Surebet, a Nairobi-based betting firm founded in 2019, has been acquired by Nevada-based investment company TransAtlantic Capital for an undisclosed amount, in a deal said to be the first acquisition made by a US company of an East African gaming platform.
“SUREBET is a nice addition to our global platform of cannabis, psilocybin,” says Julies Jenge CEO of TransAtlantic Capital. “ …the 1.2 billion Africans on the continent are the fastest-growing segment of gamers.”
Here Is What You Need To Know
- In a statement, TransAtlantic said the acquisition of Surebet was inspired by the fact that in 2018 players across Africa’s largest gaming markets of Nigeria, Kenya and South Africa wagered $40bn. It noted that while this was mainly on football and horse racing, there was growing interest in US sports such as American football, basketball and baseball.
- TransAtlantic estimated that 5 million daily active mobile players in the Kenyan market spend on average $20 per day on betting.
- The acquisition is a shift in focus for TransAtlantic, which had previously focused on investments in housing, shipping and agriculture.
Read also: One Year After Shutting Down, Kenya’s Leading Betting Firm SportPesa Is Back
A Tense Regulatory Environment
- Betting entities have faced significant government opposition in Kenya.
- In 2019, Uhuru Kenyatta, the country’s president, called on lawmakers to ban gambling. His call came after the country’s Betting Control and Licensing Board ordered telecommunications companies to suspend the shortcodes and paybill numbers the sportsbooks used to exchange funds with their customers.
- The lawmakers took up the president’s call. Part of their worries stemmed from social concerns. One lawmaker noted a rise in suicides from young men who took up betting on sports through their mobile devices.
- They then followed it up by hiking gambling tax rates from 7.5 to 35 percent under a new legislation.
- As though that was not enough, Kenyan officials expelled nearly 20 foreign business leaders who were working for sportsbooks in the East African nation.
- SportPesa and Betin then joined forces to file a lawsuit against the government, but the country’s Supreme Court dismissed the legal challenge. In doing so, Justice John Mativo noted SportPesa’s license had expired, which meant the company could no longer operate legally until it reapplied for one.
- In 2019, both SportBesa and Betin stopped doing business in Kenya due to what they saw as a hostile tax environment. Although Sportpesa had relaunched in November last year, with a new licensing partner, Betin is yet to.
- Meanwhile, in the country’s 2020 Finance Bill, the excise tax on betting stakes was repealed, but the government has since promised to reintroduce the levy.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
Surebet acquired