FEATURED STORY

Gamble gone bad for Pambazuka lottery?

Share
Share

[dropcap]I[/dropcap]n gambling, being a game of chance, it’s mostly the players who find themselves holding the short end of the stick. Yet in one of those rare stories of this game of chance eating its own mother, a national lottery has had to bite the dust and close shop.

The Pambazuka National Lottery (PNL) on 7th January 2018 suspended operations in Kenya, citing a punitive taxation regime that came into effect this year, but some analysts point to low take-up of tickets as the main reason, as most Kenyans prefer sports betting which has been earning millions for winners, including old women in villages.

According to Pambazuka lottery management, prior to January 2018, operations had been based on a 55% pay-out and the imposition of a 25% tax devoted to charity as per regulations. The effect of the 35% tax on all tickets sales from 1st January, they said in the closure announcement, is that the total cost of operation rises to 115%.

“This is before the deduction of all operational costs,” the statement said. “Operating any lottery under this framework is not possible and therefore business operations are forced to close.”

RELATED CONTENT
> An expert explains how to make sure bets
> Top betting companies in Kenya you must know

The lottery closed after the national draw on the night of Sunday 7th January 2018 at 7.30pm, “until a sustainable regulatory framework is in place for the lottery industry.”

The lottery, owned by Bradley Ltd, was launched in July 2016 at a colourful ceremony beamed live on NTV. Speaking at the launch, Mr Hussein Mohamed, CEO Bradley Ltd, described the PNL as a “never-been-seen before brand in the market.” After facing the hard reality on the ground – a conspiracy of tax and stiff competition for people’s wallets from the likes of SportPesa and Betway –Mr Mohamed would find these words a little bitter to swallow.

One of the lucky winners in the Pambazuka National Lottery gets his prize.

Its model of “providing revenue-generating entertainment through the sales of an innovative product that will generate both social and economic benefits to Kenya”, sounded funky and was well hyped. The launch, for instance, was a masterpiece with a lineup of artistes both local and international, including Tanzania’s King Kiba, Uganda’s Radio and Weasel, STL, Redsan among other local acts.

ALSO READ: The 31-year-old Kenyan who makes Sh20 million in  bad month

The management said Pambazuka National Lottery said all prize claims after the 7th January 2018 draw will be paid out to winners directly or from the company offices until 7th April 2018.

Others are bullish

Even as Mohamed and his team lick their wounds, sport betting companies are donning a brave face, arguing that higher taxation would not ruin their [dropcap][/dropcap]game. Betway Country manager Wanja Gikonyo said gambling firms and the government would hold talks and reach an amicable solution. The companies have protested against higher taxation of 35 per cent of their profits.

SportPesa withdrew its sponsorship of local sports teams in protest and others have threatened to pull out. SportPesa CEO Ronaldo Karauri, on January 2, said getting out of sponsorships would save the company about Ksh600 million.

“The tax issue is a concern for Betway and the industry at large,” Ms Gikonyo said. “We are in talks … we will see how things will turn out.”

SEE: Four popular drinking joints face closure
Written by
BT Correspondent -

editor [at] businesstoday.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow Us

Related Articles
Treasury CS John Mbadi
FEATURED STORY

Understanding Tax Amendment Bills: How The New Laws Will Affect Kenyans

The government has announced several amendments to the existing tax laws to...

Prime Cabinet Secretary and Cabinet Secretary for Foreign & Diaspora Affairs
FEATURED STORY

Inside Kenya’s 60 Years of Diplomatic Journey

Kenya is set to commemorate 60 years of diplomacy this week starting...

Jubilee Insurance
FEATURED STORY

Jubilee Health Insurance, Its CEO Njeri Jomo Feted

Jubilee Health Insurance has been awàrded Organization of the Year at the...

Safaricom CEO Peter Ndegwa
FEATURED STORY

Safaricom’s Impact On Society Grows 16 Times In 6 Months

Safaricom’s impact on society grew 16 times in the six-month period ending...