Three gaming companies on Monday urged the High Court to compel the government to lift the suspension of their pay bill numbers.
Arguing before Justice John Mativo, the companies including SportPesa, Betin and 1xBet said the suspension of their paybill numbers and short codes halted their businesses, despite meeting all the requirements.
Through Senior Counsel Paul Muite, SportPesa, trading as Pevan East Africa, said Betting Control and Licensing Board (BCLB), ordered Safaricom and Airtel to suspend their paybills and short codes despite obtaining a court order. He said the board acted arbitrarily, causing injustice to the company and threatening hundreds of jobs.
“Any action done in violation of a court order is a nullity. The letter (to Safaricom and Airtel) is a complete nullity because it was made in defiance of a court order,” he said.
Prof Githu Muigai for Gamcode ltd, also known as Betin, said BCLB cannot be allowed to act “in a manner that it deems fit and in contravention of the law”.
“The board if under duty to observe the law,” he said.
On its part, Advanced Gaming through Mbugua Ng’ang’a said it has invested heavily and if not lifted, the suspension of the paybill numbers will lead to closure of its business.
In reply, however, the board said by ordering a status quo, the court effectively took over its mandate and “renewed the licences of the three companies.”
Safaricom, which has been named in the case as an interested party, said it acted to safeguard the interest of the public and it should not be forced to break the law by allowing unlicensed operators to continue without a valid licences.
The firm said BCLB wrote informing them that licences for various companies had expired and were not renewed until they met certain requirements
Meanwhile, SportPesa wants President Kenyatta to form a committee to investigate and study best practices within the industry that can guide regulation and taxation.
In a presentation to Senate committee on Justice, Legal Affairs and Human Rights, the firm also wants BCLB to process and issue its licence for 2019/20 “as we continue to engage in legal tax dispute resolution measures with KRA.
the Kenya Revenue Authority.”
The firm, which is among those at loggerheads with the government over taxes said BCLB and KRA should follow the legal avenues for settlement of tax disputes as per the law.
The company said the Board later shut down its paybill numbers, a move it argued was meant to cause panic among members of the public and punters and lead to a run out SportPesa out of business.
“By issuing the directive complained of, the Board deliberately moved against the applicant’s core business with a view of shutting it down and giving an unfair advantage to its competitors,” part of the application reads.
The company convinced the court in June 28, to stop the Board from interfering with its operations, pending the determination of the case.
Mr Maurice Ogosso for BCLB maintained that the company’s license expired and the court’s decision, effectively renewed it. Once it has expired, Mr Ogosso said, the bookmaker has to make fresh application for renewal in accordance with the law.
He said by allowing the gaming companies to operate after June 30 does not promote the rule of law since the order was issued without consideration all the applicable principles and the law.
Safaricom, which has been named in the cases as interested parties said it acted to safeguard the interest of the public and it should not be forced to break the law by allowing unlicensed operators to continue with its business without a valid license.
The telecommunication company said the Board wrote to the informing them that licenses for various companies had expired and were not renewed until they concerned companies met certain outstanding requirements ad well as the outcome of an ongoing due diligence to determine whether they are fit and proper to hold the license.
Safaricom further said that betting and gambling activities may be used by fraudulent persons and criminals to defraud members of the public as well as certain criminal activities such as money laundering, financing of terrorism and other related organised criminal activities, under declaration of gaming income and non-payment of taxes.
“It is on this basis that one of the conditions set by the 2nd respondent for the issuance or renewal of a license under Cap 131 is for the relevant national security officers and or organs to carry out background security checks on all applicants engaged in such activities as to protect members of the public,” reads a response by Safaricom.
Orders maintaining status quo remain in force. Judgement will be made on September 19, 2019.