On a Tuesday night last week, Abenezer Girma was transporting passengers to Washington Hospital in the Bole Rwanda area when he received a call from his cashier with unfortunate news.
The 26-year-old, a university graduate, turned to ride-hailing as a profession after struggling to find a job in his field. Having worked in the ride-hailing sector for over four years, Abenezer had saved up some money and was eager to invest. A few months ago, he decided to invest over 400,000 in setting up a betting shop, attracted by promises that the business would never fail.
Since its introduction less than a decade ago, betting has swept through Ethiopia. Allowing individuals to place bets with as little as 10 birr, betting has gained popularity, especially among the youth. Betting shops have proliferated throughout Addis Ababa, with the government recking in millions from taxes.
Reports from a year ago indicate that the National Lottery Administration (NLA), responsible for regulating betting firms, was collecting 19 million birr monthly in commission from betting companies.
This was happening at the same time that public concerns regarding the harmful impacts of betting were rising. Among the vocal critics was Ethiopia’s Ministry of Women & Social Affairs, which publicly said it was working to ban sports betting in a bid to protect the country’s youth and avoid “various economic and social crises.”.
Abebe Haimanot, the head of youth affairs at the Ministry of Social Affairs, stated in June 2022 that gambling was causing a social crisis by “discouraging young people from working and taking control of their lives” and “leading to depression and suicidal thoughts.”
However, the government refrained from intervening, and the sector flourished until now. In the past two weeks, sweeping actions from City officials in Addis Ababa against betting shops have unfolded. The Addis Ababa City Peace & Security Administration Bureau, during a mid-week press conference, declared the closure of a staggering 3,241 betting shops, including Abenezer’s shop.
Shega has learned that the mass closure did not take place in other cities like Bishoftu and Adama, where betting is also popular.
The Peace and Security Bureau, which is also behind the now and then banning of motorcycles in the capital, explained that the closures were a result of various violations, such as engaging in the sector without the required business licenses, allowing individuals under 21 to bet, permitting the chewing of khat in shops, and operating within a prohibited radius of schools and religious organizations.
Besides these specific reasons, the Bureau also voiced accusations that underscored public concerns. According to Lidiya Girma, an official at the bureau, the government was compelled to take action after witnessing the day-to-day effects of betting.
The Bureau also justified the closure on the grounds that betting was negatively influencing the next generation of Ethiopia, serving as a hotspot for criminal activities, and causing harm to individuals’ lives.
Some betting shop owners contend that authorities are exploiting this concern to close down legally operating establishments. Speaking anonymously to Shega, one betting shop owner expressed frustration, stating, “We don’t even know what’s happening. City officials, supported by multiple police officers, were arriving at the shops to shut them down. Even if they found everything to be in compliance with the law, they were closing the shops for trivial reasons, such as allowing people to smoke inside the betting shop, even when no one was actually smoking,” shared the owner, who had multiple shops closed during the campaign.
Axum Betting, a prominent betting brand in Ethiopia, informed Shega that six of its betting shops were closed. Established approximately five years ago, Axum indicates that each of its shops employs around five people. Selam Feleke, the branch manager, expressed dissatisfaction, stating that they were not informed in advance about the government’s action. Selam believes it is unjust for the government to take such measures, especially when they have diligently complied with all requirements, including timely tax payments.
She mentioned that some of their shops were empty when security officials instructed their cashiers to leave and shut them down.
The country’s primary gambling law, the National Lottery Administration Re-Establishment Regulation 2009, permits a sports-betting lottery to accept bets on sports competitions. The more recent Sports-Betting Lottery Directive No. 172/2021, which came into effect in September 2021, introduced new sector-specific rules for sports betting.
Those seeking to enter the sports betting business are required to pay 500,000 birr to obtain the license and provide 1.5 million birr as collateral. The renewal fee is set at 100,000 birr. The license obliges a 15 percent commission from ticket revenue and 15 percent of the winning prize amount to be paid to the Administration, and a dedication of 0.5 percent of total revenue for social contributions.
However, this has not deterred hopefuls from entering the business. Circumventing the high license fee requirements, new betting shops are opened by entering into a franchise agreement, where an existing betting license holder extends their permit to the new shop, with the shop giving away its profits, sometimes up to 50 percent, to the license holder.
In addition to the fees, the Administration has established rules requiring sports betting firms to set up shop outside of a 500-meter radius of schools and religious organizations. In an interview conducted by Shega, Tewedros Neway, Communication Director for the National Lottery Administration, stated that there are currently 120 sports betting firms operating under an agreement with the Administration.
He explained that the National Lottery was informed when the city’s peace and security office decided to take action against the betting shops in the city. Tewodros further added that the betting firms are expected to be back in business within a month. “The administration is in discussions with the security office on how they can reopen the closed firms that the Administration licensed after the requirements of the law were implemented,” he added.
However, Tewodros strongly speaks against illegal system providers that create software for betting shops and operate without a license, particularly mentioning the widely known game Keno. He emphasizes that the administration only permits sports-related betting and games that “could be predicted in many ways, not games operated by computer algorithms.”
Keno, one of the new games in towns, is similar to a lottery-like game where players select numbers between 1 and 80. Since Keno is operated by a computer system, the Administration states that it is illegal. Publicly, the administration has also stated that betting will not be banned altogether.
A recent poll conducted by the telegram-based news platform Tikvah Ethiopia on the topic attracted 54,000 votes. According to the poll, 74% of the voters believe that betting should be completely banned, while the remaining percentage advocates for its continuation with stronger regulations.
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