BUSINESS

Kenya’s gamblers told to withdraw funds before payment shutdown

TAGs: Kenya, m-pesa, safaricom, SportPesa

kenya-sports-betting-sportpesa-payments-blockedKenya’s gamblers have been ordered to withdraw the money from their online accounts by midnight Friday or kiss their cash buh-bye.

On Thursday, Kenya’s Ministry of Interior sent a letter to the nation’s telecom firms stating that, as a result of the recent suspension of numerous betting operators’ licenses, the telecoms were to “allow gamers of the subject firms to withdraw any funds that they may have deposited” by midnight on Friday (12).

On Wednesday, the government ordered the nation’s leading telecom operators – which also offer thriving mobile payments systems – to withdraw the pay bill numbers and SMS codes for the 27 operators whose licenses weren’t renewed on July 1. The government claims the affected operators are either in tax arrears – a claim that the operators hotly dispute – or some other violation of their licensing requirements.

Safaricom, which operates the dominant M-Pesa payment channel, originally protested the order, noting that millions of customers could lose access to their cash if the payment codes were revoked without warning. Safaricom argued that this would expose the company to potential legal action, which apparently led to the government’s 48-hour notice.

Kenyan media reports indicate Safaricom has already blocked payments to some betting operators, as customers of market-leading betting operator SportPesa reported that attempts to send money to the company resulted in the following notice: “Failed. Dear Customer, this Paybill is unavailable due to the Government directive to suspend Betting Paybill numbers. Kindly contact your Betting Company.”

SportPesa issued a statement Friday saying it was “extremely disappointed by the recent malicious actions by the Betting Control & Licensing Board (BCLB) to block our payments systems despite the existence of a court order” allowing the company to continue operating while it appealed its license revocation.

SportPesa also assured customers and stakeholders that it would be “challenging these actions” and expressed hope of “resolving this matter very soon.”

SportPesa added that the payment shutdown was “the latest in a series of abrupt measures from BCLB that only serve to discourage and disrupt business.” SportPesa insisted it was “fully compliant with all tax and legal requirements” and warned that its support for local sports and community groups was “now at severe risk following the measures taken by BCLB.”

SportPesa is a major sponsor of Kenyan sports teams and leagues, but the company scrapped its sponsorship deals in 2018 after the government hiked betting taxes from 7.5% to 35%. SportPesa later resumed its sponsorship activity when the government lowered the rate to 15%.

On Friday, the Star quoted Kenyan Premier League CEO Jack Oguda calling the developments “a worrying situation for the league, Kenyan football and the two big clubs who are sponsored by SportPesa.” Oguda said Kenyan football was “on the receiving end of the unending tussles” between the industry and the government.

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