A lie goes halfway around the world before the truth has a chance to put its pants on. So it is said and this aptly sums up ongoing debate on the country’s gaming industry. This was clear when MP for Kipipiri Samuel Gichingi was quoted in the dailies saying he had no idea gaming companies pay tax and only recently learnt that they do when some of the industry’s stakeholders provided evidence.
Sadly he is not alone. His is a case replicated widely in the public at the expense of this fast-developing industry. There have been many outright lies told, half-truths disseminated and misinformed media reports published, such that the industry has been left highly stigmatized. However, the saddest thing about all these, is that an MP purporting to have researched widely enough on the industry before crafting a bill with far-reaching implications, is the biggest conveyor of this misinformation.
It was laughable if not painful to watch Jakoyo Midiwo blatantly lie to his fellow MPs and the public in general during the debate on the Betting, Lotteries and Gaming (Amendment) Bill 2016. As he courageously stood up to present his “facts” I noticed how skewed his presentation was to create a picture of a major crisis in the country as regards to gambling. Here are some of the fallacies:
1. Claiming the draft bill by Interior CS Joseph Nkaissery was produced in 24 hours
According to Nkaissery, the government submitted a memorandum to parliament regarding the bill on December 23, 2016 highlighting the cons of the Midiwo-sponsored bill; including a footnote that the state through the Betting Control and Licensing Board was working on its own draft which it has invested a lot of time, money and human resource on, to ensure a balanced law.
2. Betting companies are “pilferaging” from the government because they do not pay tax.
Here, the good MP seems to be privy to some information that the police or state agencies may not have. In the cases where he has seen this so called theft he speaks of, it is only fair that as a good concerned citizen that he submits this information to the authorities for action to be taken. Or else, why has he not told the authorities?
3. “Even a five-year-old child can gamble on phone.”
Surely, this is more of a parenting issue than an industry fault. It is the same way that TV programming is segmented according to availability of different audiences where the more graphic and violent content is aired late nights while family-themed content during the watershed period. It is up to parents to enforce such rules because a child cannot buy a mobile phone and register a number since he/she has no National ID.
4. “Three girls from Nakuru County were enticed to gamble school fees on way to school since one of them had a phone. They could not go back home after losing all the money out of fear of their parents and ended up cohabiting and being married by a flower seller.”
As per police and documented reports from neighbours, the school and eyewitnesses, in this particular case these girls had the intention of running away from school from the word go as they even used fake leave permits to pass through the school gate. According to Bondeni Police in Nakuru they then went to the florist’s house for a good time until neighbours noticed something was amiss and called the school – St. Marks Eldonio High- as well as the police. Again, the sponsor of the bill was caught in another lie, twisting facts in an already sad story to suit his interests.
5. “These people (gaming companies) are making more than one billion shillings per day. I can tell you because I have the facts, these companies are making more money than KRA (Kenya Revenue Authority)”
Even before I get into simple mathematics, it is very unlikely that any company makes more money than the government. But since Midiwo insists claiming he has the facts, a little data-based calculation would be important. In the financial year 2015/2016 which ended in June last year, the KRA reported revenue total of Sh1.2 trillion. Dividing that by 365 days in a year translates to Sh3.29 billion per day. Even so, it is not true that betting companies make more than Sh1 billion per day. That is a ridiculous figure which only Midiwo knows how he got it.
6. “The platform used to bet is a foreign platform”
Betting companies use local money transfer services to effect transactions with their clients. These services such as Safaricom’s M-pesa are locally hosted and create many jobs in the economy.
7. “Russia abolished gambling and betting in 1999”.
Gambling in Russia has not been abolished and the four key regions with gambling activity are Kaliningrad region), Azov-city (Krasnodar territory) Siberian Coin (Altay) and Primorie region. Last year, the government even handed a new private investor a sports betting license as it sought to have online firms set shop locally to harness taxes from such activity.
“In USA people only gamble in casinos there is no online gambling”
Midiwo who at some point in his life lived in the USA should know better than to blatantly lie in this day and age when information is only a click away. Surely, USA – home of one of the largest gambling cities Las Vegas – has not outlawed online gambling. It is only that most of the online gaming sites that gamers in USA use are hosted offshore.
