior and Coordination of National Government (the “Ministry”).
Proposed new developments
On 1st April, 2019, following a meeting with the officials of the BCLB and the other stakeholders in the Kenyan gambling and gaming sector, the Cabinet Secretary (Minister) in charge of the Ministry publicly announced various proposed measures and changes in the regulatory framework of the gambling and gaming sector in Kenya.
In making the proposals for the changes the Cabinet Secretary expressed concern that the legal regulatory framework for gaming and gambling in Kenya is currently inadequate and needs to be completely overhauled. The Cabinet Secretary singled out the need to, for instance, protect young people and the poor who are predominantly involved in gambling and gaming in the country.
A summary of those proposed changes and measures announced by the Cabinet Secretary are as follows:
- that there is a proposed gambling and gaming policy to be issued by the Ministry together with a Bill that will soon be introduced in Parliament for consideration in relation to new statutory regulation of gambling and gaming activities once consultations are finalised and input is sought on these from the BCLB and the sector players;
- issuing directions to the BCLB and the Communications Authority (mandate to ensure that advertisements by licensed broadcasters are not deceptive or are not repugnant to good taste) need to jointly review the advertisements for gaming and gambling activities being made in Kenya;
- issuing directions to the BCLB in conjunction with the department of immigration services to document all the agencies involved in gaming and gambling activities and evaluate the immigration status of the foreigners involved in these activities; and
- expressing concern that the taxes received from the sector in the year 2018 were approximately 2.5% of the total revenue from the sector in that year, the Cabinet Secretary also directed that all gambling and gaming licenses will stand suspended with effect from 1st July, 2019 except licenses for those players who will be satisfy the BCLB that they will have fully complied with their tax obligations and the law.
The Cabinet Secretary also indicated that there will be a further meeting in about 30 days’ time between the representatives of various government agencies including the Ministry, the National Treasury and the Communications Authority, among others, and the industry players to get their views on the operations and the running and of the sector.
The Cabinet Secretary alluded to the Ministry’s vision for a “clean reformed and organised” gambling and gaming sector in Kenya. He also promised a raft of changes in the sector in the coming days.
We, therefore, anticipate that there will be significant legal regulatory and administrative changes in relation to gambling and gaming activities in Kenya and industry players and stakeholders will need to track these to ensure compliance with any changes that may be effected or, where necessary, proposed.
It may also be helpful for industry players and stakeholders to participate in the proposed sectoral engagements between the Government and sector players to give their input in the anticipated legal regulatory review process. This will be beneficial in helping them anticipate and prepare appropriately for the expected changes.
Kenya, alongside Nigeria and South Africa, is one of the largest online gaming/betting markets in Africa. In Kenya, the popularity of online gaming is fueled by a high affinity towards sports and technology, particularly by the youth. This is combined with the ease of access and the convenience of using mobile phones as tools for online gaming.
In Kenya, the increase in online gaming activities has presented new legal and administrative challenges in the sector. There has, as a result, been increasing concerns on the adequacy of the current legal regulatory framework to control the sector particularly in light of the potential negative effects of online gaming such as addiction among the youth.
Administratively, gambling and gaming activities are controlled by the Betting Control and Licensing Board (“BCLB”) established under the Betting, Lotteries and Gaming Act, Chapter 131, Laws of Kenya (the “BLGA”). The BCLB, in turn, administratively falls under the Ministry of Interior and Coordination of National Government (the “Ministry”).
In recent weeks, there have been increasing administrative directions from the Ministry and the BCLB. On 1st April 2019, the Minister in charge of the Ministry publicly announced various proposed measures and changes in the regulatory framework of the gambling and gaming sector. The measures were the proposal for the introduction of a gambling and gaming policy, introduction of a bill in Parliament for consideration to repeal the BLGA, directions to the BCLB to review the advertisements for online gaming activities made in Kenya and the directive to the BCLB to document all the agencies involved in gaming and gambling activities and ensure that they have complied with Kenyan immigration and taxation laws. It will be interesting to see how these measures will change the sector in the coming weeks and months.
Perhaps following the Minister’s directions, the BCLB issued a publication dated 30th April 2019 on the advertisement of betting, lottery, gaming and prize competitions (the “Notice”). In the Notice, the BCLB acknowledged the potential negative effects of gambling and gaming and banned the following:
- outdoor advertising of gambling;
- advertising of gambling on all social media platforms;
- advertising gambling between the hours of 0600 hours and 2200 hours; and
- endorsements of gambling operations by ‘celebrities’
The BLGA does not currently specify which media can be utilised for the advertisement of gambling and gaming products and how such advertisements are to be done. While the BCLB as the regulator has wide powers under the BLGA, it is arguable whether the BLGA gives the BCLB such blanket powers to issue the directives issued in the Notice. The BLGA only appears to expressly give the BCLB powers to issue licenses and permits, cancel or suspend them and to inquire into complaints against licensees and permit holders.
We anticipate that there will be heightened debate by industry players on the legality and the extent to which the Notice will be applied and enforced. It is arguable whether the Notice applies or can be enforced in relation to advertisements on pay television channels that ordinarily broadcast from outside Kenya and to internet-based advertisements on websites that are not hosted in Kenya. This directly relates to the legal position of providing online gaming from remote locations to Kenya-based punters.
We are not aware of any review court proceedings that have been lodged in court in relation to the administrative directives issued by the BCLB in the Notice. In the intervening period, pending any alternative decision of a court, it will be imperative for industry players to make plans to comply with the directives of the BCLB in the Notice on or before the deadline, 30th May 2019.
In light of the administrative directions in the gambling and gaming sector in recent days, we anticipate that there will be further significant legal regulatory and administrative changes in relation to gambling and gaming activities in Kenya and industry players and stakeholders will need to track these to ensure compliance with any changes that may be effected or, where necessary, proposed.