Ethiopia Arrested 38 Betting Firms – They Had No Licences to Begin With

Key Points

• Ethiopian authorities arrested the owners of 38 betting enterprises and froze their accounts as part of a sweeping crackdown across seven sectors.
• All 38 firms were operating without valid licences; Ethiopia had already revoked every sports betting licence in December 2025.
• Funds were allegedly moved offshore through cryptocurrency conversion and hawala networks, directly threatening Ethiopia’s foreign currency recovery under its $3.4 billion IMF programme.

Thirty-eight betting enterprises had their owners arrested and bank accounts frozen by Ethiopian authorities in early September 2026. Every report on this story leads with the same charge list: tax evasion, concealed revenue, illicit financial flows. Familiar language for a familiar story. Except buried inside the official statement from Ethiopia’s Government Communication Service is one detail that most coverage has skipped past entirely: Ethiopia currently has no legally licensed sports betting operators, according to the Ethiopian Lottery Service. These 38 firms were not just evading taxes. They were operating without a single valid licence between them. That is where the story actually begins.

A Sector That Was Already Shut Down

The Government Communication Service stated that “actions were taken against 38 betting enterprises that concealed customer data to evade taxes, hide revenue, and conduct illicit financial flows,” with owners taken into custody and bank accounts frozen. What the official announcement does not explain is the sequence that led here.

Back in November 2025, Ethiopia’s National Intelligence and Security Service announced the arrest of sports betting company owners and their accomplices suspected of concealing over 100 billion birr in revenue owed to the government, with investigators finding that companies had been concealing income by converting it into foreign currency through cryptocurrencies and various international hawala money transfer networks, effectively moving capital out of the country illegally.

This investigation led to the license cancellation in December 2025. The Ethiopian Lottery Service cancelled the licenses of 22 companies dealing in betting in sports as a result of an investigation carried out on them. This was because of their involvement in huge cases of embezzlement, evasion of taxes, and other illegal financial practices under investigation by the national security agencies. 11 days later, the Ethiopian Lottery Service cancelled all the sports betting licenses in Ethiopia on 15 December 2025. 9 months later, 38 companies were still operating.

One Crackdown, Seven Sectors

The betting firms were not even the headline of the August 2026 government announcement; they were one item on a long list. Government Communication Service Minister Enatalem Meles said corruption and illegal practices have remained major challenges to Ethiopia’s development efforts, with organised actors attempting to exploit financial and trade systems, contributing to foreign currency shortages, inflationary pressures, smuggling, and artificial shortages of essential goods.

In the trade sector, more than 7,000 businesses and warehouses involved in illegal activities were sealed. In financial operations, 169 Ethiopian and foreign nationals accused of illegal money transfers, informal remittance activities, and black-market foreign currency dealings faced legal measures. Thirty-six individuals accused of organised fraud involving bank customers’ accounts were arrested and their accounts frozen, while seven cryptocurrency applications allegedly linked to illegal transactions were blocked. In the revenue and customs sector, 109 suspects were identified for allegedly reducing tax assessments, issuing fraudulent receipts, and manipulating systems to reduce government revenues, with 91 individuals placed under legal custody. The betting firms sat at the intersection of several categories in this sweep: tax fraud, cryptocurrency misuse, and illicit cross-border money movement.

How the Money Was Moved?

The method matters as much as the amounts. Investigators found that companies concealed income by underreporting betting volumes, handling funds through cryptocurrency to mask origins, transferring money via international hawala systems outside formal banks, and working with payment firms to understate transaction amounts. Some companies lacked permanent offices, while others shut down or vacated premises to avoid inspections.

This was not petty tax avoidance. Minister Enatalem Melese said: “These entities infiltrated the financial and commercial systems to commit severe economic sabotage aimed at destabilising the home-grown economic reform.” The phrase “economic sabotage” is deliberate. Ethiopia is mid-programme with the International Monetary Fund, and foreign currency leakage at this scale is not a minor accounting issue.

The IMF Programme Is the Real Stakes

The completion of the fifth review under Ethiopia’s Extended Credit Facility was done by the IMF Executive Board in July 2026, enabling the immediate release of approximately $464 million. The Extended Credit Facility (ECF) arrangement for Ethiopia, which totals about $3.4 billion when the programme was approved in July 2024, is meant to help the government implement its Homegrown Economic Reform Agenda.

Foreign currency reserves had only just begun to stabilise. Foreign exchange reserves were projected to rise to 2.2 months of import coverage, a critical improvement for a country that had struggled with acute dollar shortages for years. Every dollar moved offshore through crypto conversion and hawala channels works directly against that progress. The government’s own language in the August announcement connects these dots clearly; illicit outflows from the betting sector are not a standalone regulatory problem. They are a direct threat to Ethiopia’s macroeconomic scorecard.

Expert Analysis

Here is the question nobody in this coverage cycle is asking: if Ethiopia revoked every sports betting licence in December 2025, why did it take until September 2026 to arrest 38 operators who were openly still running?

We think the enforcement gap is more revealing than the crackdown itself. A government serious about protecting a $3.4 billion IMF reform programme from what its own minister called “economic sabotage” would not wait nine months after shutting down an entire sector before removing the people still operating inside it. The firms had no licences, no legal cover, and no formal banking access after December 2025. Yet they continued. That points to one of two things: either the enforcement infrastructure is genuinely too thin to act faster, or certain networks were tolerated until political conditions demanded a response.

The contrast with Ethiopia’s licensed fintech sector makes this harder to dismiss. NBE Banking Supervision Director Frezer Ayalew issued an official five-page letter in April 2026 to the Ministry of Revenues, clarifying that major data differences existed and providing corrected datasets, yet in May 2026 the Ministry of Revenues issued a binding order to freeze all accounts belonging to Arifpay, citing a refusal to pay 818 million birr in assessed back taxes. Shortly after, tax authorities forcibly liquidated 818 million birr directly from Arifpay’s accounts, leaving the firm without working capital, with similar forced sweeps targeting Chapa and SantimPay. When affected fintechs appealed to the Ministry of Justice, The Reporter Ethiopia found the Ministry declined to intervene, stating that under existing laws no administrative body could reverse a decision passed by the Ministry of Revenues. Three of Ethiopia’s largest licensed payment gateway operators, Chapa, ArifPay, and SantimPay, jointly wrote to the NBE Governor in May 2026 describing the enforcement as procedurally premature and in violation of Ethiopian law, copying the Prime Minister and Minister of Justice directly.

Licensed, compliant fintechs had their accounts emptied within weeks of a disputed tax figure. Unlicensed betting operators ran for nine months after their sector was legally dissolved. We are not arguing the crackdown on these betting firms is wrong; the evidence of tax concealment, crypto tunnelling, and hawala use is serious and well-documented. But the sequencing raises a question the government has not answered. In Ethiopia’s current enforcement environment, being visible, licensed, and digitally traceable appears to make a business more exposed, not more protected. That is not the signal a country trying to attract private sector investment into an IMF-backed reform programme should be sending.