Betin and SportPesa may be close to returning in Kenya after the Kenyan Tax Appeals Tribunal ruled against a government attempt to introduce taxes on players’ winnings rather than their stakes.
Is SportPesa Going to Return in Kenya After Favorable Ruling?
The long-embattled SportPesa sportsbook may finally see a light in the end of the tunnel – that’s not an oncoming train – after the Kenyan Tax Appeals Tribunal ruled in its favor and that of other betting operators.
Based on this ruling, the operators have been giving a fighting chance to challenge the controversial gambling tax, which would change taxation to feature players’ winnings rather than their stakes. After pulling out sponsorship deals and finally the plug on Kenya, SportPesa may now make a U-turn back into the market, after it had to lay off its entire staff.
Betin, another flagship, also quit at the same time SportPesa did to protest what both operators considered unfair taxation rules. The Tribunal, however has agreed with the operators’ position whereby tax authorities in Kenya would have to target player revenue and not cut it out from operators, creating – in the opinion of the sportsbooks – unfair betting conditions.
Commenting on the latest ruling, SportPesa chief Ronald Karauri welcomed the ruling, describing it as a major development, and suggesting that the embattled operator may once again return to Kenya – a market that has definitely been of some significance to SportPesa, despite the management’s gung-ho opposition to the tax.
Karauri said that the company would now look into what can be done for the operator to return to the market if and when possible:
We have long advocated for a fair and level playing field and a regulatory and taxation environment that both supports business and inward investment, and is in the interests of Kenyan consumers.
“SportPesa will now reconsider the future of its operations in Kenya. We encourage the authorities to take the Tax Appeals Tribunal’s ruling fully on board and to now apply a reasonable approach to gambling regulation and taxation, in line with international best practice,” he added.
To jog your memory, SportPesa was among the 27 operators who refused to comply with a new ruling introduced on July 1 2019 which would have seen all operator pay a new levy based on players’ stakes.
Where’s the Problem for Business?
Emboldened by a potentially great development, SportPesa and Betin would have a chance to once again start accepting bets in Kenya. But why wouldn’t they if the tax ruling – which might still be a subject to debate – was upheld?
Put plainly, bettors would need to pay a whole lot more as well as have to be taxed on their stakes – whether they win or lose. This would in turn create a difficult business environment where sports fans have very little incentive to place wagers.
SportPesa originally tried to pressure the government into changing its abrupt position. Some lawmakers even supported the operator, backing the thesis that if SportPesa had pulled out, it would have spelled serious consequences for the betting industry – and bitten into GDP.
Without a definitive proof that the company is returning – nor a formal go-ahead from the government – the operator is bidding its time. Some have described the latest ruling as a victory for both SportPesa and Betin, but it’s ultimately the government that needs to approve – or rather give up on the idea – to pursue the suggested tax.
The Kenya Revenue Authority (KRA) said that it would appeal – the plot thickens for sportsbooks and lawmakers both.