| NAIROBI, April 7
NAIROBI, April 7 Kenya's proposal to hike taxes
rate for online betting firms by almost seven times will
suffocate the fledgling industry and hurt supporting businesses
including telecoms and media companies, industry executives said
Finance Minister Henry Rotich proposed last week to raise
the tax rate to 50 percent of gross profits from 7.5 percent.
The tax would fund sports, culture and the arts, he said.
The rapid growth of betting in a loosely regulated
environment has hurt the young and vulnerable, he told lawmakers
in this year's budget speech.
He did not offer specific examples, but Kenyan media have
carried stories of people who committed suicide after losing all
their savings to Kenya's roughly 20 online betting firms.
"It will kill the industry," the chairman of the Association
of Gaming Operators of Kenya, Ronald Karauri, told Reuters.
Industry executives said about 7 million out of 44 million
Kenyans have registered for betting services. There is no
publicly available industry-wide figure for annual profits.
Betting has expanded rapidly since 2014 thanks to mobile
phone-based financial services like M-Pesa by Safaricom
, which allows users to deposit bets and receive
winnings on their phone without needing a bank account.
Safaricom says mobile phone-based betting was driving
revenue in its texts or short messaging services (SMS) business,
blunting the impact of free Internet-based services such as
Media companies also benefit from daily advertisements from
"Putting people who are paying tax out of business doesn't
solve the problem. You can create a black market of people
taking bets all over the place," Karauri said.
(Editing by Louise Ireland)