“In London you can only bet within a certain radius…if you leave the set radius your phone automatically switches off the gaming app”
This cannot be further from the truth. Most of the online betting sites used in the USA and even here are UK sites such as Ladbrokes, Bet36 and betfair which can be easily accessed across the globe including here in Kenya, even though these firms have no physical presence in the country.
8. “Nobody knows who is licensing the betting companies”
Betting Licensing and Control Board still exists and is the government body in charge of licensing gaming companies in Kenya. Any entity under this industry that does not have this license is therefore illegal but someone of Midiwo’s stature cannot claim not to know who the regulator is in this industry.
9. “Kenyans are dying …gambling their lives away. Kenyans are losing their lives even at this time of hunger”
There is ongoing drought in the country surely the MP cannot blame gaming companies for this unfortunate disaster costing many lives. In addition, Midiwo claimed a man in Eldoret committed suicide after losing Sh40,000 in a bet. However, police reports say the contrary. In a letter to Media Max, one of the mainstream media houses that picked a sensational story from blogs and published it without verification, the Directorate of Criminal investigations said there was no reported death of a Kennedy Kosgei in any of the 14 counties of the Rift Valley during the dates mentioned in the story. In other words the story was made up and as is sadly the case nowadays, mainstream media picked it and republished the sensational fake news without investigating. Midiwo too picked on this and whether knowingly or unknowingly, added to the rumour mill by citing the fake report.
10. “There is a lot of tax evasion and money laundering”
Again here, the MP is talking like someone with concrete information on this, given the number of times he has repeated the claim as he pleads with his colleagues to pass the betting bill. If indeed he was sincere, why not pass this crucial information over to the police and other authorities to investigate so that the country does not lose any more revenue?
11. “There are 50,000 slot machines and income from this is not declared”
If the exact number of the illegal gaming machines in the country is known, perhaps also the importers of these machines and where exactly they are situated is information the authorities possess. Why then have these machines not been confiscated to safeguard children who may be using them in illegal dens?
12. “SportPesa gave Hull City Sh3 billion and Gor Mahia only uniforms”
As he made this unfortunate statement, Midiwo again, did not even twitch as he lied. It is in the public domain that the average annual sponsorship cost for the three-year Hull City deal is a Sh300 million, half the cost of theSh607 million sponsorship deal the company signed with Kenya Rugby Union. But since he mentioned Gor Mahia, the MP only needs to ask any of the team members who funds their payroll. He claimed in parliament that he is the ‘biggest fan’ of Gor Mahia and no one knows the team better than him. Why then would he lie about the sponsorship deal? Of course, to turn the public against the company and champion his cause!
13. “It is our responsibility to put a law especially where a billion shillings is being collected in a day”
Is the law about regulating the industry by protecting vulnerable groups and locking out illegal entities or is it about punishing legal businesses for their success? Just what is Midiwo’s real motive in all this? It becomes clear that this is a vendetta bill.
14. “Safaricom is a good company and good employer but that is all there is. It is causing loss of jobs and should be split into three companies, locally owned, that the KRA can control”
What a reckless statement from an MP! First of all, why should KRA operate outside its mandate of tax collection and venture into controlling companies? Secondly, the MP went on to further claim that these should be done after streamlining the betting industry since Safaricom is ‘foreign-owned’ with Vodafone owning “70 per cent!” never mind that it is in the public domain that Vodafone only owns 40 per cent of Safaricom but in Midiwo’s world, facts are often overlooked. And if indeed Safaricom is a good employer by his own admission why then does he have a problem with a company employing hundreds of thousands of Kenyans? What is this obsession the MP has with punishing success?
There are just few of the twisted facts I picked from the debate who knows what else has been put out there by forces hell-bent on bringing down the industry to prove a point. To make matters worse the mover of the bill is yet to substantiate any of these claims by showing proof to back his supposed facts on the industry. Even the Sh1 billion a day earning is a figure he loosely uses and the MP is the only person who knows how he arrived at this figure. Midiwo needs to read the Geopoll survey released last week that shows only five per cent of cash earned by young people is spent on gambling. Majority – 55 per cent- is spent on personal care, 26 per cent on investments while six per cent goes to entertainment.
Dear Midiwo, facts are stubborn.
(Omondi is the Acting CEO, Association of Gaming Operators Kenya)