Sportpesa CEO Ronald Karauri. /CFM-FILE.
NAIROBI, Kenya, Sep 28-Two giant betting firms in Kenya, Sportspesa and Betin have finally bowed to pressure and halted their operations after months of back and forth with the government.
Sportpesa which had earlier on indicated that it was getting back to business, said it is quitting the Kenyan market due to the imposition of 20 percent excise tax on all betting stakes which it said will affect its customers.
Sportpesa also argues that effecting the 20 percent withholding tax on winnings, the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings.
“This will have severe consequences for licensed betting companies. Which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya,” reads part of the statement.
“As such, Sportpesa has decided it is most prudent to shutdown our Kenya operations along with our beloved site and stop access to services,” an internal memo to staff from the firm’s CEO Ronald Karauri said.
Betin, which is the second-largest betting firm on Friday announced that it had declared all its staff redundant.
In an internal memo from the Managing Director to the employees, the firm, that operates as Gamcode Limited told staff that it had no option but to let them go.
“We hereby notify you that positions will be rendered redundant on 31 October 2019. This notice is given in accordance with section 40 of the Employment Act 2007 and as such the provided for will apply to all staff affected,” the firm said.
The memo explained that there was no success after a series of engagements with relevant government agencies regarding the renewal of the firm’s license.
This, according to the management, made it difficult for it to maintain the entire workforce.
“In view of the above, we have had financial constraints as you might expect. As a result of the deterioration of the profitability, the management has had to rethink its operational model and to proceed with the exercise of termination on account of redundancy,” stated the memo.
“Until such a time that adequate taxation and non-hostile regulatory environment is returned, the Sportpesa bran will halt operations in Kenya,” stated Sportpesa.
Following the closure of these sites, thousands of people who depend directly and indirectly from the industry will be out of jobs in coming days as the government crackdown on the industry draws its first casualties.
The two firms were among 27 betting firms which were barred from conducting business in Kenya after their licenses were revoked following taxation row.
About The Author
