SportPesa pulls Kenyan sponsorship after losing tax appeal
CEO Ronald Karauri says SportPesa will continue operations in Kenya but the group has terminated all sponsorship commitments effective immediately
SportPesa has cancelled its sponsorship deals with Kenyan sporting teams and leagues after losing a court battle to overturn a government-imposed 35% tax on all gambling revenues in the country.
The operator claimed the higher tax rate is in breach of constitutional rules which demand the public finance system “promotes an equitable society where the tax burden shall be shared fairly”.
However the operator saw its case dismissed by Kenyan courts in late December, prompting SportPesa CEO Ronald Karauri to post on LinkedIn today: “Effective immediately SportPesa will terminate all sponsorship commitments after losing the case against the government of Kenya’s proposed tax on gaming companies.
“SportPesa will however continue operations in Kenya.”
On top of the 35% tax on revenues, betting firms already pay 30% corporate tax and must dedicate 25% of sales to social causes like sports sponsorship as a legal requirement, before taking care of winnings and operating expenses.
SportPesa has been investing in other markets in recent months, perhaps in preparation for a negative court ruling, with the firm revamping its UK-facing casino and sportsbook, and entering the Italian market through the acquisition of RCS Gaming.