Does Sports Betting Satisfy the Conventional Investment Criteria? Evidence from Administrative and Socio-economic Data from Tanzania
Josephat Lotto
College of Business Education
Sports betting has become one of the fastest-growing sectors in Tanzania, generating substantial tax revenues and attracting greater participation, particularly among youth population already facing the unemployment crisis. Meanwhile, betting is increasingly regarded by many young people as a legitimate investment platform rather than entertainment, as is commonly the case. This study examines whether betting satisfies the core characteristics of investment and assesses associated risks using Tanzania-specific evidence. The study applies administrative data from the Gaming Board of Tanzania (GBT) and secondary data on youth employment from NBS. Using an investment assessment framework based on value creation, expected returns, and investor control, the study evaluates betting against established investment principles. The findings indicate that betting does not satisfy conventional investment criteria. Unlike productive investments, betting does not create underlying economic value, offers negative expected returns for most participants, and provides limited control over outcomes. The findings further suggest that betting functions primarily as entertainment and, for some young people, as a perceived response to economic uncertainty rather than a viable investment strategy. The paper recommends strengthening financial literacy programs, discouraging more participation via taxation, improving consumer-protection mechanisms, enforcing age restrictions, and expanding employment opportunities for youth as part of a broader harm-reduction strategy.
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