The State has lost its bid to freeze betting accounts and seize cash that remains unused for three months in a row amid money laundering concerns.
Parliament has rejected changes to the Betting Bill to empower the Interior ministry to freeze the accounts and ask gamblers to show proof of the source of cash before accessing the money.
This push to vet cash in betting accounts is based on fears that criminals can feed their illicit money into their betting wallets, bet a small share of the amount before cashing out.
But the National Assembly committee on Sports, Culture and Tourism rejected the proposal, arguing that confiscation of the idle cash remains the role of the Unclaimed Financial Assets Authority (Ufaa) — the State agency that administers idle assets, including unclaimed bank deposits, insurance policies and shares.
The government reckons a rapid growth that has seen the gaming industry achieve a combined revenue of Sh204 billion offers criminals seeking to launder dirty money a perfect market.
“Where a transaction has not been recorded in a player’s account for three consecutive months, the licensee (betting firm) shall deactivate the account and report such an incident to Ufaa,” the Interior ministry said in its submissions.
Under the proposal rejected in Parliament, gamblers would have lost cash in the frozen accounts if they did not lodge claims with Ufaa within three months.
Betting firms and gamblers wishing to re-activate their accounts and access cash would have been required to seek approval from Ufaa.
The push to freeze the accounts came a year after the State made it compulsory for all betting firms to report transactions above Sh1 million ($10,000) or suspicious bets to the Betting Control and Licensing Board (BCLB) in the fight against money laundering and flow of illicit money.
Betting firms have since July 1 last year been required to report suspicious accounts.
However, the law does not require betting firms to report the suspect transactions to the Financial Reporting Centre, which is mandated to track illicit cash.
Kenya has been fingered for illicit money inflows from crime, drugs, corruption and shady business deals, which is used to buy high-end homes and luxury cars.
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