For the second time since 2018, Kenyan betting giants, SportsPesa, have stopped all of its sponsorship operations in the country. This is due to the current clash the company has with the country’s government over alleged tax returns.
The management of the company made a public announcement of its decision to cancel all its current sponsorship deals saying it has informed the concerned parties of its decision as is required.
Among those affected are the Kenyan Premier League management, Kenyan Premier League clubs Gor Marla and AFC Leopards. The company announced its decision to end the sponsorships because of how dicey things were looking for them.
SportPesa, which recently had its gaming rights withdrawn and its online payment channels frozen, cannot operate until it resolves its case with the federal government. The company said to owe a debt accruing to several millions of dollars in back taxes.
The company, however, is not the only one in the heat, as 26 other betting companies also had their gaming rights suspended by the government on the 1st of July.
The total sum believed to be owed by these companies amounts to about $586 million and has seen the major players SportsPesa, rivals BetIn and 1xBet, visiting the federal High court in a bid to overturn the government’s orders which are said to have come despite the court’s initial ruling to have the suspensions stayed.
The major dispute between the two parties, the government and the operators, is the government’s claim that the operators have not been deducting the expected 20% on winnings tax. However, SportPesa responded that its capacity to do so was limited due to proceedings in court.
Following the review of the nation’s betting laws in 2018, operators have been required to pay a total of 20% tax on its betting returns, this includes the profit and the original stakes as well.
This announcement comes after an initial statement made by SportPesa Boss Ronald Karaurl, that the outfit would continue with their sponsorship commitments. The company seems to have reviewed its position due to the government’s sanctions and the constraints the company has had to experience as a result.
Due to the government’s suspension order, SportPesa has been unable to make payments to its winners or receive deposits from its customers, which has seriously affected the company’s local operations.
The company is also trying to enter into new markets, but there isn’t a guarantee of it thriving without the Kenyan market, which happens to be its biggest market.
Management of the company are hopeful that the situation will be resolved favorably as soon as possible and have committed to resume its support of the local league once business is revived.
With the local league set to start its new season in a number of weeks, many of the sponsorship beneficiaries will be hoping the case is settled on time. AFC Leopards being a major concern, as the club is reported to derive about 80% of its funding from its partnership with SportPesa.