Africa Focus
Africa Focus
bets , this is one of the issues hampering further development of its regulated market , says Felix Mukaxe , gaming inspector at the Mozambique Gaming Board . He says he was forced to cancel his planned trip to iGB Live ! earlier this year due to budget issues . “ One of the constraints that we have is that we are a government department . Our gaming board is a government department , not independent , so we work with budgets which are very tight sometimes . That means we have challenges to attend conferences in Europe .”
Talking tax Nevertheless , countries such as Mozambique are increasingly becoming interested in attracting more operators to their markets due to the potential to raise much-needed taxes . “ We have taken that decision to make our market grow because before that the market was very small and it was not growing but with online gaming it is growing ,” says Mukaxe . “ We are increasing our tax revenues and another benefit is that we use part of the revenues for good causes , for social causes , so we benefit from that .”
Unfortunately , in Africa – and it ’ s worth mentioning this has also happened in more developed parts of the world – some governments get carried away at the prospect of additional revenues and end up setting tax rates too high to allow their market to thrive .
In cases such as Kenya , we ’ ve yet to see a backtracking of the punitive tax rate and Maikori says this has definitely slowed the market . “ The tax change did not only dampen spirits , a couple of people have pulled out .”
Some policymakers are more willing to listen to the sector than others , however . James Mpiirwe , board secretary at Uganda ’ s National Gaming Board , admits Uganda made the same mistake as Kenya , but says it quickly reversed the decision . “ We increased ours to 35 % as well and got a very bad backlash from the sector . It was done by parliament , misadvised and we got a backlash from the operators so we withdrew very quickly .”
The issues with setting tax are tied in to the more general lack of understanding , says Whitesman . “ Setting gambling taxes is a sophisticated exercise as it is . You ’ ve got to know what you are doing . I think it has got to be realistic and I don ’ t think that the regulators quite appreciate by and large that gambling businesses don ’ t work on as large a margin as they think they do . I think they are under the impression that all gambling businesses simply print money .”
Could operators be part of the solution ? While there may currently be a lack of understanding among some Africa regulators , Mukaxe says Mozambique , for example , is keen to learn from companies operating in highly regulated markets in Europe . “ We are willing to partner with good operators from Europe that can bring technology to Mozambique and help us to consolidate our regulation and to consolidate our market .”
Mpiirwe says that one of the reasons Uganda revised its gambling legislation in 2016 was to make the country “ more attractive to international operators ”.
“ I don ’ t think that the regulators quite appreciate by and large that gambling businesses don ’ t work on as large a margin as they think they do ”
Although enforcement of illegal operators is minimal in Africa and operators can quite easily set up unlicensed operations , Whitesman says there has been a shift in attitude in recent years and that operators themselves are now driving the move towards greater regulation . “ We have seen a change in mindset in the last five years or so . You will always get operators that will be prepared to operate in a grey and / or black environment , but what we ’ ve started to see , and I think it started with the increased state-by-state regulatory regime that started to come through in Europe , is that most decent operators are starting to adopt the mindset of being regulated in virtually every single territory that they can .”
Although the pace of change may be slower than some would like , most seem to agree that the impetus is certainly there for a substantial increase in regulation in Africa . “ I can see it is improving ,” says Ali . “ In the next five years I am sure most of the regulators will be up to date and with internet penetration also improving the prospects look much brighter .”
Whether or not the increase in regulation will drive a significant change in the number of illegal operators in the market remains to be seen , but it seems that many African regulators are at least moving in the right direction .
68 iGamingBusiness | Issue 112 | September / October 2018