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SportPesa Quits Kenyan Market Over New Tax Dispute

SportPesa, leading betting firm in Kenya, has closed shop over the country’s decision to raised betting tax for 2019-2020 fiscal year to 20 percent.

On the 19th of September, Kenya’s Parliament voted unanimously to increase the betting tax on stakes to 20 percent in the 2019-2020 budget, an increase of 10 percent, which treasury had proposed in the country’s July budget. On the 25th of September, members of parliament voted in the new law.

The betting firm, in its statement, said that it would cease operations in Kenya until the government changes the law. SportPesa also stated that the members of parliament passed the law without really knowing how the betting industry works. The new law, according to SportPesa, would result in the company incurring bills twice what it is making in revenue.

From the firm’s analysis, the total bill that it would incur in terms of tax would amount to 76 billion shillings.

SportPesa was in the process of resuming operations in the country after a short dispute over a similar law that required operators to pay a 20 percent tax on each betting stake. The dispute dates back to the 1st of July, which is when gambling regulator BCLB refused to renew the operating license of SportPesa and more than 20 other betting firms.

The gambling regulator, in its refusal, stated that operators were required to pay tax on both winnings and stakes, and as a result, the owed close to 60.6 billion Shillings as unpaid tax.

The states ordered Safaricom, Kenya’s leading Telco, to block PayBill codes for each of the suspended firms, which means punters would not be able to upload funds to their accounts and place bets. SportPesa stated that this move went against a court order and that the firm would take appropriate legal action.

SportPesa has canceled all sponsorship deals with local teams and sent home more than 450 employees. The firm stated that exiting the Kenyan market would not interfere with operations in other countries.

Source: https://www.igamingbusiness.com/news/sportpesa-halts-kenyan-operations-after-new-tax-dispute

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About the author

Catherine Wambui

Catherine Wambui

Catherine Nyaga is a freelance writer covering Real Estate and Technology. Her other interests include Nature, pets and accounting. She recently graduate from Nairobi University with a degree in Accounting.

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