Effects of working capital management on profitability in the gaming industry (A case of casinos in Mombasa county)

Abstract

The Gaming industry in Kenya has been active since 1966 following enactment of the Betting, Lotteries and Gaming Act, Cap 131, (1966).According to the Betting Control and Licensing Board, the first Casino in Kenya was opened in Nairobi in 1969.Working Capital Management in Casinos for along time occupied a back seat in the management processes until recently when stiff competition in the industry set in as a result of more casinos being licensed to operate, leading to shrinkage in the market shares of most Casinos. The purpose of this study was to establish effects of Working Capital Management on Profitability in the gaming industry in Kenya. The research adopted the Descriptive Research design approach. Structural Questionnaires and Interview guides were the main instruments for data collection. Data collected was analyzed using Descriptive Statistics. The study established that Preparation of cash budgets and the establishment of optimum cash level help in managing cash on a day to day basis i.e. it ensures that there is adequate amounts of cash on hand for maturing debt obligations and also to minimize transaction costs in acquiring cash when deficiencies arise.The study established that investment in Information Technology has a positive association with casino profitability. The study also established that there is a strong relationship between casino's performance and management's technical competencies The study concluded that there is need for casinos to adopt best industry practices such as suitable strategies, technologies and processes aimed at managing their working capital efficiently so as to remain competitive.