Kenya’s two largest sportsbooks, SportPesa and Betin, have won their wagering tax dispute with the government.
The row with the Kenyan Revenue Authority (KRA) had resulted in both brands ceasing operations in the country. Affiliates on their programs were therefore forced to pull out, while hundreds of staff were also made redundant.
What happens now?
This dispute started because the KRA claimed that the two bookmakers owed a sizeable sum in unpaid tax. Payment processing for both was suspended in July this year, which ultimately forced them to leave this market. 25 other operators also had their licences revoked.
However, the tribunal in Nairobi sided with the operators instead of the taxman. It ruled that the 20% withholding tax was applicable for punters’ net winnings, rather than overall stakes.
Because both operators’ licences were suspended, the pair of them will need to — in the words of the country’s national gambling authority — “apply afresh” for new ones. At the moment, it remains unclear as to whether or not they’ll do so.
The above means that affiliates who were part of these operators’ programs still can’t re-enter the Kenyan market via them. However, their legal victory provides a chance that business could soon be back to normal here.
Efforts are being made to find a middle ground. The Sportpesa and Betin tribunal was, in part, intended to somewhat protect operators from aggressive tax pursuits and legal action.
Continued clampdowns on betting and tax
It’s worth noting that SportPesa has won tax-related legal battles before. However, this hasn’t deterred Kenyan authorities from trying to make more money from operators. Not long ago, the KRA claimed that Betika owed them $17 million. This operator was one of the few to apply the controversial ‘winnings’ tax since its introduction in July 2018.
Sportsbooks in Kenya have enjoyed success in recent years, but this has prompted the government to question betting’s social impact. New gambling regulations were introduced in May 2019. Outdoor and social media advertising, relating to sports betting, were both banned.