Unworkable 35% gambling tax sees Sportpesa suspend all Kenyan sports sponsorships

Kenyan sports betting operator Sportpesa has announced that it will end all forms of sponsorship with national sports clubs and bodies, as the operator deems Kenya’s 35% betting/gambling tax to be unworkable.

This weekend Sportpesa CEO Ronald Karauri detailed to Kenya news sources, that his firm would suspend all sponsorships with sports stakeholders from January. Speaking to local press, Karauri stated

“The expected financial projection will force the closure of firms and that there’s no company in the country which has the capacity of complying with the tax. The tax bracket tax is not fair as some operators can barely sustain their businesses,”

Karauri has been a vocal critic of the Kenyan government’s position on betting and taxation, stating that initial plans to impose a blanket 50% tax on all gambling verticals, would kill the industry and an effective tax revenue stream for Kenya.

This June, led by President Uhuru Kenyatta, Kenya’s National Alliance (TNA) government lowered its initial tax charge to 35% for all gambling services. However, TNA critics accused the party of budget mismanagement, proceeding with its controversial reform in order to ‘rush through’ its mandate ahead of the National Election this August.

Both betting and sports stakeholders had warned the TNA of implementing a higher tax charge without industry consultation. Furthermore, a number of betting operators had stated that they were victims of double taxation, which the government had no plans to tackle.

Sportpesa is the sponsor of Kenya Premier League football clubs, the  AFC Leopards and Gor Mahia. Betting sponsorship have played a crucial part in financing grassroots initiatives for Kenyan soccer and all-round sports, which Karauri had alerted to TNA ministers.

“The Gaming Operators in Kenya are likely to stop funding and carrying out Corporate Social Responsibility projects and this will put a lot of youths out of jobs” said Karauri

Further sporting clubs benefitting from Sportpesa sponsorship were the Kenya Boxing League and rugby teams.