SportPesa Aounces Cancellation Of Sponsorship For Local Sports Clubs And Unions Over Increased Tax

SportPesa has aounced its cancellation of sponsorship for local sports clubs and unions due to the increased tax imposed on betting firms.

CEO Ronald Karauri made this known during a meeting at a Nairobi hotel on Friday saying that the withdrawal will begin on January 1, 2018.

He noted that the cost of doing business will be affected by the finance bill which President Uhuru Kenyatta signed into law on Wednesday, days after he had refused to over the threat of gambling.

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“Our cost of doing business will be greatly affected…we have to consider the impact on operating besides partnerships,” Karauri said.

“With the new [law]…we want our sports partners to plan accordingly.”

The betting firm further said via Twitter: “We will be giving notice to clubs and unions that from January 1 we will withdraw all sponsorships.”

The sponsorship cancellation will affect the KPL, AFC Leopards, Gor Mahia, the Kenya Boxing League, Kenya Rugby Union and teams.

KPL got a deal worth Sh450 million and KRU more than Sh600 million over a period of five years. The deal with Gor Mahia was for five years at more than Sh200 million while AFC Leopards’ was Sh45 million aually for five years.

The new law raises the tax rate on gambling to 35 percent which a lower rate than had originally been proposed.

Lotteries were previously taxed at five percent with betting firms/bookmakers at 7.5 percent. Casino gambling was at 12 percent and competitions like raffles at 15 percent.

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On June 13, Uhuru refused to sign the Bill and recommended that betting, lotteries and gaming activities should be taxed at the rate of 35 per cent.

He rejected it after Parliament deleted a clause designed to discourage youth from engaging in betting.

Treasury CS Henry Rotich had originally proposed raising the tax rate to 50 per cent, saying the rapid growth of on-line gambling hurt the young and vulnerable, and the proceeds from the tax would fund sports, culture and the arts.

The Finance Act seeks to amend the law relating to various taxes and duties. It also seeks to amend laws including: