ANALYSIS OF THE GAMING INDUSTRY IN GHANA – PART 1

According to a report by TGM Research in late 2022, 41.7% of

Ghanaians were involved in sports betting within the preceding
12 months. Also, 74.17% of respondents in a survey in the
report say they bet on sports primarily to make money.
Today, there are 31 licensed sports betting operators in
Ghana. In just a few years, the number has increased from
only 12 licensed companies to 31.
One would agree that adverts promoting the business of one
operator or the other have become commonplace - billboards
and paraphernalia are everywhere.
Indeed, the time of the gaming industry has come, and the
government has taken a keen interest in the industry. Sports
betting together with the casino business are the major players in
Ghana’s gaming industry, though sports betting are much more
popular and accessible to many Ghanaians. Between 2019 and
2022, the government collected GHS450m in taxes from the
gaming industry.
There is still a lot more to be collected. The sports betting sub-
industry has become so popular that there was a massive player
revolt when the government implemented a 10% withholding
tax on winnings in August 2023. Although massive
advertisement has increased the popularity of the sub-industry,
the sub-industry’s massive popularity can be attributed to
growing interest in the many football leagues, especially in
Europe. The sub-industry’s business therefore peaks during the
various European soccer leagues, especially the English
Premiere League and the European Union of European Football
Associations (UEFA) Champions League.

Sports betting is now big business, beyond core football lovers.

Today, all over the world, there are economies both at the
national level and the sub-national levels where the gaming
industry has become a significant contributor to public sector
revenue. The usual examples are Las Vegas and New Jersey in
the United States of America and Macau in China. Malta,
Singapore and Aruba have also become very popular gaming
destinations for gamblers. In all these cities and countries, the
government has left no stone unturned to make them casinos and
betting hubs for players in the country and abroad.
One cannot blame these economies that have leveraged the
gaming industry to boost revenue. In addition to the direct
revenue from the industry, there are also linkages to the wider
economy that bode well for economic development. According
to the American Gaming Association, the gambling market in
the United States of America contributes almost USD261 billion
to the economy annually and supports 1.8 million jobs across the
country. The industry has therefore become an important sector
for purposes of economic diversification. Right here on the
continent of Africa, Kenya, Uganda, Tanzania, and Nigeria now
boast of large-fledging gaming industries in their respective
countries. In these African countries, apart from the direct
revenue from the industry, they have also seen a significant
boost in advertising spend and financial inclusion by reason of
the use of mobile money applications.
Ghana has not been left alone in the benefits that accrue from
the gaming industry. In fact, it has become an important source
of revenue for the government of Ghana. As the country finds
itself in dire economic straits, the gaming industry has become
one of the industries that the government has targeted to increase
its revenue. In April 2023, the Parliament of Ghana passed the
Income Tax (Amendment) Act, 2023 (Act 1094). Among other
things, Act 1094 introduced a gaming revenue tax of 20%. It
also introduced a 10% tax on winnings from the gaming
industry. According to sources within the Ghana Revenue
Authority, the government of Ghana is hoping to raise GHS
1billion annually in direct taxes from the gaming industry. The
Ghana Sports Betting Association (GHASBO) has claimed that
the advertising spend within Ghana from the gaming industry is
conservatively estimated at GHS 200 million annually. Indeed,
the telecommunication companies in Ghana are also making
millions of cedis as processor charges from the industry. In
2019, the gaming industry accounted for the single largest
mobile money sign-ups in the country thereby supporting the
government’s financial inclusion and digitalization agenda.
In the area of corporate social responsibility, sports betting
operators have provided a platform for many people in the sports
industry to receive training and rediscover themselves. In this
direction, sports betting operators have provided training to
assist some retired footballers and sports personnel in exploring
business opportunities after their active sporting careers. These
initiatives also help to discover new talents in the sports industry
in Ghana. Sports betting operators have provided headline
sponsorship for at least eight (8) Ghana Premiere League teams
within the last five (5) years. The contribution of sports betting
to the Ghana economy has been far-reaching. According to
GHASBO, one sports betting operator is in its second year of
sponsoring the entire Ghana Premiere League.
Despite the above, the gaming industry worldwide has
historically been associated with dodgy people, fraudsters and to
put it bluntly, criminals. As the world continues to be a
dangerous place, any industry that is used as a conduit for
criminal activities will obviously incur the wrath of authorities.
