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Cablegate: A Sure Bet: Horse-Betting Fills Mali State's

VZCZCXRO2521
RR RUEHMA RUEHPA
DE RUEHBP #1322/01 3130732
ZNR UUUUU ZZH
R 090732Z NOV 07
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 8397
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 02 BAMAKO 001322

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EFIN ML
SUBJECT: A SURE BET: HORSE-BETTING FILLS MALI STATE'S
COFFERS

1. Summary: On October 25 off-track horse-betting fans in
Mali were able, for the first time, to place bets on
real-time horse races beamed direct from race tracks in
France. The two live-feed offices complement what has
become, since 1994, one of the most profitable state-owned
enterprises in Mali and a key source of income for the Malian
government. Despite legal and religious barriers that, until
1994, rendered organized gambling taboo in Mali, profits from
off-track betting now gross more than USD 42 million annually
for the Malian government, some of which funds a variety of
development projects, but most of which is classified by the
Malian government as "general budget support." End Summary.

--------------------------------------------- ---------
ALL BETS ARE ON: PMU JUMPS LEGAL AND RELIGIOUS HURDLES
--------------------------------------------- ---------

2. Off-track betting on French horse races was introduced in
Mali in 1994 as a revenue-generating activity for the Malian
government. Government officials tasked the then-Secretary
General at the Ministry of Commerce and Transportation,
Harouna Niang, to bring the French-based joint venture
company Pari Mutuel Urbain (PMU) to Mali to help reduce the
national deficit while building up basic infrastructure. The
government's intent was to allocate the profits for "anything
of general interest."

3. Niang's first challenge was overcoming legal restrictions
that appeared to outlaw gambling in Mali. Article 186,
Section VI of the Malian penal code outlaws gambling "except
where the law fixes certain conditions." Malian lawmakers
consequently ratified a law fixing off-track betting as one
of these "conditions." Overcoming religious objections to
gambling proved more challenging. In a country that is more
than 90 percent Muslim, many Malians believe gambling is
forbidden by Islamic law. Opposition to PMU-Mali is easy to
find among Mali's Muslim leadership. In the words of one
Sunni Imam, Cheick Amadou Diakite, who runs a large mosque
near Bamako's international airport, "all money derived from
games of chance is dirty money." In response to objections
from Mali's Islamic community, government officials argued
that the Prophet Mohammed himself enjoyed attending horse
races and added that most of the horses raced in France today
are of Arabian descent.

4. PMU's franchise in Mali was organized as a 75%
state-owned enterprise, leaving 25% to private investors so
that PMU-Mali could be organized under private rather than
public equity law. A company with even one private
shareholder in Mali is accountable to private instead of
public law which in theory makes the enterprise more
transparent as the company must report to a Board of
Directors, composed of public and private members, instead of
reporting only to a government ministry.

-----------------------
THE MONEY IN THE HORSES
-----------------------

5. According to Idrissa Haidara, President of PMU-Mali, PMU
generates around USD 42 million in profits for Mali annually.
During PMU's tenure, Mali has allocated USD 18 million to
projects such as ramping up security forces, improving
education by building high schools and auditoriums, creating
a fire department and emergency response system, extending
the national television network, and developing a program to
fight poverty. The remainder of the funds have been used for
general budget support.

-------------------
EMPLOYMENT CREATION
-------------------

6. Haidara believes that the horse-betting business has
created more than 2,000 direct and indirect jobs for the
domestic economy. The PMU counts 75 permanent employees, 800
ticket sellers, and 300 ticket sorters. In addition to these
direct hires, the PMU has created indirect employment with
printing businesses and betting newspapers.

7. Certified vendors sell betting slips at formal or
informal kiosks around the country, and may also employ
others to sell betting slips for them for a percent of the
profits. Vendors make a 3% commission on their sales. One
vendor estimated he could make anywhere from 50 to 400 USD
per month. Vendors work in all regions of the country except
Kidal in northern Mali, where distances are too far to allow
betting slips to make their way to PMU headquarters in
Bamako. Most of those betting on races in Mali are men.

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COMMENT

BAMAKO 00001322 002 OF 002


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8. Since its arrival in Mali in 1994, PMU has clearly made
substantial sums of money for shareholders in both Mali and
France, and is now an entrenched economic interest. While
Malian Islamic leaders continue to oppose PMU-Mali and
state-sanctioned gambling, they have largely accepted the
fact that off-track betting is now a facet of Malian society.
While some of the funds have gone to worthy projects, it is
unclear that operating costs and "general budget support"
have generated more jobs than if Malians spent their funds in
other ways. That said, PMU has met with widespread public
acceptance, provides a badly needed revenue stream for the
goverment---and some betters occasionally win.
McCulley

© Scoop Media

 
 
 
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