Zimbabwe blocks new betting licenses after surge in gambling

19 May 2015 - 11:18 By Godfrey Marawanyika
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Supporters during the 2014 African Nations Championship 3rd and 4th play off between Nigeria and Zimbabwe at Cape Town Stadium on February 01, 2014 in Cape Town, South Africa.
Supporters during the 2014 African Nations Championship 3rd and 4th play off between Nigeria and Zimbabwe at Cape Town Stadium on February 01, 2014 in Cape Town, South Africa.
Image: Manus van Dyk/Gallo Images

Zimbabwe has stopped awarding betting licenses in an effort to limit a surge in gambling on sports and lotteries in a country with an estimated unemployment rate of about 90%.

“We need to control betting, because we can’t be betting everywhere,” Deputy Home Affairs Minister Ziyambi Ziyambi said by phone on Monday from Harare. “There are now too many operators,” he said, declining to say how many.

Zimbabwe’s unemployment rate is estimated by the government at about 11%, although Prosper Chitambara, an economist with the Labour Economic and Development Institute Research of Zimbabwe, said that 90% of the 14 million population are “either openly unemployed or under employed”.

More than 1,000 jobs were eliminated by 76 companies during the three months through March, according to the country’s Retrenchment Board, on top of 7,000 workers last year.

Zimbabwe’s economy has halved in size since 2000, according to the government. A land reform program that saw the seizure of commercial farms slashed export income from tobacco and other crops and triggered shortages of everything from corn meal to motor fuel.

That’s boosted unemployment and driven some people to gambling, betting shop managers and gamblers said.

“We have different kinds of clients — some do it for fun and some for economic reasons,” Emily Kabaya, a manager with VegasBet Ltd. in Harare, said by phone, adding that there’s a link between increased betting activity and economic hardship. VegasBet started operating last year and plans to grow into a chain of sports betting and gaming shops, she said.

“My family survives from this,” Blessing Moyo, an unemployed former banker at the shuttered local unit of AfrAsia Bank Ltd., said after placing a bet at a Soccer Shop outlet in Harare on May 4. From one wager “I got $2,700 and bought tiles for my house. My wife was initially against the idea, but she now realises that its a new way of life.”

Zimbabwe’s economy is forecast to grow by 2.8% this year, according to the International Monetary Fund, down from 3.2% in 2014, as uncertainty over black ownership laws stifle foreign investment. Company closures rose to 87 last year from 44 in 2013, the Harare-based Reserve Bank said in its December 2014 quarterly report.

“The issue is about how people are trying to address poverty,” Christopher Mugaga, an economist with Econometer Global Capital in Harare, said by phone. “This all comes down to the economic environment, unemployment and people trying to survive. The economy is not performing.”

Norman Macheka, general manager of Soccer Shop, said the company employs 120 people across four outlets having grown since transforming a sports bar into a betting shop in 2012. The biggest payout last year was $30,000 from a $5 wager, he said. The company also offers betting on horses, cricket, and dog racing.

“Business is good, the most popular betting is soccer,” he said in an interview last week.

- Bloomberg

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