Kenya-based betting operator SportPesa has launched operations in neighboring Tanzania just as the Kenyan government prepares to impose crippling new taxes on SportPesa’s domestic operations.
On Tuesday, SportPesa announced that it had received a license to commence gaming operations from the Gaming Board of Tanzania (GBT). James Mbawe, who was appointed interim director of the GBT in January, called SportPesa’s launch a “great success for Tanzania because it will increase our visibility.”
Tanzania has a small but growing gaming industry encompassing everything from sports betting (land-based and online) to casinos to a national lottery, which is run by South Africa’s Gidani International.
Gaming operations are said to pump around TZS 1.5t (US $671m) into the local economy each year, constituting about 2-3% of Tanzania’s gross domestic product. Sports betting is the industry’s fastest growing gaming vertical, earning the government nearly TZS 22b in tax revenue in the 2015-16 fiscal year, TZS 6b more than the government earned from the entire gaming industry just five years ago.
Harrison Kwakyembe, Tanzania’s Minister for Information, Culture and Sport, thanked SportPesa for “seeing enormous potential” in Tanzania. Kwakyembe called the company’s arrival in Tanzania “an important and unique chance to develop sports and we will not let this opportunity go.”
SportPesa sponsors a variety of sports leagues and teams in Kenya and the company used the launch announcement to unveil a new TZS 50m sponsorship of the Serengeti Boys under-17 football team ahead of a tournament in Gabon. SportPesa will announce additional local football sponsorships this Saturday.
SportPesa is currently mounting a legal challenge of Kenya’s proposal to impose a uniform 50% tax on all gambling revenue, whereas sports betting operators had previously paid just 7.5%. Tanzania, which charges its licensees 15% of gaming revenue, suddenly looks like a preferable place to do business.
In other SportPesa news, the company is moving its European headquarters to Liverpool. SportPesa is widely rumored to have inked a new shirt sponsorship deal with local English Premier League side Everton FC, although the new shirt sponsor won’t be officially revealed until next week. SportPesa has inked similar sponsorship deals with Southhampton, Hull City and Arsenal.
The Liverpool Echo reported that SportPesa is negotiating an office space deal with the team’s principal investor, billionaire Farhad Moshiri, who recently bought the Royal Liver Building on the city’s waterfront. SportPesa reportedly plans to create around 100 jobs over the next 18 months to fill its new office space, which it hopes to open in July.