Will imminent Ugandan Betting Ban hurt the economy?

In February 2019, President Yoweri Kaguta Museveni, Uganda’s evergreen leader who has been in charge of running the country since 1986 announced a country wide ban on sports betting. This drastic call was in response to a rise in problem gambling amongst the Ugandan population, with youth in particular. 

After over two years, we have seen the ban slowly be rolled out. The ban itself was never intended to be an outright ban on sports betting. It was never intended to be rolled out immediately, but rather, the ban was targeted at licensing. No new operators would be provided with licenses, and no licenses would be renewed for operators that already had permission to offer their products in the country. 

There has been much debate as to whether or not this will be the right move. Many media outlets support the decision to ban sports betting, as the problem is one that has affected the people of Uganda for decades. Others believe that a ban only puts vulnerable parties at further risk, as a very real possibility is the engagement of affected parties with illegal betting operators. 

While evidence of rampant debate has been sparked from a social perspective, one angle that has not yet had much coverage is that of the economic perspective, and what the Ugandan economy stands to lose when the ban on betting comes into full effect. 

A case study that can be used to view the effect of an outright ban on online gambling is South Africa, where online gambling in the forms of casino games, bingo and poker are outlawed. This however hasn’t stopped a vibant online gambling fraternity from engaging in these prohibited platforms, even though they face great risks if they are eventually caught.

Online gambling in South Africa can only be done legally through licensed betting sites in the country. These operators are well known locally and have earned the stamp of approval from at least one of the nine regulatory gambling boards that preside over South Africa. 

There is no denying that the betting industry in Uganda is one that is booming, with thousands of Ugandans depositing and playing on the list of betting sites that inhabit the Ugandan space. It is now well known that these operators, as well as the opportunities and money they provide will become a memory once the ban on betting comes into full effect. 

What does that mean for the economy? It means the loss of jobs, as many operators hire locals in customer support roles. It means loss in potential tax revenue, as currently, Ugandan betting tax stands at 15% of user’s winnings, and 20% of operator profits. A large sum considering the number of gamblers in Uganda. 

As can be seen from the figures above, it doesn’t take a mathematician to realise that the potential betting ban could have significant consequences on the Ugandan economy, and this is what makes the desire for other options so great. 

For example, the money from the taxes could be used to finance rehabilitation centres, education campaigns, and a number of other initiatives that could protect players from potentially taking to illegal forms of online gambling. 

Either way, as the countrywide ban on sports betting is carried out, the economy will take hits that perhaps it is unable to afford in the current climate of the world.