SportPesa, the Liverpool-headquartered sports betting operator that have significant presence in Africa is rumoured to be considering a return to Kenya, after being out of action in the country for more than a year.
The company behind the SportPesa betting brand that has shareholders mainly from Kenya, Bulgaria and the USA, was forced to abandon operations in Kenya due to the introduction of stringent tax legislation, having to lay off more than 450 local employees in the process.
SportPesa was infuriated by the government’s attempt to tax gross receipts by 20%, instead of the winnings of betting operators, and appealed to the Tax Appeals Tribunal in Nairobi, together with fellow industry company Betin.
The tribunal sided with the two betting companies, ruling that tax should be applied to net winnings, even provided protection for sports books from future prosecution by shifting the remittance of the tax to bettors, instead of having it deducted at the source. The tribunal decision was related to the aggressive actions Kenyan authorities were showing against the industry until that moment.
Regulator Stepped In
Having won the legal battle meant nothing for SportPesa, though, as the Betting Control and Licensing Board /BCLB/, the regulatory body in Kenya, suspended its license July 1, 2018, claiming the operator owed hundreds of millions of unpaid taxes. The company’s payment processing channels were also suspended.
Further on, SportPesa lost its Nairobi High Court appeal against the decision of BCLB not to renew its license. The judge ruled that the regulator acted within its remit as a governing body, by simply not renewing SportPesa’s licence, regardless of its ongoing tax dispute with the Kenyan government. Having won the legal battle but lost the war, SportPesa was forced to shut down operations in Kenya, including restricting access to its website for Kenyan-based customers.
Website Now Accessible
Recently, SportPesa’s website has become accessible for Kenyan people again, stirring rumours that the betting operator is strongly considering a return to the market, where it was the largest sports book before. Though the company does not accept deposits yet, the website access was enough to put the rumour mill in motion, especially considering the words from Ronald Karauri, the company’s CEO, who in February neither confirmed nor rejected whether SportPesa was coming back to Kenya.
“We submitted our application to BCLB some months ago and we are still waiting for feedback. If we do get our license renewed we shall let everyone know.”Ronald Karauri, CEO, SportPesa
This response is seriously toned down from SportPesa’s late 2019 statement that the company would return to Kenya when the country provided “adequate taxation and non-hostile regulatory environment”, and suggests the betting operator is considering a possible return with, or without changes to the taxation law.