Kenyan authorities claim betting operators owe $586m in tax

The battle over sports betting in Kenya has heated up, with authorities claiming the nation’s bookmakers owe Ksh 61 billion (US $586m) in unpaid taxes.

That figure has more than doubled since May, when Fred Matiang’i of the Interior Cabinet put the outstanding total at around Ksh 26 billion (US $250m).

Elizabeth Meyo, deputy commissioner of the Kenya Revenue Authority (KRA), confirmed the new total when she addressed the Senate Committee on Justice, Legal and Human Rights on Wednesday.

She said the bill was split between 72 licensed betting operators, including each of the 27 firms that had their permits suspended by the Betting Control and Licensing Board (BCLB) at the start of July.

However, the bookies in question claim the $586m quote is hundreds of millions more than they are legally required to pay.

The conflicting assessments stem from confusion surrounding recent changes to Kenyan gambling laws.

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Up until 2016, betting firms were required to withhold 20 per cent of a punter’s net winnings (i.e. not including the amount staked) on any and all wagers.

That rule was scrapped and then reintroduced two year later in 2018, but with the 20 per cent tax applying to gross winnings (i.e. including the amount staked).

According to Meyo, the offending bookies are wilfully refusing to comply with federal law and will face severe consequences if they don’t pay up.

Representatives for the betting firms, including SportPesa CEO Ronald Karauri, contend that it is impossible to meet those demands when their operations and finances are in limbo.

The Central Bank of Kenya recently suspended payment services for several online bookmakers despite a Kenyan court declaring a stay on the suspension of their gambling licences.

That move drew criticism from the Senate Committee, with chairperson Samson Cheragei quoted as saying the government was “treating court orders as tissue papers”.