Enock Ogega, an engineer at standard gauge railway, engineer after he
won Betin’s Sh20 million jackpot last week. PHOTO | JEFF ANGOTE
Betting company Betin last week awarded jackpot winner Enock Omweri Ogega Sh20 million, which he won after placing a Sh99 bet.
However,
in an unlikely marketing move for a company that thrives on consumers
continuously spending money on its platform in order to win, it offered
the jackpot winner a financial adviser.
“At Betin we
do all we can to ensure our customers play responsibly. Part of this
practice involves us offering financial support to customers who win
large amounts with us. This forms part of our holistic approach to
responsible gaming,” said Betin managing director Leandro Giovando.
“Many
lives are changed through wins, and knowing that we are enabling the
winners to make smart decisions that will ensure comfort in the long
term is important to us.
The financial adviser,
therefore, provides professional and experienced guidance on how best to
maximise the customer’s new found wealth.”
Indeed,
winning a jackpot is life transforming. But research shows that it can
sometimes end up having a devastating financial impact, increasing the
risk for winners of going bankrupt within five years, compared with
those who earn their money progressively.
This is
attributed to the unexpected nature of the win, which does not see funds
acquired progressively as consumers also learn how to manage their
growing financial base, with winnings often considered as income rather
than capital and consumers ending up spending frivolously and frequently
creating tragedy in their lives.
“It also depends on
one’s tendency, how inclined is the consumer to poor expenditure and
poor financial management. As an individual if you do not have a good
history with financial management then you are destroyed if you win a
jackpot,” said Victor Rateng, senior programme officer at Twaweza East
Africa, an advocacy research group.
“In most cases,
people that win them are usually not in formal employment, they are in
casual jobs, which means they live from paycheck to paycheck. So, in
such a case, if you give someone Sh5 million or Sh10 million, their most
immediate needs will probably be a house and most of the things they
have missed out on in their young adult life. So the money just vanishes
on extravagant goods.
“But if given to someone who has been working for five to 10 years in the corporate sector, their thinking may be different.
“Although at the end of the day, individual characteristics will determine a lot how one spends such money.”
Mr
Ogega, for instance, is a concrete engineer, a casual job and admits to
betting continuously, even after suffering losses, in the hope that he
would bag the jackpot.
Betin’s move to provide a
financial adviser for him could go a long way in ensuring that his win
creates a sustainable gain, thereby further supporting consumer
understanding of jackpot wins as positive.
In
a study conducted in the US on the financial consequences of winning
the lottery, the researchers from the University of Kentucky, University
of Pittsburgh and Vanderbilt University, found that individuals who
receive a large sum of money may engage in mental accounting, treating
the money as “house money” and use it to take on additional risks or
develop a taste for luxury goods that outlasts the money.
“We investigated the extent to which receiving large lump sums of cash affect bankruptcy in the short- and long-term.
“To
distinguish the effect of the transfer from other confounding factors,
we compare lottery players who won between $10,000 and $50,000 or
between $50,000 and $150,000 to those who won less than $10, 000,” read
the research report.
“The results indicate that while
the lump-sum payments reduce the probability of bankruptcy in the first
two years after winning in an economically and statistically significant
way, this reduction is followed by statistically significant increases
of similar magnitude three to five years after winning, as individuals
may lack the knowledge to handle large lump-sum payments wisely.”
- African Laughter
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