In many countries around the world, such as the United States,
China and India, governments in the past tried to ban the
industry entirely or severely restrict its existence. However, the
more they tried to ban it, the more the industry found ingenious
and clever ways to survive. Today, with the advent of
technology, it is almost impossible to impose a total ban on
betting anywhere in the world. Governments quickly realized
the futility of trying to suppress the industry and changed their
attitudes. The attitude became one of sanitizing the industry of
crime to generate the most revenue possible from a well-
regulated gaming industry. This change of perception mediated
policy changes which later framed better regulations to govern
the gaming industry. Better regulations allowed governments to
see the sheer volume of transactions and money that passes
through the value chain. Smart government officials then began
to explore how they could leverage the industry to raise money
and deepen linkages to other parts of the economy.
Today, around the world, the gaming industry has become one
of the sources to diversify economic development. There is
therefore a gaming industry almost everywhere on the planet.
Malta, with a population of 516,000 received revenue of almost
USD 1 billion in 2020 from its gaming industry. The gaming
industry contributes about 8% of the economy of Malta. Online
gaming is a significantly important part of Malta’s economy.
Around 50% of the country’s international bandwidth is
dedicated to online gambling activities. Cities such as Cairo in
Egypt, Sydney in Australia, Manila in the Philippines, Lima in
Peru and San Jose in Costa Rica have become popular tourist
destinations partly because of their gaming culture. They have
each relied heavily on the gaming industry for their economic
development. On the continent of Africa, the revenue from the
online gambling market alone is projected to reach USD1.6
billion in 2023 and will grow at an average rate of 9% yearly.
Kenya, Uganda, Tanzania, Nigeria, Rwanda and South Africa
have, in the recent past, seen significant growth in their gaming
industry. Ivory Coast, Senegal and the Republic of Benin are
currently developing their gaming industry as well.
Persons and groups which advocate for a total ban or the
placement of severe restrictions on the gaming industry will
have to reconsider their position. One can appreciate their
concerns though. In addition to the potential criminal activities
in the gaming industry, there is also the moral question. A
significant number of our compatriots consider gambling as
immoral. While that may be true, we cannot legislate morality.
Any society that has tried to legislate morality has failed or
turned into a highly dysfunctional society. In any case, whose
moral code would be the standard and where would the line be
drawn? Modern constitutional protections and civil liberties
make it almost impossible to legislate morality. In the face of the
economic benefits of the gaming industry, it is important that
Ghana adopts a prudent and pragmatic approach to deal with the
gaming industry. In a highly competitive world if Ghana wants
to realize the dream of “Ghana Beyond Aid”, it must leverage all
legitimate means to raise revenue and deepen economic
diversification. The call for a total ban or the placement of
severe restrictions on the gaming industry can be likened to what
Ghana has essentially done to Palm Wine, Akpeteshie, Pito and
other locally brewed alcoholic drinks. Historically, the fixation
has been on the negatives, particularly those who have abused
these alcoholic drinks to vilify local drinks. Detractors in other
countries have helped drive the narrative that the consumption
of these local drinks will send one to an early grave. Today, the
Palm Wine taper, the Akpeteshie brewer and the Pito brewer are
some of the most vilified and to use Franz Fanon term, "the
Wretched of the Earth". However, Palm Wine, Akpeteshie and
Pito are the Moet, the Johnnie Walkers, the Hennesseys, etc of
other countries. A cursory research into the beginnings of these
foreign alcoholic drinks which have become the toast of many
middle class and upper class Ghanaians will reveal that they all
started just like our Palm Wine, Akpeteshie and Pito. Those
countries embraced what they had and then helped to develop
them into the multibillion-dollar international wine, whisky and
brandy industries they are today.
