Kenyan sportsbook operators SportPesa and Betin are one step away from resuming their operations in the country. The Kenyan Tax Appeals Tribunal recently ruled against a government measure to introduce a tax on users’ winnings.
Long battles could come to an end
After a long fight in the Tribunal, SportPesa and Betin finally received a favorable ruling. The recent judgment allows the operators to challenge the Kenyan controversial gambling tax. The country’s authorities want to tax the players’ winnings on the platform instead of the stakes. SportPesa laid off its entire local staff and pulled out of all sponsorship deals before eventually exiting the market. Betin also left the market around the same time to protest against unfair tax policies.
The operators said that the government created unfair betting conditions by targeting operators instead of charging player revenues. The Tribunal agreed with the operators’ view. According to Ronald Karauri, the chief of SportPesa, the ruling is a major development in the Kenyan market, and the company may think about returning there soon. He said that while the management is against taxation policies; it considers Kenya an important market.
When will SportPesa return?
According to Karauri, the company is considering its return to the market and checking when it could be possible to reenter. He said,
“SportPesa will now reconsider the future of its operations in Kenya. We encourage the authorities to take the Tax Appeals Tribunal’s ruling fully on board and to now apply a reasonable approach to gambling regulation and taxation, in line with international best practice.”
The government’s new tax policy was enforced on July 1 this year, which 27 operators refused to comply with. The recent ruling has called the operators’ point of view correct, but it hasn’t changed the gambling code of the country. This means that the market conditions have barely changed since their exit. If Betin and SportPesa start their operations again, the bettors will have to play a lot more than before and pay a tax on each stake- regardless of their win or less. This environment will discourage bettors in the market.
When SportPesa originally opposed the taxes, it tried to pressure the government into changing its policy. Some policymakers backed their decision and said that a pullout by the operator would sound the death bell for the Kenyan betting industry and eventually hurt the GDP.
The Kenya Revenue Authority (KRA) is planning to appeal the decision.