Should betting tax be abolished?

In 2023, the Government of Ghana, through the Ghana Revenue Authority, introduced a “sin” tax of 10 percent as withholding tax on the winnings of betting. This policy aimed to make betting less attractive while mobilizing much-needed revenue for national development.

The Ghana Revenue Authority (GRA) have projected that by the end of 2024, Ghana would have been able to pull GH¢1.2 billion in betting taxes. As of September 2023, about a month after the implementation of the new tax regime, the GRA announced that monthly betting taxes stood at GHS15 million, projecting that the figure would be up to GH¢60 million by the end of the football season.

“During the first month of implementation, we averaged GH¢20 million for the GGR. As for the withholding tax, we’ve just started the betting season, but during the lean season, we averaged GH¢15 million. We anticipate this to quadruple by May,”

– said Edward Gyambra of the Domestic Tax Revenue Division of the Ghana Revenue Authority.

The GRA believes it could collect more revenue from betting operators in Ghana as it aims to introduce a gaming revenue assurance monitoring system. This system will enable the GRA to integrate their systems with that of the betting operators to enable GRA monitor in real time transactions happening and the expected tax revenues thereof.

However, this tax has raised several arguments both for and against. Proponents for the betting tax argues, it’s a way to disincentive the youth who engage in betting to reduce the likelihood of problem gambling. They also argue considering tax constitute under 14 percent of gross domestic product in Ghana, this tax will shore up government revenues especially in the face of IMF bailout programme for which the government is tasked to improve revenue collection.

Proponents against, most of whom are young people who engage in betting argue that betting is a substitute for unemployment as it affords them the opportunity to earn some income. Hence, taxing their winnings while there are no jobs appear to be insensitive. They therefore vowed to vote against any party/government that seek to keep the tax.

This matter therefore became a contentious issue during the recent presidential elections. The two leading presidential candidates, Dr. Mahamudu Bawumia of the New Patriotic Party (NPP) and Mr. John Mahama of the National Democratic Congress (NDC) all promised to abolish the betting tax once voted for. Ironically, it was the NPP that introduced the betting tax.

Eventually, the NDC won and are now obliged to fulfil the social contract of abolishing the betting tax.

Yes, many young people involved in betting may have voted for the NDC with the hope that they may abolish the betting tax. They believe in the absence of jobs, winnings from betting provide an escape from harsh livelihood and might provide bread and butter. It’s not surprising that Mr. John Mahama, the President-elect, made this pledge at a campaign at Nkwabeng in the Nkoranza South Constituency

“We will remove the betting tax. If you win, spend your money wisely. Don’t waste it on unnecessary things—use it to improve your life in a meaningful way.”

So I ask? Is betting an alternative source of livelihood? Should the young be emboldened by politicians to bet? Should the 10 percent tax on bet winnings be abolished?

The harsh realities of sports betting: Betting relies on luck, not strategy

While many believe that thorough analysis and strategy can lead to consistent wins in sports betting, the reality is far more complex. Sports outcomes are inherently unpredictable, influenced by countless variables such as injuries, weather conditions, referee decisions, or last-minute game dynamics. These factors can disrupt even the most well-reasoned bets in an instant, making luck the true determinant of success.

The illusion of long-term gains

A few early wins may create the impression of a profitable endeavor, but the odds are systematically designed to favor bookmakers. This imbalance ensures that over time, most participants experience losses. The allure of a “big win” is often overshadowed by the harsh financial reality that sustained profitability in sports betting is almost impossible for the average player.

Financial and emotional risks

In Ghana, sports betting has become a beacon of hope for those seeking financial breakthroughs. However, this hope often leads to reckless behavior. Many individuals borrow money, drain their savings, or neglect essential responsibilities in their pursuit of an illusory jackpot. Such habits can spiral into severe financial distress, leaving individuals and their families in turmoil.

The emotional toll is equally devastating. Repeated losses can cause stress, anxiety, and depression, fostering a dangerous cycle of desperation. In extreme cases, betting addiction takes root, leading to compulsive gambling behaviors that are difficult to break.

Real-life consequences: Stories of loss

Real-world examples illustrate the perilous consequences of sports betting. In 2022, the Daily Graphic reported that an administrative officer with Kabfam Company Limited was remanded in police custody for embezzling over GH¢1 million from his employer to fund his betting habits.

More recently, an accountant admitted in court to stealing funds from his employer to gamble on Aviator, an online betting game. His statement highlights the depths of despair:

“I spent the money by playing Aviator. I staked it and never won. I was desperate to win but lost.”

These stories underline the devastating impact sports betting can have on individuals, their careers, and their families.

Source: graphic.com.gh

About Post Author

Szarlot

I am a fan of casino games especially roulette and blackjack. After that I analyze current events in the gambling industry.

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Szarlot

I am a fan of casino games especially roulette and blackjack. After that I analyze current events in the gambling industry.