June 27 – Kenyan online betting operator SportPesa is to pull out of its sponsorship of the Kenyan Premier League and the Kenyan Football Federation after the government introduced a new law imposing a 35% tax rate of gross profit on all gambling activities.
Previously betting firms were paying 7.5%, while lotteries were taxed at 5%, casino gambling at 12% and competitions such as raffles at 15%.
SportPesa founder and CEO Ronald Karauri announced on Twitter that his company would be “giving notice to clubs and unions that from January 1 we will withdraw all sponsorships.” Karauri said he was announcing the move in advance to allow its sports partners “to plan accordingly”, and that it was a decision that had been difficult to make.
Kenya’s Parliament had initially put a 50% tax on sports betting sites and lottery companies, which was then lowered to 35% before president Uhuru Kenyatta signed it into law.
Kenyan authorities say the tax was imposed to deter minors from betting after parents and religious leaders had expressed concerns and called on the government to act. Kenyans are among the biggest gamblers in Africa with up to 75% of 17-to-35 years olds in the country have admitted to having placed a bet.
Founded by Kenyan multi-millionaire Ronald Karauri in 2014 with a $4 million investment from a group of investors, SportPesa reportedly now has a turnover of more than $100 million.
As well as the Kenyan league and federation, SportPesa also sponsors two of Kenya’s biggest teams – Gor Mahia and AFC Leopards.
Karauri says SportPesa’s sponsorship outside kenya will be unaffected. SportPesa has expanded its football sponsorships in Europe most recently becoming the official African betting partner of Spain’s La Liga in a three-year deal.
The company also has f club sponsorships in the Premier League including Arsenal, Southampton and Everton.
SportPesa will be Everton’s new shirt sponsor in a five-year deal starting next season. Everton chief executive Robert Elstone said it the biggest deal in the club’s history – estimated at £18 million per season. The company is basing its European headquarters in Liverpool.
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