BUSINESS

Kenya’s central bank cuts service to suspended betting licensees

TAGs: Kenya, SportPesa

kenya-sportpesa-sports-betting-trafficKenya’s betting operators keep pushing back against the government’s regulatory crackdown, even as the government continues to up the enforcement ante.

On Tuesday, Kenyan media reported that Interior Secretary Fred Matiangi’i had signed “immediate” deportation orders for 17 gambling sector execs, most of whom are Eastern European nationals, for violating the terms of their local work permits. An Interior department spokesperson said the execs were “engaging in business not stated on applications.”

The execs in question reportedly worked for companies including Betin and SportPesa, two of the 27 firms whose licenses were suspended or revoked on July 1 in an ongoing fight with the government over alleged tax non-compliance. It’s unclear if these deportation orders are brand new or if the government is simply following up on the 17 deportation orders Matiangi’i signed back in May.

Kenya’s betting operators have been walking around with targets on their backs ever since the government declared that the sector owed billions of shillings in taxes, a claim that some of these companies have challenged in court. Last week, the government cut off these companies’ payment processing channels, preventing them from accepting deposits or paying out winnings.

On Monday, the Central Bank of Kenya went one better, issuing a statement to commercial banks noting that the 27 gaming firms’ licenses were currently invalid, and thus the banks were to halt the provision of banking services to the affected firms.

SportPesa began a public relations push on Monday, taking out full page newspaper ads touting its tax compliance and support for local sport and community programs. SportPesa has since followed this up with a new infographic aimed at refuting the government’s claims that betting companies are preying on vulnerable youths.

SportPesa cites Google data to show that bettors aged 25-34 years old account for nearly 60% of all site visits, while those aged 35-44 account for 23.5% and the 18-24 demo accounts for less than 5%. SportPesa is an online-only company, and thus “playing on the SportPesa platform is only through mobile money which restricts persons under the age of 18.”

SportPesa has warned that it may be forced to lay off up to 600 local staff if the standoff with the government persists. On Tuesday, agents who act for a number of the affected firms similarly warned that hundreds of jobs—most of which are held by younger Kenyans, among whom unemployment is rampant—were at risk unless the government took its foot off the industry’s neck.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com