Dispute over Shs240m jackpot raises questions

A punter who claims to have won a bet worth Shs240 million is locked in a dispute with the betting operator seven months after he thought he hit the jackpot.

Sunday Monitor has learnt that experts are questioning how the betting house’s operating licence was renewed for another year. The matter is yet to be resolved, leaving Denis Kasibante, 34, in purgatory. 

The betting operator in question, betPawa owned by Chop Gaming Ltd, is among the companies whose licence was renewed in 2024 by the National Lotteries and Gaming Board (NLGB). 

Observers say that, in practice, the regulator in such a scenario has at hand a suite of possible measures such as freezing the betting operator’s bank account and not renewing its licence until the dispute is settled. It, however, appears that none of the foregoing measures were considered by the Gaming Board before renewing betPawa’s license.

For Mr Kasibante, a 34-year-old clinical officer in Sheema District, sports betting, and in particular staking bets on European football games, is a hobby that seemed to have paid off on August 26, 2023. 

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Back then a series of bets that cost at least Shs30,000 came up flush to the tune of an eye-watering Shs242.8 million. The winning feeling was short-lived, however, as he was swiftly denied a payout.

“The moment I saw my winnings come on my phone, I called my wife. I told her from today onwards, poverty is gone [...] I knew I had won. Money came to my account, I tried to withdraw because I wanted to confirm to my wife that actually this money works,” he told Sunday Monitor in an interview this past week.

Short-lived joy
When Mr Kasibante tried to transfer Shs5 million from his betPawa account to his mobile money account, he was unable. The winnings were spread across two betPawa accounts linked to his two SIM (Subscriber Identity Module) cards, one of which is an MTN line and the other an Airtel one. When the first line rejected the transaction, he tried his luck on the other to no avail. 

On calling the betting house, Mr Kasibante was informed that there was an error in the system. After two days, the clinical officer called betPawa’s customer care service.

“They were like: ‘Sir, you will forgive us. The day you placed your bets there was an error in our system. You placed the bets when the time had gone’,” he disclosed.

BetPawa claimed that Mr Kasibante’s bet was cancelled. His stake was reimbursed because the matches on the bet were cancelled. To say that this came as a surprise to Mr Kasibante would be an understatement. 

Curiously, among the matches listed as cancelled per the betPawa communique was a match between Arsenal and Fulham where both London teams played out a draw on August 26, 2023. Similarly, matches between Brentford and Crystal Palace; Everton and Wolves; as well as Manchester United and Nottingham Forest were cancelled by betPawa yet they all went ahead.

Further, in a January 5 letter, betPawa claimed that the disputed bet—placed on August 26, 2023, during the match between Huddersfield Town and Norwich City that kicked off at 5pm—was placed at 5:31pm “for the away team to win, at a time when the away team had gained a significant advantage,” having taken a two-goal lead by 5:17pm, “rendering the 5:31pm bet invalid”.

Mr Kasibante, citing his betting slips, disputes the assertion that he bet on a live event. 

“That is not true,” he told Sunday Monitor, adding, “I had placed my bets before the matches had even started [...] When you place a bet when the match is ongoing there is a signal that [the] company brings to show you that actually you placed a bet on a live event […] on all my tickets that signal misses.”

Who is fooling who?
Per the betPawa position statement Mr Kasibante’s betting slips must have the signal. The betting operator specifically cites rule 11 that states: “The company reserves the right to correct obvious errors with the input of betting odds and/or the evaluation of betting results even after the event or to declare affected bets void.”

BetPawa’s letter was published two weeks before the second mediation hearing between it and Mr Kasibante. The mediation was convened by NLGB on January 19. The resolution of the first mediation held on September 15, 2023, had left Mr Kasibante dissatisfied.

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Speaking about the hearings, Mr Kasibante claims that betPawa is yet to provide sufficient evidence to justify its decision to cancel his bet and deny him his winnings. 

“They were sent back to go and bring more evidence to show that this person had placed the bets when the event had already [started],” he said, adding, “Up to now no result has been brought out.” 

