About two months ago I defended Kenyans who participate in SportsPesa and betting in general in the article Njoki Chege rubbished betting out of ignorance – Here is the economics of betting. One of my arguments was to the effect that betting can be a decent source of income. The exact paragraph read:
It is also important for me to say this to those who engage in betting as an occupation – it is possible to derive a decent income from betting every month but you have to be smart, very smart and extremely knowledgeable. A betting individual is not any different from someone who on a daily basis engages in the buying and selling of stock in a stock market like the Nairobi Security Exchange, or a person involved in the speculative trade of money in different world currencies. In the long run, these people normally tend to make decent income, but they usually calculate their risks very carefully but at times they end up losing millions of shillings in bad performing stocks.
In April 2005, BBC published an article by Denise Winterman which was introduced as follows:
Forget those ideas about card sharps and hustlers, a new breed of white-collar gambler is using statistics and the power of the internet to turn a profit. Welcome to gambling as a career option.
When read superficially, the two quotes may be understood to mean that betting can provide full time employment to many who participate in it. Taking advantage of this confusion, SportsPesa Tips, a website that claims to provide tips for SportsPesa gamblers at a success rate of around 80%, started promoting betting as a full time employment opportunity through their SportsPesa Tips Facebook Page. The Facebook post reads:
BETTING AS A FULL TIME JOB
For gambler’s who are PATIENT, RISK TAKERS, and WITHOUT GREED and do not view gambling as a one day profiting adventure but a Long Term (monthly) investment.
You can make as little as KSHS 100,000 monthly or as much as 1M depending on your initial stake. There are always those bets in a week with at least 2 odds that always go through 90% and that is where gambling money is.
So far this month, we have made kshs 119,000 for our subscribers using such tips (27 won, 10 lost). Feel free to join us at any time at Sportpesa Tips (www.sportpesatips.com) and start your profit Journey.
No one can predict all games in a month and no tipster can give you say 10 correct tips in a day (us included). There are always bad and good days even for us
Going by the comments posted under that SportsPesa Tips update, it is easy to see how gullible Kenyans are. Many commenters believed the post that betting can provide employment to several Kenyans. This deception is not just being practiced by SportsPesa Tips and other gambling platforms, but by the Government too. When asked how the government had provided jobs to the millions of jobless Kenya since Jubilee came to power, Deputy President cited betting as one of the areas where the Government had provided jobs.
A friend of a friend also succumbed to this deception. According to the story from the friend, this guy participated in a SportsPesa betting sometime towards the end of last year in which he spent some Kshs 300 to bet and luckily walked away with Kshs 400,000 as prize money. What did the guy do with the Kshs 400,000? First, he bought a tablet. Second, he quit his hustle. Third, he employed himself as a full time gambler on SportsPesa. Three months down the line, the poor guy got so broke that the only thing he could do to settle some of the debts he had recently incurred was to sell his expensive tablet.
The problem with the claims that betting can provide jobs to the millions of jobless youth (see: One Kenyan Dead – Ten million to go) is the failure by those who make the claims to clarify that no more than 2% of those who participate in gambling can potentially make a regular decent income through betting. This is because the jackpot and other betting prizes do not come from any external investments and returns but from money collected from other gamblers (the betting wager).
Let us assume that in Kenya today a decent monthly income is Kshs 50,000, the question therefore is, if there are 1 million betting participants who spend Kshs 1000 per month in the betting pool, how many can earn the Kshs 50,000 in the first month? The answer is 14,000. This figure is arrived at after assuming that around 30% of the Kshs 1 billion collected from the gamblers will be retained to by the betting company so as to fund the company’s profitability, operations, and marketing. Thus, if 1 million Kenyans participate in SportsPesa every month by spending Kshs 1000 per month with the hope of earning regular income to the tune of Kshs 50,000 per month, only 14,000 or 1.4% will be able to gain any meaningful income through winning – the rest of the 98.6% will lose.
If it assumed that the money that will be retained by the betting company will be negligible, then the maximum number of people who can gain meaningful income will increase from 14,000 to 20,000 which will translate to only 2% of the betting population.
So, unless you are extremely (close to 100%) sure that you can always be among the 2 percent of the potential meaningful winners, do not waste your time believing that betting can be your trusted source of income. Look for a job elsewhere young brothers, and sisters. To further reveal just how hopeless someone who looks forward to earning a decent income from SportsPesa is, the SportsPesa Tips post clearly show that out of those who participated in the SportsPesa betting by religiously banking on the tips, the average win for the 27 winners was only Kshs 4,407, money that cannot sustain a living rat in a city like Nairobi.