Kenya’s betting firm SportPesa has in a dramatic decision canceled all local sports sponsorship with immediate effect.
This follows the taking of effect of the 35 per cent tax law on all gambling revenues.
Last week on Thursday, Sportpesa steered by CEO Ronald Karauri warned that it would pull off all local sponsorships if the law was not rescinded on.
Sportpesa together with a host of other betting firms had moved to court seeking an injunction barring the implementation of the law.
However, High Court Judge Justice John Mativo dismissed their case citing that according to Game Yetu, a subsidiary of the Standard “I find and hold that the new taxes do not infringe on the petitioners’ rights to property since they are aimed at serving a legitimate public interest. The legislation was legally enacted and it overrides the legitimate expectations of the betting firm.”
Sportpesa is scheduled to make the announcement officially today.
Clubs such as the Rugy Union which have been under sponsorship from Sportpesa have urged the government to reconsider their stand since cancellation of the sponsorships will adversely affect them.
Kenya Rugby Union in reaction to the news said in a statement: “SportPesa has been a key partner in our planning and growth and has supported our sport at every level.
“The cancellation of this contract forces us to completely reexamine our structures and we immediately call upon the government to step into the breach and provide the necessary support as guided by the Sports Act.”
Sportpesa is the official sponsor of Kenya Gor Mahia and AFC Leopards.
Football Kenya Federation (FKF) President Nick Mwendwa said the move by Sportpesa was a big blow to Kenya’s sports sphere.
He called on government to re-negotiate terms and conditions for betting firms.
“We have been informed not to expect any more money from SportPesa as they cannot continue sponsoring us under the new circumstances. We will lose about Sh120 million a year and this is a lot of money going away from the game. We are still pleading with the Government to find a way to resolve this issue without chasing away our key sponsor,” said Mwendwa.
AFC Leopards chairman, Dan Mulee called on the National Assembly to repeal the tax law.
“As it is even what we receive from SportPesa is not enough to cover our obligations. It will be tougher for us and we could be forced to go back to begging from politicians, which is not sustainable in the long run. We have to find a way to convince Parliament to change this law, otherwise we are all doomed,” he said.