The gaming industry has changed significantly in its scope and
coverage. The industry has leverage on technology to move
online. The critical question to ask is, what can the authorities
do to better regulate the industry? What can the authorities do to
minimize if not eliminate the ills of the industry and promote the
positives. The Gaming Act, 2016 (Act 721) has provided the
basic principles to regulate the gaming industry. The Gary
Nimako Marfo and Peter Mireku led Gaming Commission in
Ghana has done tremendous work to build on the previous
administration to strengthen the regulatory regime. Under the
leadership of the Board Chairman, Gary Nimako Marfo, the
Gaming Commission has managed to collaborate with the
operators and other stakeholders to strengthen the regulatory
regime. Gary Nimako Marfo has managed to team up with the
gaming operators, Ghana Revenue Authority, the Financial
Intelligence Center of the Bank of Ghana and other stakeholders
to strengthen the regulatory regime. The Gaming Commission
has impressed on these entities to see themselves as stakeholders
and collaborators as opposed to enemies and competitors. In
July 2023, the Gaming Commission in collaboration with the
Ghana Association of Sports Betting Operators organized a
Gaming Regulatory Conference for stakeholders to deliberate on
the best practices to regulating the gaming industry in Ghana.
The conference had in attendance, officials from the Gaming
Commission, gaming operators, Ghana Revenue Authority,
Financial Intelligence Center, Ghana Police, District
Assemblies, Journalists and a host of other stakeholders. Despite
the modest successes chalked by the Gaming Commission, there
is still a lot of work to be done.
About 20% of the transactions on the betting platforms of the
sports betting operators are still done in cash. Although cash is
light and simple, it makes for anonymous transactions. In spite
of constitutional protections for privacy and confidentiality,
anonymity is the one thing regulators must prevent in the
gaming industry. It is an undeniable fact there is a high
propensity for unlawful activity in the betting industry. Indeed,
if players are only betting for fun and nothing more, then they
should not have any concern when they leave an audit trail.
After all, the right to privacy and confidentiality is not absolute.
It is tempered by the responsibility of law enforcement agencies
to keep everyone safe in an ever changing world. The spirit and
the letter of the Know-Your-Customer (KYC) provisions under
the Anti-Money Laundering Act, 2020 (Act 1044) envisage that
every player/punter must be positively identified. Moving to a
cashless ecosystem is therefore the surest way to inch closer to a
non-anonymous industry. This will also aid in giving true
meaning to the provisions of the Anti-Money Laundering Act
when it comes to its application to the gaming industry.
There is still a significant concern with the thorny issue of
underage gambling. Ten years ago, the sports betting sub-
industry was largely retail in nature with many sports betting
shops dotted across cities. Underage gambling could therefore
be easily identified when children hanged around and entered
betting shops. Operators responded to the complains of underage
gambling by hiring bouncers to do age verification before
allowing entry into sports betting shops. Today, the dynamics of
underage gambling has completely changed. About 80% of the
industry is now online. Thus, there is no need to go to any shop
to place a bet. One may think that the issue of underage
gambling has significantly reduced with the advent of online
gambling. After all, the sports betting operators must verify their
customers before they can create a betting account on their
website. In addition, a player will need to have a mobile money
account before they can place a bet online. Current rules do not
permit anyone under the age of 18 years from registering to own
a mobile money account. However, evidence has shown that
there is still underage gambling. Some operators have not fully
implemented the strict KYC procedures under the Anti-Money
Laundering Act. In addition, it has been found out that in many
peri-urban communities, illiterate and semi-illiterate mothers
especially, give their mobile telephones to their children to
operate their mobile money accounts on their behalf. Unknown
to these mothers, their children use their mothers’ mobile
telephones and mobile money accounts to place bets online. At
present, there is no research to ascertain the extend of underage
gambling on the various online platforms. However, even one
child placing a bet online is one too many. The Gaming
Commission must work closely with GHASBO and other
stakeholders to properly identify the problem so that they can
begin to tackle it from the root.
There is also the issue of gaming addiction. Some people now
view sports betting as a business and therefore gamble
irresponsibly. Sports betting is just for the love of the game of
sports. It is meant to be an entertainment for players and not a
business. Research has found out that some operators in Ghana
have invested in highly sophisticated computer analytics
software to identify irresponsible gaming on its platforms. The
authorities must continue to work together with the various
stakeholders to drive player education among other interventions
to deal with the situation.
On the whole, one can say that the gaming industry has a
potential to aid government revenue mobilization and also
deepen economic growth. It is an industry whose time has come
and the country should also take its share of the industry’s
benefits. Research has shown that Ghanaians are already
patronizing international sports betting sites, what GHASBO
refers to as black sites. These are international sports betting
markets which are unregulated in Ghana. It is better that we
develop our industry to ensure that we minimize the capital
flight that is associated with betting on international unregulated
black sites and rather encourage those who are interested in
betting online to patronize the regulated sports betting markets
in Ghana.