Betting Culture Among Africa’s Unemployed Youth: A Symptom of Societal Neglect


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With the advent of mass unemployment coupled with a disinterested political class, who are more concerned with keeping scores between themselves than working to improve the social welfare of society, youth who feel left alone will seek various activities to fill such a vacuum. I would not have expected that in the event of lack of employment coupled with price rot (inflation), one would have resorted to a strange activity of betting about events they have no marginal information competence to entertain themselves or fill the void left with lack valuable employment.

The assumption is that the provision of prediction markets for uncertain events gives those who bet an incentive to be correct. The market will have been a good mechanism to filter out signals and noise and remove those without skin in this game only if the predictors are, on average, somehow informed.

I am not sure what to call it, but betting is probably one activity where someone is happy to lose R100 but also gets outraged to pay the same amount for a cup of tea. Of course, the house does not care about the immorality of exploiting the worst in human nature. It will hire your favourite celebrity to advertise the odds. It will be interesting to know whether the celebrities themselves are betting! Media houses compete to nudge you to undertake bets which defy reality. Even predictions, which are covered with all signs of irrationality, have never deterred participants from placing bets.

Walking around any capital city in Africa today, one will find many betting points called “Kibanda Umiza” or whatever they call it in your locale. The sole role of these shops has been to occupy these “wall people”—the name given to young people aged 17–23 who are unemployed in Algeria.

Read related: We Make Billions from Betting, and It Manifests at Its Worst…!

They are named such “because all they do is lean against the wall and watch street go by”. Bruce Berkowitz views gambling as “in an extreme form gambling is a sickness” It is hard to refute his claim since some people prefer gambling and losing to not gambling at all.

Besides- being unemployed, the nation which has failed to create jobs and run the risk of social unrest from the mass unemployment devised a mechanism to keep the unemployed occupied, betting on European leagues (all sorts of them, not merely football) –oddly end of the world sports contest — not based on any game theory or statistical competence strategies but by pure close your eyes and choose.

Understanding the difference between risk and uncertainty is not the required knowledge on the player’s side- it is the knowledge received on the side by the game designer. On the choice of what to bet on, the frequency of play does not improve the odds of the player, however in aggregate it improve his/her cumulative loss, whether they know it or not.

Despite the type of game these folks play- it is designed in a manner that they keep playing, which is both good for the house and the lazy political class who have absconded from seeking better options for the youth. The ability of players to differentiate risk which is measurable and priciable to uncertainty, which is unmeasurable, and one cannot attach a price it is not something privy to unemployed youth in the continent.

However, if one designs a game which provides a potential signal of potential eventual winning chance- people will not care how big those odds are stacked against them. Without a better option, such options are better than none. The net winner in this arrangement is the house and the state. Betting is the best way to tax the unemployed- the joke goes as those who bet pay tax twice, for being ignorant of the game; they are playing and the common consumption tax.

The actors do not immediately understand even the risk dimension regarding the danger of impulsive betting behaviour. Even though the risk dimension tends to reduce the need to worry about them rather than having one risk, it makes one wonder how long one plays the game before figuring out the Ponzi nature of it.

Fundi Mudi’s excitement at the prospect of him winning big one day tells the tale. He works on piece jobs in construction sites and shares his erratic income flow with the house, betting on football matches in far geographies in which he has little knowledge of the team or the league. At best, he try to figure out whether the team won the last few matches- not knowing past performance is not a good proxy for the future performance.

Even the best statisticians often come behind in their predictions with all their Monte Carlo simulations and their massive chest of knowledge on the subject. “Kibanda umiza” is a market place designed for “Mudi” and the likes to engage in trying to solve a multi complex multi-dimensional problem of possible outcomes by thumb sucking.

Also, read How Can Tanzanian Youth Be Convinced That Agriculture is a Better Choice Than Gambling/Betting?

Yes, “Kibanda umiza” is there to facilitate wealth transfer from those who gamble to the house. After all, the betting house leverages the basic instincts of human nature: greed, laziness, and the desire to get rich quickly. Humans want less complex, minimum effort to gain maximum reward. This explains why people like “fundi Mudi” take risks and bet and also why betting has existed throughout history.

My friend @lswendo likes to think that prediction markets are the mechanisms through which the markets communicate true information. However, he does not tell me whether such true information is that, in the aggregate, “Ramli” players will lose! He does not tell me that the player understands the price design- that price is not a single dial that aggregates all the inputs, nor is he aware of such.

He wonders whether players willingly play a game of crossing a high-speed railway line blindfolded, which is such a fantastic idea. Of course, price has many dimensions, whether one knows it or not.

For every transaction, especially those where information asymmetry rains supreme, the guy on the other side of the table is often well-informed about the game, has more money than you, has more power than you, and has more experience than you who is betting. The ultimate sucker at the table is you.

One would have wished the players to have some guarding rails in these contests. The truth is that the ultimate loser, when all is said and done, is a society replete with gamblers who are used to taking reckless bets and can’t reason any more. This is probably not a desirable outcome we all want, but it is the one we are cultivating.

“I think the record shows the advantage of a peculiar mindset-not seeking action for its own sake, but instead combining extreme patience with extreme decisiveness”- Charlie Munger

Ezekiel Lengaram is a Researcher in Economics at Wits University. My teaching and research focus are on the theory of Macroeconomics, Computational Economics and Applied Computational Mathematics

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