By Victor Odundo Owuor
Uganda’s President Yoweri Museveni has ordered that no new licenses can be issued for established sports betting, gaming, and gambling companies. In addition, permits issued to existing firms will not be renewed when they expire.
The country’s sports betting industry has burgeoned in recent years. This has created concerns that it’s leading to severe addiction problems, especially among young people.
Museveni, his minister of finance, and other government officials assert that online sports gambling is
diverting the attention of young people from hard work.
The latest move isn’t the first time the country has taken steps to curb gambling. Two years ago Uganda’s National Lotteries and Gaming Regulatory Board introduced a 35% revenue tax on gambling activities.
Uganda is in good company. A host of countries around the world have banned gambling. In sub-Saharan Africa several countries have been grappling with similar regulatory challenges. For example, Kenya, which is the third largest gambling market in Africa after Nigeria and South Africa, introduced a 35% profit tax on gambling operators in early 2018. The tax was subsequently reduced to 15% following a strong lobbying effort by the gambling industry.
But can a case really be made for a gambling-free society?
Assessing the impact of gambling in countries on the continent is hard because the industry remains under-researched and heavily polarised. And it’s also difficult for countries to come up with policies that aren’t backed up by evidence. On top of this there’s a strong lobby defending the industry. And gambling policy affects employment, business, tourism, entertainment, social service delivery, regulation, cultural heritage, and religion.
Nevertheless, I would argue that, based on recent research there’s a strong case to be made to ban gambling because it’s rapidly evolving as a public health concern in sub-Saharan Africa, especially among young people. In my view Uganda is right to have taken action because of the industry’s negative social impact to this developing country.
A global problem
Almost all Muslim majority countries ban gambling on religious grounds. The United Arab Emirates, Kuwait, Jordan, Lebanon, Brunei, Somalia, Sudan, Egypt, Indonesia, Qatar, and Lebanon all have an official ban except in casinos.
In addition to religious reasons, gambling prohibitions are driven by concerns about money laundering, gambling addiction, and in the case of sports betting, issues around the integrity of sports. Sports betting has been the focus of quite a number of illegal activities such as match fixing, point shaving and bad calls at key moments.
Online gambling is banned in Singapore and Cambodia. Under Singapore’s Remote Gambling Act, all forms of online betting are illegal unless exemptions are granted but these are rarely issued and come with high minimum requirements aimed at limiting the amount people can spend on betting.
Albania passed a similar law to Uganda in October 2018.
Italy is considered to have one of the worst gambling problems in the world. The country accounts for only 2% of the global population but for almost 25% of the world’s gamblers. A sizeable percentage of Italians are classified as gambling addicts.
Given that gambling poses a social risk, Museveni’s ban should have received unqualified support. But it hasn’t. Major online gambling proponents such as the American Gaming Association, the Professional Golfers Association, and the National Basketball Association argue that banning sports betting, gaming, and gambling cuts off much-needed revenue. They say that gambling revenue stimulates economic growth, lowers taxes, pays down national debt, funds social programmes and provides entertainment options.
A second argument advanced against the ban is that it will simply push gambling underground. This, in turn, will contribute to an overall rise in crime, incidents of match-fixing, and significant loss of government revenue as has been documented in India and Singapore.
There’s some evidence to support this argument. In some countries people have been swindled in underground gambling markets. This has prompted Brazil, Cambodia, Russia, China, Slovakia, Sweden, Denmark, Romania and Greece, among others, to rethink their gambling bans. These countries have made efforts to re-regulate the gambling market after initially restricting or completely banning the industry.
Determining the benefits
Two approaches are most commonly adopted to measure the effect of gambling. The first is a cost-benefit analysis, the second an economic-impact analysis.
Both approaches seek to determine the net benefits of gambling activity but they do it in different ways. A cost-benefit analysis considers the economic efficiency of gambling activity by seeking to determine all the individual costs and monetary benefits of various aspects of the activity. This type of analysis compares the costs and benefits that result from gambling.
On the other hand, an economic-impact analysis uses “multiplier effects” to determine the compound impact of gambling on economic activity including on jobs, income, operating costs, productivity and competitiveness. This type of analysis attempts to measure the net positive economic effects of gambling including any ripple effect that gambling may have on the economy.
Unfortunately, both approaches are flawed.
A cost-benefit analysis is flawed because it attempts to consider economic efficiency by quantifying aspects like stress, mental anguish, and entertainment, which are immensely difficult to value.
And economic-impact analyses fail because they pay scant attention to the real private and social costs of gambling.
This leads to conclusions that often amplify the benefits of gambling while downplaying the costs.
Perhaps the best way to determine the benefits of a gambling-free society is through the public health approach. A public health perspective allows researchers to consider the economic and social consequences of the industry.
From this perspective it’s clear that there’s a need for action. Laws prohibiting underage gambling should be rigorously enforced. But laws aren’t enough. Strategies to increase education and public awareness about problem gambling are vital.
Collaboration is needed so that social policies and effective public health intervention options can be developed.
Victor Odundo Owuor, Senior Research Associate-One Earth Future Foundation, University of Colorado