Mr Kasibante further claims that during the January 19 hearing betPawa had not adduced evidence of the system error that put paid to his windfall.

“They said their system auto deleted the error,” he told Sunday Monitor.

An outlier
Per Section 4(m) of the Lotteries and Gaming Act 2016, the Gaming Board is mandated to receive, investigate and arbitrate complaints relating to lotteries, gaming, betting and casinos and take appropriate action. 

During the financial year 2021/2022, the Board received and resolved 26 disputes worth Shs78m. Per the NLGB’s Ministerial Policy Statement for the financial year 2023/2024, all the cases in question were resolved.

During the first half of the financial year 2022/2023, the Board resolved all eight disputes it received worth Shs30m. As such Denis Mudene, the executive director of the NLGB describes this case as unique given that typically such cases are prone to swift resolution. 

“We have not received a complaint where outrightly an operator has refused to pay. If the facts are against you, there is really no way you can get out of it. Otherwise if we cash out your guarantee then you don’t have a licence,” he told Sunday Monitor.

Mr Kasibante’s case is a test of the Gaming Board’s arbitration and dispute resolution mechanisms. The aforesaid mechanisms have in the past come under scrutiny following the findings of the report of the Auditor General on the financial statements of the NLGB for the financial year ended June 30, 2022. 

The report found that staff training in corporate governance in order to strengthen arbitration and dispute resolution was not undertaken despite the activity being budgeted for. 

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Further, the report found that the finance minister was yet to develop the regulations pertaining to the handling of complaints and determinations of disputes under Section 70 (2l) of the Lotteries and Gaming Act 2016. 

“The absence of such regulations is an unregulated industry with risks of abuse and possible exploitation of gamblers,” the report reads in part.

What next?
Section 40 (2) of the Lotteries Gaming Act provides that licensees are required to provide a security bond which the Gaming Board shall use to  pay taxes or employees of the licensee or persons participating in any activity organised or provided by the licensee in the case of default. 

BetPawa has a general betting licence and per the Lotteries and Gaming Licensing Regulations 2017, Schedule 2, betPawa is required to have a Shs500 million bank guarantee or security bond to qualify for a licence. 

Should the Gaming Board’s arbitration process favour Mr Kasibante, the Gaming Board would liquidate betPawa’s bank guarantee to the tune of Shs240 million. 

Consequently, betPawa would be required to put up more money to ensure its Shs500 million security bond is deposited in cash with the bank which would issue the guarantee before its licence is renewed. 

The fact that there was a possible claim on betPawa’s bank guarantee and there was a possibility that the security bond could, therefore, be drawn down below the amount required of a licensee, suggests that betPawa’s licence renewal should not have been a foregone conclusion and casts doubt on the due diligence the Gaming Board undertook prior to renewing this particular licence.

Further, betting operators seeking a licence to operate are required to register their betting software with National Information Technology Authority Uganda for certification and to submit their terms and conditions for review by the Gaming Board. Mr Kasibante’s case suggests that this oversight is not sufficient. 

Legal recourse
BetPawa’s terms and conditions notwithstanding, notions of natural justice and fairness do come into play in such disputes.

“Upon a punter winning, a punter should be paid out; those are the key principles [...] You realise some of these terms and conditions may be unfavourable to the punter. Probably if a punter won a big stake, these terms and conditions may defer on the terms of payment,” Mr Paul Musede, an advocate with experience in the gaming industry, says.

“And the presumption is that once the punter was entering into the software and engaging in betting activity, he was complying with those terms and conditions. He probably didn’t read the terms and conditions. However, it may go beyond the National Gaming Board […] He could probably instigate a suit in the High Court based on the amount [of the award he may have won],” he adds.

Negative perceptions about the gaming sector per the Ministerial Policy statement 2023/2024 remain a challenge. 

With a National Lottery in the offing, Mr Kasibante’s woes will likely serve to entrench the view that even when a punter gets lucky the house always wins.