SportPesa likely to withdraw sponsorships over betting tax

June 23, 2017 (4 weeks ago)
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Karauri, who was speaking on behalf of the Association of Gaming Operators Kenya, has said the tax is unfair and punitive/FILE

, NAIROBI, Kenya, Jun 23 – Sportspesa Kenya will withdraw all its affiliate sponsorships effective January 1 2018.

The company’s CEO Ronald Karauri says the move follows passing of the Betting, Lotteries and Gaming Amendment Act requiring all gaming companies to render 35 percent of their gross earnings to the government as corporate tax.

Karauri says complying with the government law would mean the company cannot sustain its sponsorship activities going forward.

“It will be impossible to continue funding the sector with the taxes that have been imposed. We shall therefore be giving all the beneficiaries of our sponsorships to inform them that we shall not be able to sustain those activities going forward,” Karauri, who is also the Chairman of the Association of Gaming Operators –Kenya told a media briefing.

Those to be cut off the sponsorships include the Football Kenya Federation, the Sportspesa Premier League, Boxing Association and the Kenya Rugby Union.

Others are Sportspesa Super Eight League, Gor Mahia, AFC Leopards and Nakuru All-stars.

The Hull City sponsporship will however not be affected as it is in partnership with Sportpesa UK.

“We have other development programs such as the Arsenal training camp which is on our cost which will also be affected,” he added.

President Uhuru Kenyatta on Wednesday signed into law the Amendment Bill raising the taxes collectively, up from the 5 percent cut on lotteries, 7.5 percent on betting and 12 percent on casino gambling.

Online gaming sites started gaining traction in the country about two years ago with Kenya Revenue Authority revealing that the fast-growing industry had helped expand the exchequer’s tax base.

By February this year, 25 licensed betting companies had paid a total of Sh4.7 billion in the financial years 2014/2015 and 2015/2016. Gross revenues from the industry are estimated to be in the region of Sh3 billion with forecasts indicating that the industry may experience steady growth over the next five years.

“Betting and Gaming have become widespread in our society in an environment that is inadequately regulated. Its expansion is beginning to have negative social effects in particular on the youth and the vulnerable members of the society,” Treasury Cabinet Secretary Henry Rotich said during the Budget Speech at Parliament in March.

Supporters of the amended bill say the law would enhance job creation and raise revenue for the Exchequer.

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