Kenya’s largest sports, news, technology and sports betting brand; SportPesa, has announced its decision to shut down its operations in Kenya adding that it would only resume operations when Kenya puts in place “adequate taxation and non-hostile regulatory environment.”
The move comes after the Kenyan Government’s decision to impose a 20 percent tax on all betting stakes, a move which the betting companies in Kenya, have described as damaging on both their customers and treasury.
The statement by the company reads, “Sportpesa is disappointed with the decision by the Kenyan legislature to impose a 20% excise tax on all betting stakes. The tax is based on a fundamental misunderstanding by the Rotich led treasury of how revenue generation works in the bookmaker industry.” adding that “Until such time that adequate taxation and non-hostile regulatory environment is returned, the SportPesa brand will halt operations in Kenya.”
Sportpesa stated that when combined with the 20 percent Withholding Tax on Winnings which is currently in effect, the consumers’ economic incentive to place bets will be completely removed as the imposed taxes will deprive said consumers of their total winnings.
The company also made it known that, “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.”
The announcement by Sportpesa is coming just hours after the Kenya’s second largest firm; Betin, made it known that was declaring its staff redundant.
Gamcode Limited which operates in Kenya as ‘Betin’, told its staff on Friday the 27th of September 2019 that the firm had been left with no option but to let them go.
The memo which was dated 27th of September 2019 stated that, “This has been occasioned by the fact that we have not been operational since July 2019 a fact we are all aware of. Management has had several extensive meeting with relevant government entities regarding the company’s license renewal without much success.”
While the number of staff members who will be affected by Betin’s decision is not clear, it is however expected to affect an estimate of about 2,500 staff members including those at Betin Shops scattered in various locations across Kenya.
Sportpesa and Betin were among a number of betting companies whose licenses were revoked by the Kenyan government over a taxation dispute.
