The legality of sport betting in Ethiopia

The practice of gaming and gambling in most of Ethiopian society is labeled as unlawful, immoral, and unethical. Regardless of this perception gaming and gambling business specifically sport betting business is recently started and developing rapidly in various cities of Ethiopia. Currently, licensed sport betting companies in the country are 46 in number.

In relation to the law governing gaming and gambling, the first national lottery proclamation was enacted in 1953, which makes lottery a legitimate activity with government monopoly. As of July 2007, the Ethiopian lawmakers wanted to involve the private sector in the area of Lottery on the basis of the market-oriented economic policy of the government. Accordingly, National Lottery Administration Re-establishment Proclamation No.535/2007 has been granted the National Lottery Administration (NLA) to carry out lottery activities alongside issuing license and regulating the conduct of lottery activities practiced by the private sector.

As per Article 5 of the proclamation NLA has two main objectives. The first one is through undertaking lottery activities to generate revenue and the second objective is, to supervise lottery activities. Generating revenue could contribute in financing the country's economic and social development programs.

In its definition of lottery under Article 2(1) the proclamation incorporates ‘sport betting lottery’ as one gaming activity.

"lottery" means any game or activity in which the prize winner is determined by chance, drawing of lots or by any other means and includes tombola or raffle, lotto, toto, instant lottery, number lottery, multiple prize lottery, promotional lottery, bingo, sport betting lottery and other similar activities.

The definition given to lottery by the proclamation is open ended. Which makes other gaming activities a lottery activity as far as the activity is registered and licensed by lottery administration.

Article 2 (4) of the proclamation define sport betting as, ‘a lottery for betting arranged on the basis of in-door or out-door sport competitions and in which the prize is distributed in money or in kind.’ The activity of sport betting can be undertaken by any person and a person seeking permit for the activity shall fill in the prescribed application form and submit to the Administration together with necessary evidence based on Article 12(3) and 13 respectively.

The activity can be conducted by anyone (person) who wants to participate in the business of sport betting by fulfilling the required criterion. It can be established as a sole proprietor ship, PLC, or Joint company. Most sport betting companies in Ethiopia are established as a joint company.

The phrase necessary evidence under Article 12(3) as per the relevant directive (directive no.83/2005 E.C) of the lottery administration includes business proposal, a bank statement for their initial capital investment, and a lease agreement for their shops. The companies are also expected to enter into a contractual agreement with social development projects to donate 20pc of their profits to the social causes they have chosen to support and they have duty to pay tax and collect 15pc tax from the winner of each ticket.

At present, the license provision activity to sport betting companies is suspended by the lottery administration agency. Nevertheless, the existing sport betting companies are doing their business. National lottery administration agency suggested that since there is a complaint from concerned citizens the sport betting activity need further regulatory mechanisms for proper implementation.