The sports gaming industry will continue to add economic value despite ongoing challenges

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By Ronald Karauri

The global sports gaming industry has in the recent past been plagued by massive tax hikes. Operators have resorted to innovation to cushion the sector from the negative impact of increased taxation thereby continuing to create jobs, develop skills, sponsor sports teams and make other significant contributions to the economy. The world of sports gaming has existed for many centuries, with the first recorded instances dating back to the Greeks and Romans who watched and bet on the outcome of cockfights, bare-knuckled boxing, ancient Olympic Games and gladiator fights.

Kenya’s betting laws were established in 1966 with the Betting Lotteries and Gaming Act as the governing regime and the Betting Control and Licensing Board as the regulator, mandated to issue licenses and enforce regulations in all sectors of the industry.

Since its legalisation in many countries, the online sport gaming industry has experienced tremendous growth, surpassing horse racing and coming in second to casinos, leading to a rich source of revenue generation for many economies.

Due to the financial growth of this sector and increasing rates of consumer participation, governments across the world have begun to impose tougher regulations and higher taxes.

While this may indeed have an adverse impact on some gaming organisations, most are learning to adapt as there are many growth opportunities to explore.

Adding value all-round

Since 1992, sports betting outside Nevada has been largely illegal in the United States, yet a 2017 Oxford University report found that the legalisation of sports gaming would contribute between $11.6-billion and $14.2-billion to the gross domestic product on an annual basis, depending on which states legalise it and their specific tax rates.

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A legalised sports betting system would also create 125,000 to 152,000 jobs, paying roughly $6-billion to $7.5-billion in annual salaries.

During May 2018, the U.S. Supreme Court acted to bust Nevada’s monopoly on legal sports betting, allowing more states to get in on the action and reap the tax benefits.

In the world’s most open online sports gaming market, the United Kingdom, the mobile gaming industry has more than doubled in the past five years.

Technological advances such as smartphone apps make the experience far more convenient for the consumer while increasing revenue for companies and supporting the fast-growing tech industry, which has to stay ahead of the mobile engagement curve.

Online sports gaming makes it easier to scrutinise odds and compare offers before making a bet, putting power in the hands of those playing. Importantly, odds are updated in real time, ensuring that you can play as events take place in real time. Though not many firms have the technology or the expertise to provide live betting services. However, a review of Bet9ja online shows that the platform gives its clients hundreds of in-play betting and its live-betting capability enables its clients make more informed predictions.

Sports gaming companies also sponsor local teams and provide an opportunity for players to gain exposure in their communities besides boosting national and regional leagues.

Tackling the challenges head-on

The rapid advancement of the Internet and information technology has enabled people to access information and related services anytime, anywhere. Ultimately, this empowers the sports gaming industry to offer services in-line with consumer expectations.

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The strict governance of this industry locally and abroad ensures that all content that is shown on TV has been approved and that all mobile offerings are up to standard to ensure they operate correctly, and do not deviate from desktop versions of the parent website.

Keeping up with evolving regulations and technological compliance requires constant investment and for this reason, increased taxation on the sports gaming industry can be challenging if businesses are not progressive enough to adapt to these regulations.

Recent increases in taxation of sports gaming in countries such as Kenya make the overall sustainability of the industry more difficult.

However, this is a sector built on adaptation and perseverance with the capacity to develop creative solutions to ensure this form of entertainment continues to be accessible, affordable and convenient for as many people as possible.