The Football Kenya Federation (FKF) faces a funding crisis as bookmaker SportPesa has terminated all Kenyan sports sponsorships, due to the government upholding its 35% blanket tax charge on betting and lottery services.
This January, the Kenyan TNA government will move to implement its much protested 35% industry tax hike, which has been deemed as ‘unworkable’ by Kenya pro-betting stakeholders.
Last June, Sportpesa CEO Ronald Karauri warned the national High Court, that his company would be forced to suspend all sports sponsorships, should the government implement its blanket tax charge.
True to his word, Karauri and SportPesa governance would issue letter to Kenyan sports stakeholders terminating all existing contracts on 28 December.
“We refer to our letter of June 2016. Our attempts to have the imposition of 35 percent tax reversed by the government has been unsuccessful. As earlier informed, please note that all contracts between us shall stand terminated on December 31, 2017,” detailed SportPesa’s termination.
Moving forward, the bookmaker will no longer be the title sponsor of the Kenya Premier League or Super 8 club competition. Furthermore, SportPesa drops its sponsorship of football teams; Gor Mahia, AFC Leopards and the Nakuru All Stars.
SportPesa’s sponsorship blackout will undoubtedly hit football governing body FKF, which has invested the bookmaker’s sponsorship revenues in grassroots programs and recruiting international resources as the ‘Harambee Stars’ seek to qualify for their first ever World Cup in 2022.
In the termination letter, SportPesa governance stated that the bookmaker would not be leaving Kenya or diminishing its market presence.
“It can be confirmed that SportPesa has no intention of leaving the country. Kenya will remain their base of operations for the foreseeable future. The operations of the company remain unchanged for the time being”.