Karauri: We underestimate sport, yet it gives hope to many

An hour with SportPesa Chief Executive Officer Ronald Karauri is a time full of space and light.

It’s like reading a well written novel, where his clarity of vision is obvious.

He is not a man you go to when you are in need of a fulfilling conversation involving sports, or if you are looking for football banter – for he follows very little football.

But if you are looking for an expert in football governance, and the nuances of managing one of the most successful sports related companies of our time, Karauri will blow your mind.

I meet him inside his expansive office just off the city centre where he is alone – without an aide or personal assistant.

And just like me, he is interested in a detailed conversation rather than a routine interview.

The importance of time and space becomes even clearer when we turn to the hottest issue at hand.

That of whether his company is still thinking of terminating operations in Kenya once the newly-proposed Betting, Lotteries and Gaming Bill takes effect on January 1.

This proposal by the Parliamentary Finance Committee to impose a 35 per cent tax on all gambling revenue, up from 7.5 per cent, has caused the relationship between SportPesa and government to reflect the usual hostility between state and run-away corporates.

NOT GOING ANYWHERE

But no longer. Time, it seems, has played healer and dulled a big section of the company’s aggrieved parts that had caused them to declare publicly that they will terminate all existing financial contracts with different sports entities immediately and vacate the country.

“First, SportPesa is not going anywhere. We have gotten our feet in Italy, England and even Spain. By the time we decide close shop here, it will mean that that’s the very last option. That it no longer makes sense to have an office here, and I don’t see that happening.

“Sometimes it looks like the government wants to kill betting completely.

“But if that is how they plan to do it, then there is a lot of misinformation.

“I appeared before the Parliamentary Committee and told them ‘look, if you increase that tax, you will not kill the business, you will only take it offshore."

“As we speak, there are people who are placing bets on foreign sites like Bet365, so I advised them to come up with more effective ways of regulating betting.”

Well, the country is now consumed in politics, and reviewing the proposed betting law obviously ranks low in government’s legislative agenda currently.

And even though SportPesa has provided assurance that they are here for the long haul, it matters to Karauri that the government rethinks their decision.

“We are still hopeful that things will change between now and December 31."

“The problem is that government doesn’t seem to understand how this business works, and how best to regulate this industry and so the future is quite uncertain at this moment,” he said.

Such hopeful thinking, and a compassionate ability to understand the reasons behind government’s proposal, underpins Karauri’s demeanour.

But he also has the ability to hold grudges, as demonstrated by his bringing up a story that was published last year under the headline: “A Gambling Nation.”

This story, which was highlighted in the front page and carried within other prominent pages of the Daily Nation newspaper, sought to highlight the sharp increase of betting especially among youth in the country.

In his own words, the story was misleading and it compelled him to seek audience with Nation Media Group CEO Joe Muganda because he felt aggrieved by the ideas peddled in the story.

“There is nothing bad about betting. Many of the stories you hear are made up, without any tangible proof."

“When we say that Kenya is a gambling nation, we mean that Kenyans are irresponsible people who cannot control themselves. That is under estimating Kenyans,” he said.  

Not lost in the potentially devastating effects of uncontrolled betting, Karauri (who doubles up as chairman of the Association of Gaming Operators of Kenya) accepts that there is need to regulate the business.

“We have to regulate. I have never been against regulation, because there are people who thrive on absence of rules. The issue is that increasing tax is not an efficient method of regulation.

“If you look around, there are gambling machines and sites cropping up even inside residential areas every day. Do they pay tax? They don’t. “So if you place the tax burden on SportPesa, who are supporting various sports bodies locally, and then they run out of business after three years and close shop, leaving the other unscrupulous individuals operating without licenses and without paying taxes, have you succeeded in regulating the industry?”

At this point in the interview it becomes clear that Karauri’s idea of regulation differs greatly with those of government’s, mainly because his ideas do not involve increasing betting tax.

“You can raise the fees of acquiring an operating license, thus limiting new entrants in the market. You can make it compulsory for betting companies to support the economy directly.

“Tell them that they must give back a certain amount in the way of sports sponsorship for example, for them to be legible to continue doing business.

“You can insist that they do not use the money acquired from Kenya to strengthen other foreign economies. The options are many,” he said.

JOIN POLITICS

So flummoxed has Karauri been with this issue, that he has for the first time in his life thought about following in the footsteps of his father, former assistant minister Mathew Adams Karauri, and joining politics.

“I have never liked politics, but I am finding out that in this life you can never avoid politics. When you find yourself confronted with such a situation, you start to think, ‘maybe I should be part of the change’.

“I have interacted with law makers. They hear you but sometimes they lock out certain bits of the explanations, which makes you wonder whether they are deliberately refusing to understand."

If Karauri is driven by a communal vision of sport playing a role in transforming society, the roots of his commitment are deeply personal.

And even if it takes years, the 37-year-old still believes that Kenya can make it to the World Cup.

“There are many barriers to that vision, especially because we tend to identify talent very late, many times when a player is already in his late teens. In other countries, footballers are identified as young as seven years old so that is a challenge.

“I look at our rugby (sevens) team. These are players who compete against well established teams like New Zealand who have the latest science and technology at their disposal, and sometimes they beat them.

“When Gor Mahia played Everton in Tanzania early this year, I kept wondering how our local club would measure up against an English Premier League club. Yet, somehow, Gor provided such a good push back that everyone appreciated. That tells you that nothing is impossible.

“The onus is now with the guys at Football Kenya Federation to find ways of fixing the gaps, because I believe that it can be done,” he said. But what happened to SportPesa’s plan to renovate Nairobi City Stadium?

“The plan was to rebuild that stadium and upgrade it to modern specifications.

“But when we went to the county, the red tape was too much. It became very difficult to agree on who will do what, because it is their property. We stayed stuck on the initial steps and we have since abandoned that idea.

FAVOURABLE CONDITIONS

“We have decide to get our own land and build our own stadium from the ground up.

“Which is why it is important for government to provide favourable conditions and dispel the current uncertainty.

“You see nobody wants to buy land then three years down the line it proves impossible to remain here,” he said.

After the interview we keep chatting and we jump into the sticky issue of why the company continues to refuse to support the Cecafa tournaments, especially now that they have come up with the SportPesa Super Cup, which can be viewed as a rendition of the Cecafa Club Championship.

“Why should it always be SportPesa?" He asks with a light chuckle.

“The Super Cup has nothing to do with Cecafa. It is unfortunate that thy feel that way. And by the way, if Cecafa tournaments can’t get sponsorships, how is that SportPesa’s fault?”

I’m about to ask him what he thinks of women football and why his company never supports the Women’s Premier League when we’re interrupted by Jakob Kristenssen, SportPesa’s Chief Operations Officer.

He has come to let him know that the meeting with the company’s associates is still on at midday.