- SportPesa continues to challenge 20% gambling tax in Kenya
- President Uhuru Kenyatta calls for a blanket ban on all gambling
- Deadlock continues as everyone prepares for the worst
Kenya’s President Uhuru Kenyatta has urged lawmakers to introduce a constitutional amendment and suspend all gambling until all back taxes are paid.
Kenyan President Threatens Sportsbooks with Blanket Ban
The political rift over charging sports betting companies in Kenya millions of back-taxes continues. Uhuru Kenyatta, the country’s President, has upped the ante after he called for a complete gambling lock-down, suspending all operations in the country.
Mr. Kenyatta seems to be ready to use this ultimatum as leverage. Until sportsbooks agree to pay what the government considers they owe, authorities wouldn’t grant such companies permission to operate. The President addressed the issue while attending the 60th anniversary of the Christ is the Answer Ministries (CITAM) Church in Karen, Nairobi.
According to the President, a constitutional amendment was urgently needed so that sportsbooks would cave. Mr. Kenyatta appealed to lawmakers to act quickly and help the country solve this issue. Yet, his suggestion seemed like a way to score political points rather than addressing a problem and trying to resolve it.
Kenya and the Sportsbook: Unsettled Taxes or Constitutional Rights
Kenyan authorities have been trying to enact a 20% tax on gambling winnings, which, according to the regulator, should be imposed on both the payout as well as the original stake. This effectively squeezes operators to the point that they would most likely start running at a loss. Regardless, the Betting Control and Licensing Board (BCLB), the state’s regulator, said that it expected $586.4 million in taxes.
Mr. Kenyatta struck a chord with voters by saying that so long that foreign sportsbooks wanted to operate in the country, they would have to pay due taxes. Yet, Mr. Kenyatta overlooks the fact that casinos and sportsbooks remain a big tax payer for the entire region.
Antagonizing and suspending their activities would certainly hit the likes of SportPesa, but it would equally squeeze the public purse. SportPesa was rather robust in its language describing the latest move by government authorities, arguing that:
“[The decision is] the result of a deliberate politicization of tax figures, supporting the Kenyan government’s own political agenda.”
Amid the conflict, SportPesa withdrew support from the Kenyan Premier League, using some of its own financial clout as a leverage in seeking a favorable conclusion of the saga. Mr. Kenyatta described the situation as sportsbooks having a complete choke hold over the country with the funds “ending up in the pockets of five people.”
SportPesa has found support in local politicians, however, with some members of the National Assembly and Senate arguing in favor of the operator, and calling the taxes illegal.