SportPesa Responds as President Uhuru Maintains Betting Firms Must Pay Taxes

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BBI, SportPesa, State of the Nation 2019

President Uhuru Kenyatta has vowed no backtracking on the reforms his government is undertaking in the gambling industry.

This comes as SportPesa, a mega betting firm in the country has noted that it is fully compliant with the regulations and has paid taxes in full.

“We are committed to dialogue with all relevant stakeholders to ensure that we are arrive at a solution and resume our services”, Capt Ronald Karauri said in a statement.

President Kenyatta had noted on Saturday that the taxes betting firms are required to pay are for development and the betterment of the country’s economy.

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The Head of State said he will not revoke the government’s decision to shut down the paybills and short codes for 27 of these firms until their licences are renewed.

He further noted that court processes are being used to frustrate the taxman and other regulatory agencies.

“The firms should stop threats that they will move to court. The government must get its share to fund activities that are beneficial to this country,” he said.

GOVT ORDER

The government recently ordered all betting firms to apply afresh for operating licences, starting July, in a move to net firms that have been evading taxes despite reaping billions of shillings in profits.

Gamblers had been issued a 48-hour window to withdraw their money from betting companies or lose it. The money could run into hundreds of millions of shillings.

The Betting Control and Licensing Board has roped in commercial banks and the communication sector regulator in its ongoing crackdown.

President Kenyatta said, “Some firms have been hoarding taxes but we have managed to push them to pay and we will continue doing so. Those in the betting companies are our friends but we have to agree that the government must get its rightful share to build cultural centres and other developments.”

He spoke at Kiamugumo Primary School in Kirinyaga County during city lawyer Kamotho Waiganjo and Kirinyaga Governor Anne Mumbi’s traditional wedding..

CONSEQUENCES

Data from the government shows the annual turnover in the gambling industry rose from Sh2 billion to over Sh200 billion in the last five years alone.

A report by a multi-agency team set up by the government indicated that betting companies made about Sh201 billion in 2018 yet they paid only Sh4 billion in taxes.

Firms whose licences have not been renewed, or which have been told to fulfill certain conditions in order to be allowed to operate, include betting giant SportPesa, Betin, Betway, Betpawa, Premierebet, Lucky 2 U, 1XBet, Dafa Bet, Atari Gaming, PalmsBet, Betboss and Mozzarbet.

The government has renewed the permits of Betlion which launched operations in Kenya in 2018, as well as those for Odibets, Betpalace, Mcheza, Kwikbet, Betika and Gamemania.

The firms have denied any wrongdoing and have maintained that they have met regulatory requirements amid the push and pull with the government. SportPesa has said that it has paid all taxes as required by the law.

The shutdown affects 12 million betting accounts according to telco Safaricom, with SportPesa and Betin among the biggest losers.

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