A Push Towards Black Market Growth: Why Africa Must Rethink Its Gaming Regulation Strategy
The gaming industry in Africa is still in its early stages of development. This presents an opportunity for continuous learning from markets that have already navigated similar challenges; markets that have made mistakes, learned the hard way, and are now better positioned for growth. Unfortunately, it often seems that Africa either ignores these lessons or remains unaware of their significance.
Central to this issue is regulation. Effective legislation and clear policies are crucial for guiding the industry’s growth and ensuring responsible practices. When examining laws governing the sector, particularly taxation and licensing, it’s helpful to draw parallels with other addictive substances like alcohol and tobacco. Governments find it difficult to ban these substances entirely, despite their harmful effects. Instead, they impose high taxes and enforce warning labels to discourage consumption. Even with these measures, people continue to use these substances, sometimes even paying double taxes, highlighting that restrictions alone are insufficient.
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This situation mirrors the betting industry. No matter how high taxes are, how strictly advertising is banned, or how many laws are enacted, people will still find ways to place bets, either through legal platforms or illegal ones. The key difference, however, lies in accessibility. Unlike alcohol or tobacco, which are physical goods requiring shipment, betting is digital and borderless. Anyone with a mobile device and an internet connection can access betting sites from anywhere in the world; local or international, regulated or unregulated, fiat or cryptocurrency-based. This makes enforcement and regulation significantly more complex.
Therefore, our approach to regulating substances like alcohol and tobacco cannot be directly applied to the gaming industry. Betting must be viewed through a different lens; one that recognizes its borderless nature and the ease with which it can be accessed. Imposing excessively high taxes or stringent restrictions may inadvertently push operators and players toward the black market. Such measures may also pit licensed operators against unregulated, illegal sites, undermining efforts to protect consumers.
This shift to the black market exposes players to scams, unregulated platforms, and irresponsible gambling behaviors, especially when these sites lack responsible gaming features such as self-exclusion or player limits. Africa therefore must rethink its strategy: how to effectively regulate, tax, foster investor confidence, and protect players, all while maintaining a responsible gaming environment where everyone is safe.
Several markets around the world are successfully managing these challenges by adopting innovative regulatory frameworks. Africa can learn from these best practices, adapting what works elsewhere to suit local contexts. Ultimately, a balanced and informed approach is essential to develop a sustainable, secure, and responsible gaming industry across the African continent.
Author: Jeremiah Maangi, Founder & CEO of iGaming AFRIKA
