On Wednesday, Bloomberg reported that SportPesa was planning to list its shares on the Nairobi Securities Exchange sometime in the first quarter of 2019. The report claimed SportPesa, which also holds gambling licenses in the UK and Italy, had appointed Kestrel Capital East Africa Ltd to advise on the IPO process.
On Thursday, SportPesa CEO Ronald Karauri attempted to poke holes in the Bloomberg report, responding with a simple “no” to a Reuters journalist who queried him as to the substance of the IPO report.
However, Reuters claimed that there had been some discussions between SportPesa and Kestrel Capital regarding a possible transaction of some kind. Kestrel Capital’s managing director Andre DeSimon declined to comment on either report.
SportPesa later issued a formal statement saying that it was “constantly exploring opportunities that will create value for our stakeholders” and that the company would provide further updates “when appropriate.”
Accurate or not, the IPO rumors come less than one month after SportPesa secured some badly needed assurance regarding the viability of its mainstay Kenyan operations. In January, the government hiked betting taxes from 7.5% to 35% of revenue, as part of a plan to impose a uniform tax rate on all forms of gambling. But this rate was cut back to 15% following last month’s passage of the Finance Bill 2018 (which also included a new 20% tax on gamblers’ winnings).
SportPesa was a top sponsor of Kenya’s sports teams and associations until the new tax was imposed in January, after which the company made good on its promise/threat to scrap its ties to local sports teams. However, SportPesa renewed most of its earlier sponsorship deals in April, albeit at reduced rates, apparently convinced that the government was serious in rethinking its tax hike.
Amusingly, SportPesa came under fire last month for posting a photo to its website from a SportPesa-sponsored Shield Cup semifinal match involving the SportPesa-sponsored AFC Leopards team against Kenya Premier League rivals Sofapaka FC.
The photo showed Leopards’ Brian Marita and Sofapaka’s Dennis Ochiambo, with SportPesa’s logo clearly visible on Marita’s shirt. However, Ochiambo’s shirt featured no visible logo, despite Sofapaka being sponsored by SportPesa rival Betika.
If there’s any justice here, it’s that Betika’s boys defeated Leopards by a score of 1-0.