SportPesa facing £2.7m Kenyan claim over rugby sponsorship termination

SportPesa could be facing a KES417m (£2.7m) compensation claim from the Kenyan Rugby Union (KRU) over the decision to terminate its sponsorship with the sporting body in January 2018.

It is understood the KRU is pressing for Kenya’s High Court to adopt a ruling made by Kenyan arbitrator Dr Wilfred Mutubwa in February.

The claim centres on lost revenue following the early termination of a five-year sponsorship deal.

If successful, SportPesa would be required to repay the compensation in a major blow for the firm, which has endured a troubled history in its native Kenya since 2018.

SportPesa initially signed a five-year sponsorship deal with the KRU in 2016, a deal worth an estimated KES607m, the largest sponsorship deal in the KRU’s history.

The deal with KRU saw the Kenya rugby Sevens team don SportPesa-branded shirts, with the Kenya Simbas, Kenya Under-19 and Kenya Lionesses teams also covered under the sponsorship arrangement.

However, that deal was later terminated by the firm in January 2018 following the conclusion of a high-profile court battle in which SportPesa attempted to overturn a government-imposed 35% tax on gambling revenue in the country.

At the time, SportPesa CEO Ronald Karauri confirmed the end of all sponsorships with Kenyan teams but vowed to continue the firm’s operations in Kenya. The move was seen as a ploy to force a government rethink, something which was ultimately dismissed by Kenyan authorities.

Expressing its “great dismay” at the early cancellation of the deal, the KRU said at the time that it would have to completely re-examine its existing structures and called on the Kenyan government to provide financial support under the Kenyan Sports Act.

SportPesa later saw high-profile sponsorship deals with the Football Association of Ireland and English Premier League side Everton FC terminated after both changed their policies towards gambling sponsorships.