Licensing

Sportpesa resumes operations in Kenya

3 minutes read
Kenyan betting brand Sportpesa is set to return to business in its home country under a licence held by a new operator, Milestone Games.
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Sportpesa chief executive Ronald Karauri said he was excited to announce the return after Milestone – about which little is yet known – gained the rights to use the brand in Kenya.

According to the operator’s Kenyan terms and conditions, Milestone is based in the same offices as its previous licensing partner.

“SportPesa is back,” he said. “I’m happy to announce that the SportPesa brand is back under a new [Betting Control and Licensing Board] BCLB license holder.  

“As market leaders, SportPesa will focus on upholding the highest standards of service and responsible gaming. We look forward to working closely with BCLB and all other stakeholders. 

We are excited to explore a wide range of partnerships in Kenya over the coming weeks and months, which will prioritize the development of sports in communities across our great country.”

The operator’s brand disappeared from its native market for more than a year after opting to halt operations in the country in the wake of lawmakers raising an excise tax on betting stakes from 10% to 20%. Rival Betin withdrew from Kenya at the same time.

This tax was ultimately repealed entirely in a budget bill signed into law in June, though, on the basis that it had significantly reduced tax revenue from the sector because it pushed players to offshore sites.

However, the country’s government said it planned on bringing the tax back “within the next six months” shortly after.

The controversial tax increase that led to Sportpesa leaving the market came after a different dispute over a winnings tax. That resulted in Kenyan authorities ordering telecoms companies to block payments to Sportpesa and the operator to suspend its sport sponsorships and prepare to take legal action.

Authorities argued the tax applied to stakes as well as winnings, which left Sportpesa with a KES60.56bn (£483.7m/$586.4m/€528.1m) tax bill, but in November, a court ruled in Sportpesa’s favour. It said the tax applied only to the amount won and determining the tax should be collected from players rather than operators.

Sportpesa said it is continuing to hold discussions with authorities in order to ensure a tax system that pleases all parties can be maintained.

“SportPesa is pleased to have a close working relationship with both the BCLB and the Kenyan Revenue Authority and we continue to hold discussions with all stakeholders about how to create a fair and effective taxation system that encourages responsible behavior from consumers and operators alike,” it said.

The operator – which previously sponsored many of Kenya’s largest sports clubs including Nairobi rivals Gor Mahia and AFC Leopards – said its “immediate priority” is to focus on partnerships and community initiatives with local communities and sports teams. Gor Mahia and AFC Leopards have since both signed sponsorship deals with Betsson’s Betsafe.

Prior to its withdrawal from the Kenyan market, the operator also used to sponsor Premier League club Everton and Formula One team Racing Point.

Both deals came to an end in February, with Racing Point chief executive Otmar Szafnauer pointing to “difficulties in their home market”, though the operator said the deal was simply a 12-month agreement that had run its course.

The operator, which employed 453 staff before it withdrew from the country and made these staff redundant, said its return would be a “welcome boost to jobs and the Kenyan economy as it recovers from Covid-19”.