by Njoroge Mugo
The basic idea behind the efficient market hypothesis is that it is impossible for any investor to reap significantly high returns since all information about the market, whether public or private, is fully reflected in the stock price. Aside from fact that the sports gambler acts as his own speculator (for as long as he can, at least), in principle, the sports betting arena operates as a simpler version of a financial stock market. The only difference seems to be that, unlike the investor who stands to gain from trend analysis and other benefits of time and information compounding, the gambler subjects himself to short-term risk, his success being almost wholly a function of chance, and so couldn’t possibly rely on the trade as a reliable income source—not even after ‘diversifying their portfolios’ through placement of multiple bets (given that the law of averages would quickly counteract this.) Yet, a significant portion of the betting community (19.7% according to the FinAccess 2019 report, published by KNBS) continue to profess sincerely that they have been able to sustain a steady income flow through sports gambling.
Stochastically, then, something must give.
Personally, my reasons for restraint in joining the risky business have little to do with economics and more to do with timidity—and, of course, my life-long aversion to sports. In fact, of the many questions I grapple with concerning sports gambling, admittedly few are statistical, some are moral, most are contemplative. Having of a mind unsharpened by the adrenalines common to risk and sport doesn’t incline one much to reportage. I recently quizzed my risk-loving friend on whether he had considered the possibility that the European Premier League, which he follows and punts religiously for, might be a storyline-driven, choreographed sham that is planned and staged by writers like the WWE. “Boss, how sure are you that you won’t lose your money should this whole thing turn out to be a scripted sham?” I asked. He turned to me, eyes squint bewildered by my display of stupidity with no regrets, and immediately relieved me of my joint.
Each time a story on alcoholism or betting or some such sin floats up on the bulletin strip, all one has to do before the usual suspects come on-screen is pause and wait. Interior CS Fred Matiang’i has taken particularly bullish delight in this respect. When he is not terrorizing teachers, lambasting non-Huduma-registered citizens or preaching doom and exile to alien traders, he is in a conference flexing regulatory muscle on tax-defaulting betting companies. If you have caught one of his many tirades then, like me, you have probably thought one of either two things: (1) “Bah, we’ve arrived yet again at that precarious intersection of capitalism, the consumer and the state.” Or (2) “I’m not sure I like your tone, public servant.” Maybe it comes with the job, I don’t know, but there’s something discomfiting about the cadences he employs in his addresses—there is something discomfiting about the man in general, even when you know he is right. And he is on this one: Tax remittance is compulsory. And gambling can be a destructive habit.
Still, it’s rather convenient that the entire nuance of the government’s examination of the industry begins and ends with terms of such elementary persuasion as “social evil”, “finishing our children”, “moral fabric”. Dependably, there is little ascription to any underlying factors—no correlations with youth unemployment, for instance—which, of course, lends credence then to the observation that Matiang’i & co.’s concerns with the ‘youth’ and the ‘moral fabric’ are only tax-deep. In April, Betting Control and Licensing Board, the state-sanctioned betting regulator, issued a ban on celebrities openly endorsing betting firms and on advertisement of betting on social media. High Court Judge John Mativo swiftly threw it out on grounds that it was “tainted with illegality, irrationality, unreasonableness and procedural impropriety.” Rather brazenly, the government continues to think that the best way to curb problem gambling is to breach free press; to control of the individual as opposed to the industry.
Of course, none of this is to deny the fact that the government does indeed have some role to play in regulating the industry. Nor is to deny that problem gambling is on the rise in Kenya, as have shown the increase in destitution and reported cases of gambling-induced suicides. Recently, a mentor told me of a close friend who once tried to sell him his own child’s backpack for gambling money. Recognizing his friend’s terrible negotiating skills and that he had seen the backpack before, he saw that a line had been crossed and an intervention had to be quickly arranged. Sadly, with the rapid growth of technology and globalization—and, concurrently, stagnation of the job market—there appears to be no shortage in sight for stories like this.
As if on a mission to uncover the bleak, I then stumbled upon this rather sobering header:
“KBL is concerned that most of those taking to betting are male youth – the very group that forms majority of its client base especially for value brands such as Senator Keg.”
—Jane Karuku, MD of KBL
Hovering momentarily on the question of why men are more likely to be disposed to problem gambling than women, behavioral economist, Gad Saad, has interesting things to say about betting as a maladaptive behavior. He endorses the theory that posits that young men are more inclined to overdo an otherwise sexual-selective good:
Specifically, evolutionary theorists have hypothesized that sex differences in risk-taking stem from greater intra-sexual competition for access to mating opportunities among men (Baker & Maner, 2008; Wilson & Daly, 1985). Risk-taking can therefore be a means of honest signaling to potential mates.
John Allan Namu, in his YouTube feature Drugs of Passion, has also managed to produce a nuanced and insightful look into the pervasiveness of gambling not only as a recreational phenomenon, but a cultural one too.
Still, the more fascinating psychosocial, and perhaps existential, questions are to be discovered in KBL MD’s comment. The KBL MD went on to note that the government should “put in place measures to control betting” and that if it didn’t “the country will be swamped with lazybones and layabouts.” I have no doubt that the MD meant well with her concern, but it does concentrate the mind somewhat to consider the context of her comment: one sin merchant worrying that another sin merchant might drive her out of town. I defy you to show me better evidence than this for the proposition that we are all simply cogs in the capitalist wheel. I doubt the inventors of the free market foresaw the coming to being of such ironies, or of the prospect that people would come to need protection from the very rights accorded to them by this same free market.
Njoroge Mugo, is a 22 year old man living in Nairobi, Kenya. He is an actuarial science student in Jomo Kenyatta University of Agriculture and Technology. He loves to read, write, listen to music, play chess, engage in spirited, topical debates with friends, re-watch old Leonardo Dicarpio movie scenes where his eyes are red and he is shouting at the top of his lungs. In his idle time he bitterly contemplates the ugly and seemingly unsolvable problems of his country.