NAIROBI, KENYA: The Capital Markets Authority (CMA) is betting on gamblers' billions to inject fresh life in the Nairobi Securities Exchange (NSE).
In a raft of policy proposals to be presented to the National Treasury, CMA is seeking among other things that government introduces a tax incentive for betting firms who will choose to pay winners by buying for them bonds or purchasing shares in blue chip companies.
According to the Director of Regulatory Policy and Strategy at the CMA, Luke Ombara, despite the betting craze producing millionaires, there are indications that most of the winnings are spent on consumption. He now wants part of this to be channeled to capital markets as savings.
"To encourage savings, there may be need to incentivise betting companies who pay out their winners through saving channels such as investing in capital markets," said Mr Ombara.
Gambling has continued to gain popularity among Kenyans especially the youth and government has responded with a tax of 35 per cent on betting firms.
In February, Kenya Revenue Authority (KRA) said that it had received Sh4.7 billion taxes from eight gambling companies.
KRA had projected to more than double the taxes from the sector from Sh1.2 billion in 2015-16 to Sh3.8 billion in the financial year that ended in June.
If National Treasury gives CMA an approval, the regulator thinks this can help attract more money to the bourse.