Gambling in Malawi

Gambling has finally found a home in Malawi, with industry players
generating K3.26 billion in revenues over the past seven years, Malawi
Gaming Board (MGB) statistics indicate.
The statistics also show that the gaming industry has contributed K270
million in Pay As You Earn, corporate tax, withholding tax and fringe
benefits, a development MGB chief executive officer Master Maliro
said has boosted Malawi’s economic standing.
“There is growth in the industry (as) more gaming sites are being
opened as evidenced by number of gambling sites which provide
entertainment to Malawians , (there is) increased investment in terms
of gaming equipment and, on the part of MGB, increased regulatory
costs due to expansion of the industry, ,” Maliro said.
This comes after Parliament passed the Gaming Act in 1996 with the aim
of legalizing gaming in Malawi. Before that, the country was replete
with illegal gambling activity as evidenced by the proliferation of
‘Wachiona ndani? and ’Kakuda Kali Pati’? games on the streets and in
community hideouts.
Unscrupulous gamblers would target women going to buy produce at
Agriculture Development and Marketing Corporation outlets and trading
centres and defraud them of their cash and material possessions.
Maliro said, however, that since enactment of the same, gaming has
become a cash spinner for the country.
“Its spin-off benefits include increased revenue to government,
development of tourism infrastructure, and job creation. 167 Malawians
have been employed directly into gambling occupations and many others
in support services such as transport, security, food and beverage,”
Maliro said.
Maliro added that, through legal gambling, MGB has managed to donate
food and other items worth K563, 000 to Mary’s View School (for the
deaf, blind and special children) in Chiradzulu. The Board has also
funded Tourism Desks at Chileka and Kamuzu International Airports,
sponsored the Lake Malawi Yachting Marathon, a tourism marketing
entourage to Egypt, and refurbishment of tourism offices in Blantyre.
He added that gambling has boosted local entrepreneurship, with eight
sites and three gaming machines being run by locals.
Sunday Times investigations reveal that Malawi has, for the past five
years, been making a fortune out of gaming. For example, statistics
indicate that, in 2006, MGB generated K48, 716, 000, of which K27,
464,000 was used for operations and K21, 252 was surplus.
However, income levels declined slightly in 2007 when the Board
generated K42, 463, 000 in income. Of this, K40, 405, 000 was used in
operations, with the remaining K2, 058, 000 as surplus.
MGB then went back to winning ways in 2008, when it generated K47,
523, 000 in income, spent K46, 148, 000 on its operations, and posted
a K1, 375, 000 surplus.
In 2009, the Board managed to generate K59, 920, 000 in income, used
K44, 256, 000 in operations, and registered K15, 663, 000 as surplus.
MGB’s income then rose by over K30 million in 2010, when it posted
K82, 062, 000 in income, spend K58, 429, 000 on operations and
corporate social responsibility campaigns, to register a K23, 633, 000
surplus.
Maliro said Malawians have become the biggest beneficiaries of legal
gaming because, while MGB collects revenue from gaming operators,
Malawi Revenue Authority also collects other taxes. These include
excise, PAYE, and Corporate taxes.
“Part of the levies that are collected by the Board are used for
operations of the Board and its secretariat. The other part of the
proceeds is used for the development and promotion of tourism related
activities, responsible gaming and rehabilitation. Surplus registered
is invested in the money market,” said Maliro.
The Gaming Act, No. 26 of 1996 (as amended in 1998) provides for the
regulation of gaming, control and licensing of gaming premises,
imposition and the recovery of tax on gaming.
Meanwhile, Maliro has parried aside fears that illegal gambling could
be eating away part of government’s revenue. He said the Board has
been running massive campaigns against unlicensed gambling.
“We have closed down illegal gambling operations. We work with the
Malawi Police Service to eliminate street gambling. Following a series
of sensitization programmes on street gambling, number of prosecuted
cases has increased and incidences of street gambling have declined,”
said Maliro.
MGB started its operations in 2002, after appointment of its first
board by the Minister of Tourism. The Board was responsible for
developing modalities for the local gaming industry as well as
creation of a secretariat which serves as the functional arm of the
Board.
However, the Tourism Ministry seconded some of its officers to the
Board’s secretariat, which started its operations in 2002 as part of
the ministry. The secretariat was finally de-linked from the Ministry
in 2003 and, since then, MGB operates autonomously from its Blantyre
offices.