It appears, Kenyans are saying, that SportPesa, the Kenyan sport betting company, was frustrated out of market with a hike in gambling tax rates from 7.5 to 35 percent in order to make way for other external replacements. The Football Kenya Federation (FKF) President Nick Mwendwa has just announced that Betking, a Nigerian betting firm, had struck a deal with the federation.

Here Is What You Need To Know

• By the terms of the new deal, the Nigerian company agreed to offer KSh 1.2 billion ($11 million) sponsorship to Kenya premier league clubs for a period of five years. The announcement by the Kenya Football Kenya Federation (FKF) President Nick Mwendwa that Betking, a Nigerian betting firm, had signed a KSh 1.2 billion sponsorship deal for the local league raised eyebrows and instantly sparked rage on social media.
• Tuko Media reported that disgruntled Kenyans trooped to social media pages to express anger and bitterness following entry of a foreign betting firm months after a homegrown company was banned. 
• Both Sportpesa and Betin stopped doing business in the country due to what they saw as a hostile tax environment.
• The government in Nairobi hiked gambling tax rates from 7.5 to 35 percent.

• Although a Kenyan High Court initially blocked collection of the tax, the Kenyan Revenue Authority and Betting Control and Licensing Board agreed on 1 July, 2019 to withdraw the licences of 27 companies who failed to pay the levy, including SportPesa and Betin.
• After, the Kenyan government ordered telecoms company Safaricom to block banking services to the 27 companies, leaving customers unable to deposit funds — a move SportPesa said violated a court order — SportPesa ended its sport sponsorships in Kenya and placed its 453 employees in the company on leave.
• A SportPesa spokesperson told iGamingBusiness.com in early September, 2019 that the company believed it was heading towards the resumption of normal operations after constructive talks. However, on 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake proposed by the treasury in June.
• In response, SportPesa said that it would not operate in the country until the rate was changed, and laid off its Kenya-based employees.

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.