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Gambling In Africa Set To Grow Despite Stumbling Blocks

Gambling In Africa Set To Grow Despite Stumbling Blocks

Tough regulations and lack of a clear policy can only slow but not stop gambling in Africa which is on its way to becoming a multi-billion dollar industry in the next few years, a report by PricewaterhouseCoppers (PwC) showed.

Global consultancy firm, PwC, says that gambling in the main hubs of the continent has been growing, and despite a few roadblocks, the trend is expected to continue as more people accept the activity as leisure and not vice.

For a growing affluent middle class that is widely travelled, the introduction of online gambling and in some cases mobile-based gambling are acting as beacons to attract a new class of wagers.

Robert Walekwa, the chief compliance officer at Casino Malindi, located on the north coastal city of Malindi says that the industry’s growth in Africa is mainly the result of exposure.

Robert told AFK Insider that while gambling is pretty new in Africa it is becoming popular as the stigmas associated with the pastime begin to crumble.

“All that people knew was what they saw in Las Vegas,” he said.

He adds that Hollywood has romanticized as well as vilified gambling through movies such as Casablanca and Martin Scorsese’s violent orgy blockbuster – Casino.

But through time people are appreciating that it is a leisurely activity.

The industry’s growth is also being catalyzed by the influx of Chinese migrant workers who are operating across various African cities and as expected, becoming frequent visitors to casinos he adds.

Import-driven growth is also coming from Italian and Israeli tourists who have adopted some towns as their African Rivieras.

Malindi’s casinos first grew from Italian patrons who have grown fond of the town in recent years to the point where some road signs and shops are now in Italian.

Italian connection

Operators love them as they are big spenders.

“They either win big or lose big,” says Robert.

But is it only exposure that is attracting customers to the “harmless vice” as iconized by Don Corleone, the protagonist in the 1972 class, “the Godfather.”?

Sociologists say that the gambling is only a piece of the large mosaic that is Africa’s consumerism in the 21st century.

Dr Halimu Shauri, associate professor and the chairman department of social sciences at Pwani University College says that the growth of casinos, streaming of fast food chains and the erection of glitzy shopping malls are all the result of the attractiveness of Western culture.

Shauri says that Africans, especially the youth, will hang out at these places as this is what the fad is.

“You cannot just drink a beer at some jua kali (shoddy) place it has to be at a casino, even if you sip on the same beer for three hours,” Dr Shauri told AKF Insider.

The message is that if you shop in malls, then carry takeaway from KFC or Subway (both of which have set up outlets across the continent) and enjoy your tipple either playing poker or black jack you are savant and not shady.

Be it exposure that portends huge growth or a fad that will deflate hopes for the industry making a boon, one fact is that the industry is making handsome returns.

PwC says that South Africa, Nigeria and Kenya are markets that have shown the industry’s continued growth, albeit it through different paths i.e. earnings from sports betting, bingo and slot machines have been different in each of the three markets.

Bingo!

Bingo, as an example, has been a hit in South Africa after some provinces, the US equivalent to sates, approved the activity.

“Despite a slowing economy, gambling held up very well in South Africa in 2012. Gross gambling revenues posted their largest annual increase over the past five years, with bingo gross gambling revenues rising by 86 percent,” said PwC.

Overall the gaming industry in South Africa, the continent’s largest market, is estimated to have made $2.06 billion in 2013 and is poised to make about $2.27 billion this year.

Nigeria is another market, while smaller than South Africa, is worth looking at by any investor.

The country is the continent’s most populous country and is awash with petro dollars, some of which will go towards construction of hotels which are catering for the growing middle class as well as the influx of business travelers.

Estimates are that the industry will rake in $66 million in the next three years growing at an estimated 16.7 percent annually.

The same can be said for Kenya, which being the gateway to the conducting business on the continent, is also poised to become even bigger as more mineral resources start being exploited in the region.

PwC’s data shows that between the two powerhouses in the west and east Africa region, Nigeria and Kenya, have between them around 1,000 slot machines and less than 200 game tables.

The two regional hubs have a combined population that is close to 200 million.