SportPesa cuts over 450 staff following Kenya closure
All staff in Nairobi office made redundant with effect from 3 November
Embattled sports betting firm SportPesa has made 453 staff at its Kenyan offices have been made redundant following the firm’s decision to exit the Kenyan market.
All employees in the firm’s Nairobi office were given one month’s notice of redundancy, with contracts terminating on 3 November. SportPesa said it had taken the “extremely difficult decision” to make its staff redundant following the closure of its Kenyan operations.
Because of our good government, all these young Kenyans and the families and their dependants will have to look elsewhere, if that elsewhere even exists, for their daily bread. My heart bleeds. pic.twitter.com/HDa9jxILAM
— Tom Bwana (@TomBwana) October 2, 2019
This prompted many employees to decry the Kenyan government, calling its gambling tax policies “ridiculous”.
This morning, our beloved company Sportpesa had to break the news of over 400 jobs lost courtesy of the beloved government. Its a sad state of affairs as myself and colleagues have to hit the roads.
Mr president, the lost opportunities kill taxes as well #SaveMyJob pic.twitter.com/Tp8NE42fxn— Odero Odero♚ (@oderokidi) October 2, 2019
SportPesa announced its decision to end its Kenyan operations last week, citing an “over-taxed and unfair” operating environment in the Kenyan market, asserting such an onerous taxation level would drive business underground.
In a statement, the firm said the economic incentives for Kenyan bettors to bet would be “completely removed” due to the implementation of a 20% tax rate on all player bets.
“This will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya,” SportPesa added.
Urging the Kenyan government to reconsider its current stance towards sports betting, SportPesa said the economic and social impact of the government action would be felt by ordinary Kenyan’s and many of the country’s sporting teams.
Provisional estimates claimed the business generated an average of KSH100bn (£782m) in online sales.
SportPesa has said its decision to exit the Kenyan market will not affect its global offices or any of its current global sponsorships, which include English Premier League side Everton.
Fellow betting operator Betin has also closed its Kenyan operations, shedding over 2,500 jobs in the process.
Kenya’s sports betting market at a glance:
- All betting stakes: KSh200bn (£1.5bn)
- Gaming revenue: KSh20bn (£156m)
- Tax paid (at 50%) on gaming revenue: KSh10bn (£78.3m)
- Withholding Tax (at 20%) on KSh180bn (i.e. all betting stakes minus gaming revenue): KSh36bn
- Excise Tax (at 20%) on KSh200bn: KSh40bn (£313m)
- Total Tax (in addition to KSh10bn paid): KSh76bn (£595m)
- SportPesa paid KSh6bn in tax in 2018
Source: SportPesa
Betway and fellow operator Betika agreed to implement the 20% tax rate on all player bets following the reinstatement of their Kenyan licences.