Court declines to allow SportPesa back in operation

SportPesa CEO Ronald Karauri shoots the ball in a Gor Mahia home kit on December 23, 2016 at Galleria Shopping Mall. PHOTO | CHRIS OMOLLO |

What you need to know:

  • The judge further ruled that the court could not rewrite terms and conditions of the binding agreement.
  • Justice Mativo said, “The circumstances of this case are that the petitioner’s licence has expired. Even if the court quashes the decision there is no basis the petitioner can operate on an expired licence.”

The High Court on Friday declined to allow betting firm SportPesa back in operation or force govt to compensate it for revenue lost after licence suspension in July.

Justice John Mativo said the court was not privy to a contract entered by SportPesa and the State, which allegedly stipulated that the petitioner would be compensated should a breach of contract arise.

The judge further ruled that the court could not rewrite terms and conditions of the binding agreement.

Justice Mativo said, “The circumstances of this case are that the petitioner’s licence has expired. Even if the court quashes the decision there is no basis the petitioner can operate on an expired licence.”

Pevans East Africa Ltd, which trades as SportPesa had moved to the High Court seeking compensation for money lost since the government shutdown began.

The court also found that the SportPesa had not demonstrate that the government violated its constitutional rights and hence it was impractical for the court to award damages.

SportPesa is among 27 firms, whose betting licences had not been renewed, pending the outcome of an inquiry on suitability to operate. The gaming companies largely rely on Safaricom’s network to take bets, communicate with users and process payments through pay bills

Government through the state law office had argued that Pevans East Africa Ltd can apply for the license afresh after meeting the mandatory conditions, and that such an application will be considered in accordance with the law.

In a statement to banks last month, the Central Bank of Kenya (CBK) notified them of Betting Control and Licensing Board’s (BCLB) failure to renew the license for the July 1, 2019 to July 1, 2020.

“This is to bring to your attention that the BCLB has not renewed the operating licenses of certain bookmakers and lottery operators for the period July 1, 2019 to July 1, 2020. Please find attached, the list of entities whose licenses have not been renewed for your information,” read the statement from CBK.

With the absence of the license, the 27 betting and gaming companies are illegally operating in the country and will not be allowed to enjoy banking services, which is a critical component in the operation of their business.

In the same month of July, the State ordered telcos to shut down the paybill numbers and short codes of the 27 companies whose licences are yet to be renewed.

The order by BCLB, contained in a letter dated July 10, effectively shut down a multibillion-shilling industry that has been on a roll.