In Summary
  • Nine out of the 20 English Premiership clubs are sponsored by betting firms despite high taxation in England.
  • While there appears to be harmony in the European markets in Kenya uncertainty in sports industry rages after aggrieved SportPesa withdraws sponsorship and tells government to pick the tab with players, clubs and federations the worse off.

An African cartoonist neatly summed up the irony surrounding SportPesa’s withdrawal from the Kenyan sporting scene with a sketch of a skinny woman clinging onto a huge rotund man and beside them, a suit-wearing man holding out an empty bowl.

The thin lady represents the emaciated Kenyan sporting scene that has reduced sports administrators to beggars of sponsorship.

The fat man has SportPesa written across his belly, indicating that he represents corporate sponsors with their enchanting money and frivolous spending.

The man in the suit is the state, which has vowed to tax the duo’s blossoming relationship to its untimely demise.

Such is the discourse that has pervaded local sporting circles since SportPesa, the Kenya-based online betting giant, made good its threat to withdraw its support for local sports entities after the government enacted a new tax of 35 per cent on betting firms.

As expected, their withdrawal elicited hue and cry among sports administrators who had previously enjoyed healthy sponsorship. Gor Mahia and AFC Leopards have threatened to withdraw from continental competitions due to the anticipated cash crunch after losing their multi-million shirt SportPesa shirt sponsorship.

What was unexpected, however, was the sharp criticism that the company has attracted since they made public their decision.

Public opinion appears unanimous in the feeling that SportPesa is using blackmail to force the government to reduce the new tax that took effect on January 1.

It is a situation that will obviously impact hard on Kenyan sports considering that SportPesa has for the last of couple years been the major benefactor of the big sporting disciplines in the country.

A lot has happened in the last few days, including SportPesa’s notice to appeal the High Court decision that approved the implementation off the increased betting tax. Now, Nation Sport has reliable learned that the company has opened fresh negotiation with the Kenyan Premier League club Gor Mahia with the view of working out a new shirt sponsorship deal.

“I asked the President to engage with me so as to come up with a solution to this. I would also like to meet the cabinet secretaries for sports and finance and see how we will come up with solutions to the negative impact brought about by the new finance law,” said SportPesa CEO Ronald Karauri.

“I further request the government to help Football Kenya Federation pay the Technical Director’s salary and that of national team coach Paul Put. Besides, I ask the government to assist the league to kick off without delay and help Gor and AFC Leopards honour their continental matches. We (SportPesa) would be glad to be back should the government re-think the financial law.”

It remains to be seen whether government will heed SportPesa’s call, or whether the company will restore their agreements with Kenya Rugby Union, Kenyan Premier League and other sports entities that were affected by their withdrawal, but like anything involving gambling, appearances can be deceiving.

“There is a reason why the betting tax was increased. It was not just a decision by the Government. It is something that was discussed at length in Parliament so I don’t think we should be looking at changing the new law. We shall however engage the stakeholders to see how best to navigate this matter,” said Sports Principal Secretary Kirimi Kaberia.

So what is the truth about betting? And betting tax? And is it right to effect punitive sin taxes on revenue generated from betting? And why is government so rigid about the increased tax regime? And why are SportPesa crying foul while they are subjected to even higher tax percentages in the United Kingdom?

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