Media industry to lose sh14 billion due to betting firms suspension

The media industry is set to lose approximately sh14 billion as revenues, due to the suspension of several operating licenses of betting firms.

A joint report by Geopoll and Ipsos released today affirms that the suspension of betting firms will see the media industry stands to lose 10 per cent of 2019 advertising expenditure.

The report reveals that the average spend on betting by Kenyans aged 18 to 29 years, in a given month is sh1,550.

It notes that 40 per cent of bettors intend to save this money, 60 per cent intend to spend it, either on other items 35 per cent or other betting channels 25 per cent.

The report was based on 500 Kenyans aged 18 years+ who are aware of the suspension and have engaged in betting in the past.

The government declined to renew licenses of the betting firms due to taxation issues and other compliance requirements. They were also expected to prove that they had been operating within the law, and prove that they are sufficiently liquid and have performed financially well for the past four years before their licenses can be renewed.

According to Daily Nation, SportPesa, Betin and Betway control at least 85 per cent of the market.

“There is no law that compels a government to issue a license to any investor. Our decision is going to shake the sector for sure, but we have reached a point where we have to save our country,” Dr. Fred Matiangi said.”

Expenditure on media exposure has been increasing over the years from sh10,846 in 2016 to sh21,853 last year. This year alone, from January to June, betting companies have spent sh14,306.

The tax levy introduced in 2018 saw the media value reduce, which was forecasted to continue this year and the suspension move is likely to further dampen it.

It further reveals that betting companies have been increasing their share of revenues for media and communications firms from less than 5 per cent in 2015 to 18 per cent by June this year.

This will see the anticipated decline in clutter across media as a result of the anticipated decline in betting firms’ advertising expenditure, yield potential reduction of media budget needed to cut through media clutter. “With the reduction in media budgets, marketing budgets can focus on consumer conversion marketing activities, making use of their disposable income”, the report reads in part.

Radio dominates the media platforms with most exposure, followed by Television then print.


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