In Summary
  • The ramifications of the announcement will no doubt be far reaching, starting with Gor Mahia and AFC Leopards who are planning to pull out of continental competitions due to the looming cash crunch.

  • Opinion even within local sports stakeholders is divided because due to the fear of the unknown, the concern that another devastatingly tough period for local sports is upon them is real.

  • Regardless of which side of the divide one is, it is impossible not to see the cold, harsh reality that without SportPesa, local sports development is limited.

It is difficult to have a discussion about sponsorship, or indeed about taxation and tax laws of any developing nation, without grounding the conversation on money.

Tuesday was no doubt a sad day for local sports, and after SportPesa chief executive officer Ronald Karauri stepped forward to deliver the news that his company had decided to cancel all local sponsorships, the despair across local sporting circles was palpable.

Karauri repeated sorrowfully, for the millionth time, that the 35 per cent law was too heavy on his company, and that there was no way they could continue normal activities with the new tax regime that took effect January 1.

What he didn’t mention, however, is that the Bulgarian-owned company has issued a notice to appeal against High Court’s judgment last week that upheld the new tax laws that require betting, lotteries and gaming to pay 35 per cent tax.

PUNITIVE

The ramifications of the announcement will no doubt be far reaching, starting with Gor Mahia and AFC Leopards who are planning to pull out of continental competitions due to the looming cash crunch.

Asked about their sway on government’s enforcement of the punitive 35 per cent tax law on gaming companies or their take on the Sports Fund established under the Sports Act 2013, the consensus among Kenyans is split down the middle.

Split because government isn’t perfect. And neither is SportPesa.

And because the Sports Fund, which has been fronted as a solution to all local sports’ financial problems, is still a wildly alien notion not just in Kenya, but on the African continent.

Opinion even within local sports stakeholders is divided because due to the fear of the unknown, the concern that another devastatingly tough period for local sports is upon them is real.

LIMITED DEVELOPMENT

Regardless of which side of the divide one is, it is impossible not to see the cold, harsh reality that without SportPesa, local sports development is limited. For SportPesa, the cause to revolutionize the local sporting scene was an option, not an obligation. Yet they went about their activities with ease and panache, taking over sponsorships of major sporting entities such as Football Kenya Federation, Kenya Premier League, Kenya Rugby Union, Gor Mahia, AFC Leopards, Nakuru All Stars and may others.

All this was about security. And it was done so superbly that it made government forget their responsibilities in supporting national sports teams.

Unemployment rates

Apart from the huge mileage it brought them in terms of brad visibility, locking all other similar companies from major clubs and federations kept SportPesa ahead of their competitors and made them look good in the eyes of Kenyans.

In a country where unemployment rates are ridiculously high and salaries are barely enough to cover basic needs, trading was easy. Betting provided the youth with a form of economic pass time, however fickle, and SportPesa benefitted immensely from the growing betting craze that has now hit fever pitch.

LAVISHLY

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