Amne Suedi Kagasheki of Shikana Law Group has said the future of sports betting in Africa lies in the online realm.
Kagasheki made her comments in an interview by Jordan Crossley, conference producer of the upcoming Sports Betting East Africa Summit at Eventus International. Crossley and Kagasheki discussed the latest gambling legislation in east Africa, competitive strategies for operating in Africa, and understanding the African market
Kagasheki is the principal founder of Shikana Law Group. She is an international advocate, who counsels foreign investors, multinational companies as well as SMEs on legal issues pertaining to specific sectors in Africa. In particular, she councils investors as they develop and expand their activities across Africa.
Kagasheki is experienced in conducting high-level mediation with ministries and government agencies on behalf of her clients. She has also closed on a number of high profile and lucrative contracts in various sectors such as telecommunications on behalf of her clients. She also has experience in counselling gaming companies as they enter into the Tanzanian market on the rules and regulations as well as optimal corporate structures for their business.
Jordan Crossley: Amne, how did you first get involved with the gaming industry?
Amne Kagasheki: I first got involved with the gaming industry in 2013 where we were receiving quite a few requests from foreign investors for opinions on the regulatory environment in gaming in East Africa and particularly there was an interest in internet gaming.
So I was familiar with this from a purely regulatory advisory perspective. It was not until 2016 when I got to work with Sportpesa who were establishing themselves in Tanzania. I was their legal adviser on setting up their investment and getting them to become operational.
After the work I did for Sportpesa, the gate was open for other investors in gaming who wanted to work with Shikana Law Group, having heard about the good work we had for Sportpesa particularly in contract negotiations with telecommunication companies and other partners.
JC: You wrote an article last year about how investing in Africa requires the expertise of African advisors and experts, how does this carry over into the gambling industry?
AK: The same holds for the gaming industry. Definitely, you need advisors and experts who are able to assist you in getting a thorough market knowledge, especially the regulatory knowledge which is key in operating the business. It does not work for companies to be seeking advice from their say UK based experts who do not have an actual footprint in Africa and knowledge of the African markets.
JC: In the same article, you mentioned that each country requires individual entry strategies. What would be the best strategy for a foreign sports betting operator who is looking at entering Kenya, Tanzania and Uganda?
AK: The best strategy would be for them to first of all really understand the regulatory environment for sports betting, particularly online sports betting which is where Africa is moving towards. In a lot of markets, retail is dying or fading out.
Secondly, it would be key to understand who the competitors so that the operator establishes where and at what level they want to play in the markets.
Thirdly, it could be interesting to identify potential companies that the foreign operator can buy out or buy into since the brand equity would already be existing, consumers and customers established and it would be a question of building onto an already existing system.
Unfortunately, I do not think companies are going to enter Kenya anytime soon because of the tax amendments made recently to the industry.
JC: There have been many changes to gambling legislation in Kenya and Uganda recently with increased age restrictions and taxes, are there any chances of such changes being made in Tanzania any time soon?
AK: We often see that legislators in Tanzania often are inspired by what is going on in Kenya. There is a risk that Tanzania could adopt the same tax system as the one in Kenya – which we see is creating a big upset in the market and if it actually is implemented and adopted on a permanent basis, it could potentially kill the industry.
The problem is that the legislators often do not really understand gaming and they just look at the numbers in terms of tax collection and look at the jackpots and payouts and assume that the industry has a lot of money without really understanding how that money is made and also the cost for operation and investment, in particular why certain games are taxed the way they are.
So, this poses as a real risk for the operators already on the ground and those who want to come in. However, like I tell my clients, they need to work on educating the public, regulators and legislators on the business sooner rather than later ie when radical tax changes are made.
JC: What do you look forward to by being a part of the 4th Annual Sports Betting East Africa Summit?
AK: I am looking forward to listening to other jurisdictions’ experiences whether from a regulator perspective or an operator perspective. Exchanging best practices is always good for growth of the industry.