Kenya’s leading sports betting operator SportPesa appears to be rethinking its decision to rescind local sports sponsorships to protest the government’s gambling tax hikes.
SportPesa scrapped all its sponsorships of Kenyan sporting bodies and teams in January, making good on its threat to respond to the government hiking gambling revenue taxes from 7.5% to 35%. SportPesa had sponsored the Kenyan Premier League (KPL), as well as KPL teams Gor Mahia FC and AFC Leopards, among numerous other pacts.
But local media quoted sources saying SportPesa has offered to renew its KPL sponsorship before the end of the current season, which got under way in February. However, SportPesa is reportedly offering to pay Sh80m (US$792k) per season, down from the Sh93m per season the company had paid under the original deal.
SportPesa is reportedly also interested in renewing its individual team deals with Gor Mahia and Leopards. The two clubs had earned a combined Sh100m annually from their SportPesa deals, but it remains to be seen what new offers may be forthcoming.
The urgency of the situation can’t be understated. Several KPL clubs have reportedly been unable to pay their players since the season started. Last month, captains of 18 KPL clubs gave the league an ultimatum: find a new title sponsor or we’ll start boycotting league matches.
SportPesa always maintained that killing its sports sponsorships wasn’t a ploy to pressure the government into rethinking the tax, merely a way of tightening its belt so that the operator wouldn’t have to pass on the costs of the tax to its betting customers.
SportPesa appears confident that it will not come off looking like the bad guy in this situation. It doesn’t hurt that the company was just awarded the nation’s top taxpayer’s honor from the Kenyan Revenue Agency for its contributions to the local economy.
This was the third straight year that SportPesa has won the KRA’s Medium TaxPayers category, an impressive feat, considering that the company is only four years old. CEO Ronald Karauri used the occasion to affirm the company’s interest in discussing a “fair tax policy” with the government.
SportPesa’s popularity doesn’t seem to have taken a hit from the sports brouhaha. Official Google search records for Kenya show SportPesa topping the ‘how to’ category with the phrase “how to register sportpesa,” beating out “how to delete a facebook account.” For the record, #9 on that list was “how to stop masturbation.”