Lotteries and Gaming: Regulating a nascent multi-billion industry through ‘partnership’

Just over two weeks ago, the two Top Bet Sports Betting outlets in the Mutungo suburb of Nakawa Division were closed.

In normal circumstances the two outlets, just less than two kilometres apart are beehives for sports betting activity, an emerging past-time for low and middle income earners in the city, municipalities and townships.

Needless to say however, the closure of the two outlets meant that the punters had to quickly find an alternative: to relocate to the two nearest sports betting shops, The Premier Bet outlets, also just about two kilometres apart.

Reason the two Top Bet outlets and those of several other sports betting companies across the country were closed? Yes, they had failed to comply with the regulations as set by the recently-launched Lotteries and Gaming Regulatory Board (LGRB), the new authority under the Ministry of Finance that is charged with ensuring that the gaming industry in Uganda is carried out in accordance with the set rules and regulations.

‘Coming into in April last year, the LGRB is mandated by law to supervise and regulate the establishment, management and operation of lotteries, gaming betting and casinos in Uganda, and to protect the citizens from the adverse effects of gaming and betting in Uganda,’ reads part of the Board’s Mission Statement.

And, according to the pioneer LGRB Chief Executive Officer Edgar Agaba, one of his topmost priorities at the Board is to ensure that all stakeholders, mostly the operators, respect ‘the rules of the game’ as enshrined in the LRGB Mission Statement.

However, he adds that this will be achieved through a working partnership that will involve constant interaction to exchange ideas on how to make the industry acceptable to all Ugandans as a recreational activity that should involve responsible spending, just like all other leisure activities.

Most gaming industry operators I interacted with at the launch at Serena Conference Centre Victoria Hall last week noted that Mr Agaba is not your ordinary ‘pick off the shelf’ administrator; he is up to the task as observed by the leisure gaming industry’s top honcho Bob Kabonero, the proprietor of the first indigenously-owned Casino, the Kampala Casino.

According to Mr Kabonero, Edgar Agaba’s management prowess was earlier exhibited when he soundly acquitted himself as the pioneer Director of the Public Procurement and Disposal of Assets (PPDA), something that makes most operators anxious to benefit from the working partnership with Mr. Agaba while at the LGRB.

It is also worth noting that the Board of Directors at the LGRB comprises Ugandans of good public standing that include among others seasoned Economist and former Minister Manzi Tumubweine, and the Criminal Investigations and Intelligence Directorate (CIID) boss Grace Akullo. Previously, Mr Manzi Tumubweine was linked to the National Lotteries Board (NLB), the precursor to the LGRB.

That said, over the past few years Uganda’s economy had improved, thanks largely to a favourable balance of payment climate that left a good number of employed Ugandans with disposable income, some of which has been channeled to gaming, notably Sports Betting.

By its very structural set up, Sports Betting in Uganda is a comparatively affordable form of social entertainment, costing the low-income punter at least 1000 Shillings. This, of course, is not to say that there are those in the low-income segment (or in the non-income generating segment like some students in upper primary, secondary and university) who get addicted to gambling, spending beyond their means and in the end become social burdens. Then there is also the issue of under-age gambling (mostly involving illicit ‘street operators’ that also attracts mostly students), an anomaly that the government, in conjunction with the LGRB, has to stamp out.

Needless to mention therefore, gaming including gambling in Casinos and sports betting is a multi-billion industry that needs to be regulated if all the stakeholders including the punters (betters); the operators and the Government are to benefit from the enterprise.

And according to Mr. Agaba, this therefore means that slips in the enforcement of the regulations should be put at a ‘heightened red’, in an effort to protect all the interested parties. For instance, he observes, that if not well regulated, an unscrupulous punter can make it difficult to claim his/her well-deserved winner’s money, something that erodes the public trust and often ends up at the police for arbitration.

Similarly, Mr Agaba says the operators may also find themselves holding the ‘wrong end of the stick’ if government does not put in place a flexible tax regime that allows for the gaming industry to grow, while the government also stands to lose billions in revenue if the operators don’t come clean on their earnings.

So, it is in important that this complimentary chain is insulated from the industry’s misgivings if all the three principal stakeholders and other Ugandans are to appreciate this new and complex multi-billion undertaking.

Perhaps, to better understand the import of investment in the gaming industry, it is worth noting that last year alone the sector, according to the Uganda Bookmakers and Gaming Association (UBGA), contributed slightly over 62 billion to the national coffers. Also, it is important to say that the gaming industry employs 5000 people, who in turn also look after an estimated 10.000 dependents in the elastic chain, and also pays rent to over 1000 owners of premises countrywide.

But the industry is also faced with challenges, with some operators taking the gaming activities deep in the rural areas where villagers are ignorant and poor and can’t afford the luxury of gambling away their hard-earned money.

“I want to emphasise that the we will only allow gaming in the city, municipalities and Town Councils,” the State Minister for Finance in charge of General Duties David Bahati said at the launch, emphasizing a point earlier stressed by Mr. Tumubweine.

The LGRB is also burdened by importers who bring in obsolete slot machines and, at the time of the launch it was estimated that there were about 400 slot machines smuggled into the country as ‘spare parts’, and assembled in Nyendo – Masaka, in the process denying the government revenue.

Nonetheless, there will always be a silver lining and at the LGRB launch, the operators, under their umbrella association, donated 15 tonnes of grain to the famine-stricken Ugandans in various parts of the country, attracting a nod of approval from all those in attendance, and lending credence to Mr. Agaba’s optimism of a ‘smooth partnership’ with other stakeholders who value the importance Corporate Social Responsibility (CSR) as a societal transformational tool to help the less privileged also attain some of their dreams.