In One Uganda Slum, Gambling Is a Prudent Financial Investment

The midafternoon sun is high over Kabalagala and the streets are buzzing. An English Premier League soccer match has just ended, and the neighborhood's betting halls are filling up quickly in anticipation of upcoming games.

Araphatt Promice pushes through the crowds at Top Betting Spot to check odds. He lost his most recent bet.

"In gambling, there is winning and losing," he says with a shrug as he studies the printed charts. "I normally lose more often than I am winning."

Kabalagala is the unofficial heart of gambling activity in Kampala, the capital city of Uganda. Its main street, Kabalagala Road, is lined with 24-hour betting halls whose slot machines shine brightly at passing commuters.

Araphatt Promice doesn't keep track of how much money he loses, but over the years those losses have put him in debt. The 26-year-old works in a betting hall part-time and has a habit of indulging after his shifts.

"I can console myself," he says. "I can lose 10 times, but on the 11th time, maybe I can win."

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In 2012, gambling was named a "new driver of chronic poverty" among young people in the country by ActionAid International Uganda, Development Research and Training, and the NGO Board of Uganda, which reported, "Many youth are abandoning participating in productive activities for gambling, especially sports betting."

Gambling earns the government almost $5 million a year in taxes. That may not sound like much, but about 40 percent of Uganda's population lives on less than $1.25 per day. In addition, there are countless illegal betting establishments throughout the country paying no taxes on what they make.

According to Uganda's National Lotteries Board, there are more than 1,000 registered gambling centers in Uganda owned by fewer than 50 registered gaming firms. Their casinos, lottery houses, pool clubs, and sport betting halls run around the clock, drawing in hundreds of thousands of people each day.

"The only limit is your capacity to roll the dice," says Denis Wabwire, a floor attendant at Ultimate Betting Company on Kabalagala Road, as he leans against one of the slot machines at the crowded gambling hall. "Something should be done about it…. There should be some rules put in place for people, like how much money people can use as stakes."

The burly 30-year-old once gambled regularly at a roadside craps table, but quit when he realized he was spending more than 80 percent of his salary there each day.

In 2013, the National Lotteries Board made a move to control the gambling industry by doubling betting company license fees to nearly $3,500 and forbidding them from setting up shop near public facilities including churches, markets, and government offices. When those measures failed to curb gambling, National Lotteries Board chairman Manzi Tumubweine issued a warning to Uganda's young adults.

"Gaming is not a solution to poverty, it's a means of leisure," he said at a press conference in January. "Although the problem in our society currently is mass unemployment, you cannot make money where money is not."

Betty Basirika, a professional counselor for Kampala's Family Life Network, says that poverty and unemployment drive thousands of young Ugandans between 18 and 30 years old to betting halls. She sees several young clients per week at her office near Kabalagala for counseling resulting from a "financial crisis" due to gambling debts.

But one small gambling association in Kampala has figured out to turn gambling into an investment.

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As it does everywhere else, the house always wins at the Namuwongo Bukasa Games Association. The difference is, the gamblers are also the house.

"For us, we are not gambling," says Christopher Othieno, the association chairman who has been a member for 17 years. "Gamblers, they go to machines where you can spend millions of shillings in minutes…. We just come here to play, and that is where we can save our small money."

Every day, members meet by a yellow shack on the outskirts of the Namuwongo slum. There, they play cards and a dice game called Ludo, which is similar to Parcheesi. The stakes are less than $2 a game — relatively low for residents of Kampala. (Ugandans in urban centers tend to have more money than those living in rural parts of the country.) This means no one risks betting away a month's salary, losing school fees, or going into debt.

The winner of each game wins the pot — minus 20 percent. That take is stored in a community savings fund for distribution to members at the end of the year. Othieno wouldn't say how or where it's stored, however. He fears attracting the attention of thieves.

In 2013, the association accumulated nearly $6,300, and at the end of the year, each of its members received a $105 payout. According to a recent survey by the Uganda National Bureau of Statistics, that's about one month's salary for the average Ugandan.

"It is a smart way [to gamble] because we just get a little money from our own [games] here, and at the end of the year, we distribute amongst ourselves," says the chairman. "When any member here gets a problem, we have to make sure we pay whatever is required to sort it."

The association began in Naumuwongo more than 30 years ago with fewer than 15 members who paid 17 cents per game. Since then, it has expanded to a membership of more than 50 people, with new participants registering at the start of each year. Four years ago, the association registered with the Kampala Capital City Authority (KCCA), making it a legal, official organization.

Membership standards dictate that in addition to being from the Namuwongo area, registrants must also be sober and actively employed. The standards are designed to keep members from gambling for income rather than leisure — and to prevent young adults from betting irresponsibly.

In addition to the payouts at the end of the year, the association also chooses one member to be the beneficiary of extra cash. The lump sum goes to an individual who has undergone a personal or family tragedy and requires funds for medical treatment, transportation, or funeral costs.

In 2005, that person was Samuel Asiimwe, who unexpectedly lost his father to cancer. He received $17.50 to go home to his village and be with his family — money that covered his unexpected expenses.

"That was the saddest day of my life," he says while sitting on a bench near the Ludo board. "But this group, we are like brothers."

The association provides only what is required to deal with misfortunes, nothing more. This ensures maximum payouts to members, and that the group has enough cash on hand to deal with larger emergencies should they arise.

Smiling, Asiimwe picks up a small orange cup containing the Ludo dice and shoots them across the table. Today, he takes home $5.60 for winning the game.

"In the next four or five years we won't have a poor member," Othieno says while watching the game. "There is no man who will cry for a problem." Women are allowed in the group, he says, but none have registered so far.

The ultimate goal of the association is to make every member financially secure; it even offers interest-free loans to those undergoing financial hardship. A small portion of funds are withdrawn weekly for maintenance of the cards and Ludo board, but the rest of the money remains in the pot for distribution in late December.

Othieno and the other board members don't collect a salary, and during his 17 years of membership, he says there have never been any problems with member theft.

"You can see we are all gentlemen," Othieno says. "In our association here, we don't just let people who we don't know join. You can't just come here and start cutting other people's pockets."

As far as Othieno knows, the Namuwongo Bukasa Games Association is the only one of its kind in Kampala, despite hundreds of other informal gambling groups operating in the shadows of casinos and betting halls.

The association is well aware of the country's youth gambling concerns, says Othieno, who keeps a close eye on all of his members under 30 years old. In addition to requiring them to be actively employed, he and the senior group members monitor their finances to ensure they can afford to bet.

The model has worked for more than 30 years, and the chairman is surprised that more informal gambling groups haven't adopted a similar framework. He suspects few people have heard of the Namuwongo Bukasa Games Association outside of the slum itself, but hopes word will spread in Kampala.

"We are the best association," Othieno says. "If other people are trying to learn from us, I can welcome them."

Heads around him nod in agreement. Attention then returns to the game.

Follow Elizabeth McSheffrey on Twitter: @emcsheff