Government should rethink betting law

What you need to know:

  • One of the saddest notices I have seen this year came from SportPesa this week.
  • The main thrust of my article is to appeal to the government to review this tax regimen. I am well aware that the government needs every coin it can get but making a law that looks like its being punitive against a major player like SportPesa is wrong in all aspects.
  • I have seen some arguments that SportPesa is trying to blackmail the government by threatening the withdrawal. I don’t think this is the case. SportPesa, just like any other business entity survives to make profit.

One of the saddest notices I have seen this year came from SportPesa this week. Here goes:

“Esteemed customer. Regarding the new taxation law, we would like to clarify on the impact it has on the business. All Kenyan companies pay corporate tax at 30 per cent Currently, we pay at least 37.5 per cent tax, higher than the normal corporate tax.

“The new betting law adds an additional 35 per cent tax. So SportPesa will be paying a minimum of 37.5 per cent plus 35 per cent equals 72.5per cent tax of gross revenue.

In addition, we are still paying all other statutory taxes like PAYE, VAT and withholding taxes.

We therefore cannot compete in the crowded market while still sponsoring sports while other companies are not doing the same.” What this means is that when fully effected, several sporting entities in Kenya, including top football clubs AFC Leopards and Gor Mahia, the national football teams, plus the national rugby teams will be severely affected.

According to available records, SportPesa has pumped in an estimated Sh1 billion to Kenya’s sports industry through their various partnerships with Football Kenya Federation, Kenya Rugby Union, Kenyan Premier League, AFC Leopards, Gor Mahia, Nakuru All Stars and the Kenya Boxing Association.

The main thrust of my article is to appeal to the government to review this tax regimen. I am well aware that the government needs every coin it can get but making a law that looks like its being punitive against a major player like SportPesa is wrong in all aspects.

I have seen some arguments that SportPesa is trying to blackmail the government by threatening the withdrawal. I don’t think this is the case. SportPesa, just like any other business entity survives to make profit.

In fact sponsoring the sports teams is something I believe Captain Ronaldd Karauri, the SportPesa CEO is doing out of his good heart and the love he has for Kenya sports. They are under no obligation whatsoever to do so.

That a firm that has done so much to improve the Kenyan sporting field can be forced to withdraw its sponsorship bodes ill for many of our young men and women who rely on sports as a way to earn a decent livelihood.

I foresee teams like Gor Mahia and AFC Leopards heading into dire straits if this law is not reviewed. Saddest part is that this unfortunate event comes barely months after another major sponsor of local football Supersport also hightailed from the Kenyan Premier League.

What this means is that we are headed back to the days when fans would walk around the stands with a begging bowl fundraising for the players.