GA chief stimulates economic growth through gambling licenses
Before he could hardly settle into his cushy position as substantive Chief Executive Officer (CEO) of the Gambling Authority; Peter Kesitilwe rolled out an aggressive licensing spree that is meant to stimulate Botswana’s tourism industry and position the country as a major player in Africa’s budding online gaming and gambling industry.
In November last year, the Authority received a resounding response to its request for applications for bookmaker and totalisator licenses. This past week, the Gambling Authority headquarters were a hive of activity as would-be operators submitted applications for gambling establishment licenses and gambling machines licenses for Route Operators, Site Operators and Independent Site Operators.
According to Kesitilwe, the strategic move is aligned with global gaming and gambling trends, which point to online as the new industry hot spot, buoyed by technological advances and widespread internet connectivity. “Online gambling and gaming have revolutionized the industry because they offer convenience, enhanced security, accessibility and a variety of choices. People can entertain themselves from anytime anywhere. However, we must always approach gambling with caution. Online gaming offers convenience in that regard because it can help us easily trace problem gamblers,” said Kesitilwe.
His sentiments were confirmed by global statistics, which point to a continuous decline in offline gambling revenue. When presenting a paper on ‘Gambling as a branch of the economy,’ the Georgian Gambling Association revealed that global revenue from online gambling increased from USD 6.5 billion in 2003 to USD 80.81 billion in 2022. Comparatively, revenue from offline gambling has been on a downward spiral from USD 358billion in 2015 to USD 295 billion in 2022. It is not only Botswana that is responding to these global trends, as countries like Brazil, the largest sports betting market in Latin America, are also coming to the party. Spurred by a rapidly growing middle class, high internet penetration rates, a vibrant sports sector and dedicated gambling reform, Brazil lifted a 70-year ban on sports betting in 2018 and finalized regulations in December 2023.
According to LSports – a real time global sports betting data provider – Brazil is set to reap huge benefits from taxes and fees for sports betting; including 30million Lira for a five-year license, 12 percent taxation on the operators’ gross gaming revenue and 15 percent tax levy on the bettors’ net prize. The law in Brazil also dictates distribution of revenue generated from gambling to various sectors such as Ministry of Health for prevention of social harm arising from gaming, civil society and federal entities, public safety and education. The bulk of revenue generated from sports betting and i-gaming will go to sports (36 percent), tourism (28 percent) and public safety initiatives (13.6 percent).
All licensed sports books are expected to maintain a physical presence in Brazil. Authorized operators must have a local as a board member holding at least 20 percent of the corporate capital in the country. According to Kesitilwe, Botswana is also moving in the same direction, as the Gambling Authority is committed to enhancing citizen participation by diversifying its product offering so as to create opportunities for direct economic participation of citizens, new entrants, and Small, Medium and Micro Enterprises (SMMEs).
“Apart from the fact that we want to guard against excessive concentration of ownership and control of the industry in few companies; we also want to promote economic inclusion by increasing the participation of women, youth and people living with disabilities. We want clear commitments to citizen economic inclusion, skills transfer and training, preferential procurement, employment and SMME development,” said Kesitilwe.While online betting has been growing rapidly in Europe, Australia and South America, such growth has not been experienced in Africa where the revenue generation ratio stands at 19.1 percent online compared to 80.9 percent for offline. As a result, Africa only contributes one percent to global online gaming revenue while Europe dominates at 53 percent.
However, Africa’s low online gaming statistics have not dampened the appetite of gaming and gambling industry players. With its population of about 1.4 billion mostly young people, coupled with robust economic expansion and major investments in technology; Africa is widely viewed as the industry’s growth epicenter. Botswana will not be left behind.