What became of the planned Sports Fund?

Two Kenyan football clubs, top-flight league organisers and the local football federation can again breathe easy thanks to SportPesa’s reinstatement of their partnerships.

Gor Mahia, AFC Leopards, Kenyan Premier League and Football Kenya Federation have all signed new sponsorship deals with betting firm SportPesa. The deals were collectively terminated on January 3 following government’s decision to effect a 35 per cent taxation on all betting, lotteries and gaming companies on gross earnings up from 15 per cent. 

Monday’s announcement came as a welcome relief to the clubs and entities involved, but it also leaves a number of questions unanswered.

What happened to the Sports Lottery Fund put in place in 2013 and which the Government promised to be fully operational by this time? Will there be a final solution to the row between Government and betting companies regarding taxation even after Treasury submitted a Bill in Parliament seeking to reduce gaming tax from 35 per cent to 15 percent? At an awards gala held two weeks after SportPesa withdrew from all sports sponsorship, Deputy President William Ruto stood his ground on the matter, saying: “Government will allocate Sh500 million to fund sporting activities after betting firm SportPesa pulled out of sports sponsorship. For us there is no turning back. Payment of taxes is not optional but a must and not negotiable. I want to encourage all the other sponsors to continue paying tax and continue supporting sports activities.”

By celebrating the return of football sponsorship, and setting aside the idea of a fully functional Sports Lottery, we are simply postponing the crisis. On Monday, Sports Principal Secretary Kirimi Kaberia said the Government and betting companies would find an amicable solution, but it appears that betting companies are both a threat and saviour to local sporting entities.

When the Sports Act came into force in 2013, it was to provide a solution to the deep financial problems that athletes, clubs and federations endure from time to time through Sports Lottery Fund.

The Sports Lottery Fund was established under the Sports Act 2013, and was meant to be a collective pool of financial resources from where all Kenyan athletes, teams and federations could secure funding to comfortably prepare and participate in various competitions.

Kenya was to follow the 21-year UK model, which was ranked the most successful in this matter, with money from the National Lottery (established under the sports fund) being distributed to independent organisations or registered federations.

A 14-member Board of Trustees comprising of representatives from the sports ministry, the government, the Director General of Sports Kenya, the Chief Executive Officer of the Kenya Academy of Sports, as well as the Attorney General, would then proceed to track the performance of the athletes under their stable to evaluate the success or lack thereof of the project, and to identify areas for improvements for the future.

Government would provide the seed money with Treasury providing the bulk of funding in the first year of implementation, after which the lottery would grow into a self-sustainable entity with monies from various sports investors (including gaming and betting companies). We can learn from this.

“We need a national approach to sports and the lottery is the way to go. If we consolidate the fund, it will be easier to do things that individual federations cannot do such as improving infrastructure and improving the levels of coaching and refereeing,” Kaberia said at the time.

But even if we focus narrowly on the fact that help is here and players will suffer less, there remains the question of how the Government will handle betting companies.

There is talk of a proposal being tabled in Parliament proposing a tax reduction from the current 35% to 15%. And if that passes, how then will the Government achieve its need to regulate gambling activities especially among youth in this country?