Sports betting firm SportsPesa had debunked rumours that it plans on exiting the Kenya market following a hike in taxes for betting companies and lottery competitions.
Two weeks ago, Kenya’s President Uhuru Kenyatta signed a finance bill into law that raised taxes on all gambling (betting, gaming, lotteries and prize competitions) incomes to 35 percent, from 7.5 percent on all revenues made from such activities, overruling the parliament’s decision to hold status quo in the process.
This sparked a backlash from operators who claimed that the take hike would erode profits and dampen business outlook.
Some operators, including SportsPesa, had threatened to shut down in the law wasn’t reversed, claiming that it made little business sense to continue operating.
“You cannot run a business just to pay tax to the government. It is not worth the sweat and were we not present in the UK and Tanzania, we would just wind up…I don’t think the government will benefit either because this is a death sentence to the whole industry,” said SportPesa Kenya CEO Ronald Karauri upon learning of the new bill.
However, the firm has moved to clarify the earlier statement of Mr. Karauri by saying he was taken out of context.
The firm now says that a statement from the firm’s Global CEO Gerasim Nikolov at a media briefing on Friday was taken out of context.
“Our CEO was simply trying to demonstrate that no business can survive such heavy taxation on revenue and not profit,” SportPesa said via its Twitter handle.
“SportPesa was the first and remains the best gaming brand in Kenya and SportPesa will be the last gaming brand to ever close in Kenya for whatever reason,” it added.