At a time when unemployment – particularly youth unemployment – is at its highest, there have been concerns that the youth have resorted to gambling as a source of livelihood.

However, not so much empirical evidence existed to confirm these allegations regarding the level of participation and characteristics of gambling participants.

The first of its kind in Uganda, a 2015 Economic Policy Research Centre (EPRC) baseline study on Socio-economic effects of gambling in Kampala city reveals that one in every four adults (24.3 per cent) engage in gambling. The prevalence among male youths is as high as 45.6 per cent, with sports betting being the most popular gambling activity.

A substantial proportion (73.2 per cent) of those who engage in gambling took it up as a source of livelihood rather than as a leisure activity. This research stipulates that those who gamble to escape poverty are more likely to get addicted than those who do it for leisure.

Although underage gambling is prohibited under the current laws governing the industry, the study finds that minors are significantly engaged. 

The industry has had some positive impacts on the Ugandan economy in terms of tax revenue, employment and business. But there is concern that the sector has caused harm to the society in form of addiction, idleness, loss of savings and has been used as an avenue for money laundering and other crimes.

Our survey results show that expenditure on gambling has had serious displacement effects on household expenditure, with funds being redirected from household necessities and savings to betting.

In addition, time from productive activities such as work or attending school has been lost to gambling, where addicts do not have control over the amount of time and/or money they spend here, resulting in adverse effects on the gambler, their households and community at large. Worryingly, the poorest people spend more of their personal income on gambling compared to their richer counterparts. 

Regarding the adequacy and effectiveness of the current regulatory framework, the study finds that the industry is neither well regulated nor effectively policed.

Findings show that many facets of the laws relating to lottery and gaming have become obsolete and are not sensitive to the new modes of gambling and the unprecedented growth of the industry.

The regulatory body, National Lotteries Board (NLB), has capacity inadequacies (human and financial) and limited statutory powers. It is thus unable to effectively exercise its mandate, thereby inhibiting its ability to comprehensively regulate the industry.

For example, through a spot check of 48 betting outlets undertaken in April 2015, only 27 per cent of them had valid licenses displayed, 29 per cent had obsolete licenses while 44 per cent did not have any license displayed, pointing to the weak monitoring capacities of the regulatory body.

Based on the study findings, we recommend that the excessive proliferation of gambling outlets is curtailed in order to protect the public from overstimulation of latent demand for betting.

Policies should ensure that outlets are at reasonable distance from each other; for example, Spain has prevented the propagation of gambling by ensuring that outlets are at least 100 miles apart. We also need tighter restrictions on advertising and entry into gambling establishments and limitation of opening hours, among others.

More steps should be taken to safeguard minors from engaging in gambling activities, and this necessitates NLB to institute stricter monitoring controls.

Gambling outlets found in breach of the law should be held culpable and face closure. In addition, there is a need for the regulatory bodies to introduce programmes aimed at promoting responsible gambling and availing counselling services for addicts.

Parliament needs to expedite the passage of the Lottery and Gaming Bill (2013) into law to fortify the current regulatory framework which is riddled with loopholes.

This will subsequently grant more statutory powers to NLB and provide a basis for addressing the human resource capacity and financial challenges that they currently face. 

Given that gambling tax revenue collection is still below potential, it would be beneficial to embrace appropriate information technology tools that will ease the collection of tax and the flow of information on gambling activities between outlets, NLB and Uganda Revenue Authority. The author is a Research Fellow at the Economic Policy Research Centre (EPRC).

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