After a long battle with the Kenyan government over tax arrears and new regulations, SportPesa was left with no other option but to shut down local operations and exit the Kenyan market. The company was Kenya’s biggest bookmarker and also sponsored local teams Gor Mahia and FC Leopards in the Kenyan Premier League. SportPesa was among the 27 bookies whose licenses were not renewed in July following allegations of tax arrears. The Kenyan government ordered local telecom company Safaricom to suspend any «Pay Bill» numbers the 27 operators were using to enable customer deposits.
After weeks of deliberations and court appearances, some of the 27 companies were able to comply with the new regulations that included a 20% tax on all winnings. Both SportPesa and Betin (another major sports bookie) did not meet these needs, and their licenses have been suspended since July. Last week, the operator decided to close its local operation.
Laying Off Employees
According to SportPesa CEO Ronald Karuri, the company was forced to close all its services in Kenya, including local programs and sponsorships. In a meeting held last week, employees were notified of their inevitable fate. Some 400 employees will be laid off after receiving their one-month employment termination notification. Their termination will be effective from November 3rd.
SportPesa became the second bookie to shut down its operations after Betin had done the same a week earlier. According to pundits, the shutdown will hurt the economy in multiple areas. Safaricom, for instance, has projected a drop in their growth rate from 18.2 % to 13.3% following the exit of both SportPesa and Betin. The two companies accounted for up to 7% of the telecom’s revenue. Kenyan Premier League teams Gor Mahia and FC Leopards are also in search of new sponsors. However, SportPesa assured their Merseyside club, Everton, that the Kenyan exit will not affect their international operations. It will be «business as usual» in Liverpool even as the bookie looks for other open markets to enter.
Meanwhile, several sports bookies have stepped up their offers and platforms to bridge the wide gap left by SportPesa and Betin. Betika and Betway, in particular, has become a favorite among punters and has several sports betting options. These betting sites already have frameworks that allow the controversial 20% tax imposed on all wins. It will be interesting to see how the remaining bookies adapt and grow now that they have the most significant market share.