Might legalized gambling expose Kenyan microenterprises to survival risks during COVID-19 Pandemic?

Abstract

Microenterprises are very small in size but growth-oriented enterprises largely dependent on founder’s cultural orientation for survival. Kenya enacted a legal framework on micro and small enterprise development in 2012. However, heightened activity of legalised gambling houses in the past decade has exposed microenterprises to survival risks. This has been aggravated by the Covid-19 pandemic, especially lockdowns and other control measures. We find that in the midst of the pandemic, wages are reduced due to lay-offs, revenue-based taxation of microenterprises are reduced due to gambling, but gambling has increased steadily. We observe temporal benefits of gambling in terms of certain jobs and demand for goods, however, individuals are psychologically distressed. We propose policy reforms focusing on initiatives that sustain short-term microenterprise liquidity as well as shifting operations to the digital space.