The Kenyan company SportPesa has decided to cancel all of its sponsorship deals after a dispute with the government over new taxes.
Kenya.- SportPesa has announced that it has decided to cancel all of its sports sponsorship deals in the country. This comes after a dispute with the local government due to the approval of a new betting tax in the 2019-20 financial budget.
The dispute with the government started when the authority announced that it was considering a 30% new betting tax. The Treasury Cabinet Secretary Henry Rotich introduced excise duty on betting activities at 10% at the amount bet.
The operator, which sponsors football and rugby, among other sports, said that while it is complying with the tax laws, it is extremely challenging to operate within the new market conditions.
“We regrettably wish to announce, due to the uncertainty of this situation, SportPesa will be cancelling sports sponsorships effectively immediately. All clubs and partners have received notices as provided for in their contracts,” said a SportPesa spokesperson.
Kenya’s Football Association asks the government to ease stance on betting firms
Football Kenya Federation President Nick Mwendwa urged the government to slow down on its stance on betting firms. He referred to the fight between the government and betting firms in regards to tax compliance.
Mwendwa said that the sport will be the biggest loser when it comes to this tax compliance fight. Mwendwa singled out SportPesa’s contribution of €39 million that supported different football entities. The president said he feared that this fight with the government would leave teams without this kind of financial support. SportPesa’s announcement ultimately led to the league without this contribution.
Two of Kenya’s biggest football teams, AFC Leopards and Gor Mahia, were mentioned by the media as being two of the ones that could pull out of the league due to lack of funds.