Kenya government legally exposed

SportPesa, a sports betting company, sued the government of Kenya over the 50 percent tax rise for the complete gaming industry.

Kenya.- The government of Kenya decided to reduce the sports betting operations nationwide by increasing 50 percent the tax conditions. As response, local company SportPesa has sued the Kenyan administration for the “unconstitutional” measure. The updated tax regulations were introduced by the National Treasury Cabinet Secretary Henry Rotich after reading the 2017/18 budget.

As the government considered sports betting industry was growing too fast, the new taxes went from being 7.5 percent to 50 percent. Furthermore, the regulation also establishes 50 percent of tax payment for the lottery sector, which used to contribute with 12 percent; for the gaming industry, which has been paying 15 percent, and the competition sector, which also contributed with 15 percent.

“The expansion of the industry has had negative social effects on society, especially on the youths and vulnerable members of the society,” stated Rotich. Weeks after the proposal was published, Bradley Limited Trading company that manages the Pambazuka National Lottery presented the formal sue to avoid the tax increase. The company, where owner of SportPesa, Pevans East Africa Ltd, holds a majority stake, argues that the measure is “unconstitutional.”

The tax increase is backed by Kenya President Uhuru Kenyatta, who commented: “We were very concerned about betting among school-goers so we made it difficult for people to bet. We want people who bet to have their money go to constructive projects through tax.” The suit was made against Henry Rotich, Interior Secretary Josephy Nkaissery, Attorney General Githu Muigai and the Betting Control and Licensing Board, as Calvin Ayre reveals.