A study by the Capital Markets Authority has stated that Kenyan investors are shunning traditional long-term return prospects in favour of the country’s rapidly growing sports betting market.
The autonomous regulatory body compiled the Low Uptake of Capital Markets Products and Listings survey from April to June of this year, revealing that company caution over listing on Kenya’s stock market has seen investment intentions change significantly.
“The study identified the key factors leading to low product uptake,” said CMA CEO Paul Muthaura. “[These include] reputation risk exposure for potential issuers to post-offer and listing price correction following professional valuation.”
Kenya has recently seen a marked increase in firms entering the country’s sports betting industry, with Betin, Mcheza, Shabiki and Betway all increasing operations.
Mumbai-based Nazara Technologies praised the “very big market” for real-money wagering in June, ahead of establishing its NZWorld betting platform in the country.
However, the focus on sports betting investment comes at a time of ongoing uncertainty regarding Kenya’s gambling taxation policy, with an increase of tax on gambling revenue from 7.5 percent to 35 percent enacted by the Kenyan National Assembly on 1 January.
Gambling operators in the country are also obliged to pay a 30 percent corporate tax to the Kenya Revenue Authority, as well as donating 25 percent of sales to charities as a legal obligation.
Despite oppressive restrictions, the gaming industry is still seen as a lucrative investment market, with the CMA forming its own Incubator Board to further long-term involvement in the nation’s burgeoning market.