Kenya’s sports betting operators found their sports sponsorship deals under attack less than one week after the government dramatically raised betting taxes.
Last week, Kenya’s government presented its budget for fiscal 2016-17, which included a new uniform 50% tax on all gambling revenue. Shocked sports betting operators, who had previously paid only 7.5% tax on their betting revenue, responded by saying the new tax could force them to cancel their sponsorships of local sports teams in order to keep costs down.
On Sunday, Kenyan Sports Cabinet Secretary Hassan Wario (pictured) lashed out at betting operators, saying they were “making billions of shillings and throwing little money around and telling us not to tax you is wrong. We are going to tax you as long as you are in Kenya.”
According to the Daily Nation, Wario went on to dare operators to cancel their sponsorships, adding that local sports franchises and leagues should “come to us as a Ministry so that we know these people have paid this much we are going to support you including giving you a waiver.”
Yvonne Namai, sponsorship manager of Kenyan betting operator SportPesa, criticized Wario’s “reckless and irresponsible statement,” saying SportPesa was a private company and “asking us to channel our sponsorships through his ministry so that they can give us taxation waiver is pushing things a little bit far.”
SportPesa has made waves in recent years signing high-profile sponsorship deals with UK football clubs, including Southhampton, Hull City and Arsenal. But SportPesa is also the title sponsor of the Kenyan Premier League, and has deals with KPL clubs Gor Mahia and AFC Leopards, as well as the Kenyan Rugby Union.
Just last week, SportPesa paid a Sh1.15m (US $11,160) bonus to members of Kenya’s SportPesa AllStars following last month’s friendly match against Hull City’s development team. The two sides are due to square off again in Nairobi in the near future.
SportPesa isn’t the only betting operator lending its name to Kenyan sport. Last week, sports betting firm Betika was unveiled as the new shirt sponsor of former KPL champions Sofapaka FC. Club president Elly Kelekwa claimed the one-year, Sh50m deal would ensure that the team would be “in good financial health and our players and technical bench can fully focus on achieving results on the pitch.”
Kalekwa addressed the plan to boost the betting revenue tax, saying the government should “consider a more appropriate way to handle the matter,” noting that betting firms “have done a lot to give funding to sports which gives most of our youths a source of employment.”