Dark secrets of Kenya’s gaming dens
Originally Published: November 4, 2010
The décor, lighting and general set-up achieve their intended purpose – deception.
Like fly traps they keep holding on to both new and old clients. Once you get in, getting out remains an endless journey of small successes and big failures, depending on which side of the table you are standing on.
It is Friday night in one of the biggest casinos in Nairobi’s Westlands area. Almost all machines are occupied by eager customers.
At the poker table, Francis Wanyoike deals to the patrons. This is a big hand. Only three of the original seven players remain at the table. The rest have folded. His boss stands a few feet from him, monitoring each and every move he makes.
After a few tense moments a winner emerges. He takes home the grand prize of Sh600,000.
“He will leave with only about Sh50,000 since he owes the casino more than Sh400,000. The house never loses,” Mr Wanyoike says, pointing at the winner, a man he says is addicted to the cards.
In a way, Mr Wanyoike is glad the winner is a regular patron of the casino. If it were someone else, things would not have gone his way.
“If someone else were to walk away with the prize I would be sacked.
Despite the fact that your win was entirely down to your own luck,” he says.
“There’s always the perception that a walk-in client, especially if black, can never win.”
For the seven years that he has worked in different casinos — all foreign-owned — never once has Mr Wanyoike seen a black person treated with dignity.
He remembers a colleague who recently broke her leg and she had to come to work in a plaster. “She tried to ask for a few days off but the boss refused,” he recalls.
She was told to report to work the following day or she would lose all her benefits. So she came to work with a plaster on her leg and did her nine-hour shift. And the employer was lenient enough and provided a seat at her work station.
The chief executive of the Association of Gaming Operators Kenya (Agok) Heram Okoth says no business worth its salt would be willing to treat its employees unfairly, “unless, from the very outset, it was created for a different purpose”.
Mr Okoth, whose organisation represents 14 of the 28 operating casinos, says although Agok stands for fair trade, he cannot rule out the possibility of some rogue operators giving the business a bad name.
“Like every other business, we have those who abide by the rules and those who don’t. Unfortunately, it is not up to us as an organisation to follow up on law breakers,” he says.
Casino employees Lifestyle talked to, who did not want to be named for fear of losing their jobs, ranked verbal and physical abuse top among reasons that can make working for a casino hell. An allegation put forth by both former casino employees and their union.
“Some of these people who run casinos in Kenya do not even have valid work permits. They come in looking for a place to keep their money for a while, then leave. They have little regard for laws,” says Wilson Makumi, the general secretary of the Kenya Jockey and Betting Workers’ Union.
Since 2007 a number of casinos have opened and closed down in Nairobi. Some operated for two months or less.
“Business projections should indicate that before a business breaks even, it would spend a few months under-performing. It defies expectations for you to shut down a multi-million-shilling investment after a few working days,” says Mr Makumi.
The union official has some kind of explanation for this: money laundering. Data from Agok shows that last year the government got more than Sh300 million from the gaming industry in terms of tax.
Some say that the collections would have been much more if there was full disclosure of casino earnings.
But Jacob Mbuthia, the manager of Eastleigh Casino, disagrees, saying the possibility of tax evasion in the industry is nil.
“We have to declare our daily earnings to a government inspector stationed at the casino every day. We compute daily incomes and pay our 16 per cent value added tax like everyone else,” he says.
On top of this, Mr Mbuthia adds, casinos are subjected to corporate taxes too.
“The penalties for tax evasion are known to everyone. Anyone who goes against government directives is committing a criminal offence. If such cases exist they should not be taken to be representative of the gaming industry as a whole,” Mr Mbuthia says.
The Betting Control and Licensing Board (BCLB) created in 1998 under the Ministry of Home Affairs is mandated by law to ensure that gaming is conducted honestly, competitively and that it is free from criminal activities.
The board bears the responsibility of controlling and licensing betting and gaming premises, facilitation of tax collection, authorisation of public lotteries and prize competitions, inspection and elimination of illegal gambling.
This it does through gaming inspectors stationed at every licensed casino. Among other duties, the inspectors record the earnings each casino makes and forwards the details to the BCLB.
These records are later counter-checked with the casino’s tax files at the end of each tax season. This system is, however, not foolproof.
“At the end of the day, these are human beings and temptations can creep in. It is not impossible for a casino owner to bribe the inspector and file an erroneous report,” says Mr Okoth. “But this is an exception rather than the norm.”
Inasmuch as licensed casino operators say they pay taxes, those in the industry say a parallel, illegal gaming industry is the one most at fault over non-payment of taxes.
“Once in a while, we used to get calls from strangers to oversee gambling sessions at private, members-only clubs. The events were by invite-only,” says Mr Wanyoike.
This, he says, was an alternative for those with bad debts at casinos or prominent people who would not want to be associated with gambling. “And when the money runs out, the notes are replaced with promissory notes, car keys and title deeds.
At such games, anything goes,” he says. But there are those who think casinos make money from much more than their games.
“We are aware that there are many fishy things going on within the gaming industry walls,” says Mr Makumi of the union. “But getting to them is proving to be quite a task.”
In 2007, Mr Wanyoike says his employer was barred from operating for two years due to violations of the original licensing agreement.
But after what he terms an intervention from a certain politician, the licence was renewed in 2009 and the casino was allowed to operate.
“In this business, everyone almost always owes someone a favour. The favours are repaid in many ways. Pushing for the approval of a licence is one of the ways. The only winner on most occasions is the casino,” he says.
But Mr Mbuthia of Eastleign Casino says the notion that the house never loses is a myth. “Gambling comes down to luck and probability. Those standing in front of the tables or slot machines know this well enough. The more the bets you place, the higher your chances of winning, and the harder your loss,” he says.
Despite the fact that casinos, even those under Agok, are run as separate business ventures with different employment terms, the Kenyan gaming industry is currently in the control of several families and different alliances.
At the heart of this multi-billion-shilling industry is a web of deceit, corruption and sheer disregard to both law and ethics weaved by foreign investors mostly of Eastern European decent.
Of the 30 licensed casinos, 24 are foreign-owned. Only six are owned by or associated with Kenyans such as GG Kariuki (Lucky Casino in Nakuru) and businessman Ashif Walji (Four Aces Casino in Nairobi’s Westlands).
Of the 24 foreign-owned gaming establishments, seven are run by an Italian family, the Ciellinis, who operate the Babylon Casinos in Nairobi and Casino Malindi at the coastal town as well as a host of other gaming houses and restaurants spread over Nairobi and the coastal strip.
Korean, Chinese, Ukrainian and other European nationals operate the others.
“We would want more players to get into this industry. Regardless of the perceptions of us, we are legal businesses licensed by the Government of Kenya,” says Mr Okoth.
He adds that more should be done by the government to promote gaming as an alternative form of entertainment and provide holidaymakers with options.
“We thank God for the wildlife and beaches he gave us.
‘‘But, surely, in order to catch up with competitors such as South Africa or Egypt, gaming should be factored in,” says Mr Mbuthia.
But behind the bright lights and alluring slot machines is a tale of despair, harassment, bribery and continuous abuse suffered by employees who accuse their union and the government of turning a blind eye to their plight.
For a number of those hooked, only death can provide an ultimate exit.
Recently, a Chinese national jumped to his death from his sixth floor apartment after reportedly losing an undisclosed amount of money at a casino in a city hotel. He is said to have first visited the casino on September 19 and was a frequent gambler until he jumped to his death.