This archive report was first published on 11 July 2019.
On July 11, 2019, the Kenyan government ordered telecoms firm Safaricom to stop processing payments for sports betting companies, potentially shutting down a lucrative source of revenue for the company.
Online sports betting companies such as SportPesa have grown rapidly in the East African nation in recent years, achieving combined revenue of 204 billion shillings ($2 billion) last year. However, the government has expressed concern about the social impact of betting.
The government introduced new gambling regulations in May, including a ban on advertising outdoors and on social media. The gaming companies rely on Safaricom’s market-leading network to take bets, communicate with users, and process payments on the company’s popular M-Pesa mobile cash platform.
Each betting firm is assigned a unique number, known as a pay-bill, which is used to process payments from users who place bets on their mobile phones and to pay off those who win. Customers using basic feature phones rely on short codes assigned to each betting company.
According to a letter seen by Reuters, the acting director of the regulator Betting Control and Licensing Board (BCLB), Liti Wambua, told Safaricom that licences for all 27 betting firms had not been renewed, pending the outcome of an ongoing inquiry about their suitability to operate in the country.
“Consequently, we request you to suspend their pay-bills and short codes until otherwise advised,” Wambua said in the letter.
In response, Safaricom said it required time to carry out the order since abrupt implementation would result in shutting millions of users out of funds already deposited in the gaming wallets of the various betting firms.
“The directive by the board will impact over 12 million customers,” Safaricom said. It added that two of the gaming companies had also obtained court orders allowing them to continue their operations without a renewed licence, further complicating the situation.
