Image Credit: The Eastafrican
The Parliament of Uganda on November 12, 2015 passed the Gaming and lotteries Bill. The objective of the law is to reform the law relating to the conduct of lotteries and casinos in Uganda.
The lottery and gaming industry before the passing of the bill was regulated by the National Lotteries Board (NLB) and guided by the National Lotteries Act of 1967, the Gaming and Pool Betting (Control and Taxation) Act of 1968, and an addendum of statutory guidelines introduced in 2012/13.
According to the committee report on Finance, planning and Economic Development, the committee observed that the present legislative framework governing the gaming industry is outdated and no longer forms an appropriate or effective regulatory framework that can be used to govern a modern and fast gaming industry.
The committee further recommended the establishment of an independent regulator whose functions will be to regulate and monitor the gaming industry, foster competition through licensing of operators.
The regulatory body must be built around the philosophy of consistent legal, ethical and fair mind practices and actions, bolstered through highly rigorous standards for licensing, sustainability and operation.
The report proposed, that failure to pay taxes within 30 days would automatically result into the surrender of the gaming license and require immediate closure of the gaming operation. Key question is, does government have the manpower to enforce all these ‘wonderful’ regulations?
In 2012, gambling was named a “new driver of chronic poverty” among young people in the country by Action Aid International Uganda, Development Research and Training, and the NGO Board of Uganda, which reported, “Many youth are abandoning participating in productive activities for gambling, especially sports betting.”
The overwhelming proliferation of lottery, casinos and sports betting in Uganda has seen the gambling industry develop in terms of penetration and revenue generation. Gambling related tax revenue has increased by about thirty-fold over the past decade, from Ugx 0.24 billion in 2002/3 to Ugx 7.4 billion in 2012/13.
These revenues are set to increase even more with the introduction of a new 15% tax levied on winnings as per the 2014/2015 budgets. As the government continues to search for more financing options for the national budget, the gaming industry is fast being recognized as one of the more underutilized potential tax bases.