By Khalifa Hemed
Published September 29, 2019
As two leading gambling firms announced their decision to quit Kenya citing hostile economic environment, a distraught and crest-fallen young man asked me if I knew what would happen to his favourite sport but as I am neither a player, a fan, an investor nor do I have any idea where or how to place a bet, I could only shake my head in the negative.
Yes, Betin, the second largest sports betting firm in Kenya, was the first to throw in the towel on September 27, 2019 after almost three months after the government revoked its trading license over what was described as lack of compliance with tax laws. Come September 28, SportPesa, the largest sports betting operator in the country, too, said it was suspending its operations in Kenya.
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Betin has notified its staff that their jobs will cease to exist on October 31, 2019 due to financial constraints resulting from inability to operate since July 2019 when the Government revoked its trading license.
SportPesa, that has also deactivated its betting platforms in Kenya and declared all its 400 staff redundant, says the business is unsustainable as the government has imposed a 20 percent excise tax on all betting stakes.
“Further compounded by the currently in-effect 20 percent withholding tax on winnings,” SportPesa says in a statement, “the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings.”
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Consequently, SportPesa said it was halting operations in Kenya “Until such time that adequate taxation and non-hostile regulatory environment is returned.”
Saying “The tax is based on a fundamental misunderstanding … of how revenue generation works in the bookmaker industry,” SportPesa said the taxation “will have a damaging impact on both customers and treasury.”
Betin and SportPesa are two of the 27 betting companies–AGB Lottery & Gaming, Chezacash, Saharabet, Betpawa, Premier Bet, Dafabet, Elite Bet, Premierbet, Lucky 2 U, 1XBet, Mozzartbet, World Sport Bet, Atari Gaming, Palmsbet, Bet Boss, Betyetu, Elitebet, Bungabet, Cysabet, Nestbet, Easybet, Kick Off, Eastleighbet, Millionaire Sports Bet and Kenya Sports Bet–whose trading licenses were revoked by the Betting Control and Licensing Board (BCLB) in July 2019.
Both President Uhuru Kenyatta and Interior Minister Fred Matiang’i insist that for betting firms to operate in Kenya they must be tax-compliant.
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Saying “Some firms have been hoarding taxes” and that “the government must get its rightful share to build cultural centres and other developments,” President Kenyatta said at the beginning of the standoff between Government and betting firms in July that “we [Government] have managed to push them to pay and we will continue doing so.”
Matiang’i, who argues that no country has ever developed from gambling businesses and that the Government cannot just watch gambling operators corrupting the morals of young Kenyans, began the crackdown with the arrest and deportation of foreigners who operated gambling outfits in Kenya.
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