SportPesa ready to resume betting business in Kenya

SportPesa has received the green light to resume business operations in Kenya, bringing an end to the tedious two-month stalemate between the national government and the betting firm.

The firm, which is operated by the Pevans East Africa Limited, released a statement on Tuesday announcing that it was ready to resume full operations after its Kenyan gambling license was renewed.

A section of the statement read: “There has been notable progress in these sessions and we are pleased that KRA has now cleared us to have our license renewed. SportPesa is confident that these processes will be completed soon allowing the company to resume full operations.”

Trouble began for SportPesa in early July when the company was named among the 27 gambling operators that had failed to settle withholding tax arrears on winnings amounting to KES 61 billion (USD $610m). This consequently forced the Betting Control and Licensing Board (BCLB) in Kenya to refuse to renew the operating licenses of SportPesa and the 26 other firms until they fully complied with KRA’s definition on winnings.

According to the taxman, winnings comprise of the gross amount of the payout to the punters in addition to the amount staked, a definition that goes parallel with SportPesa’s interpretation of the same law where winnings are simply the positive difference between the payout made and stakes placed.

SportPesa recently went to the High Court of Kenya to demand for compensation over money lost as a result of the government shutdown, only for the case to be thrown out by the court.

Speaking while making the ruling, Justice John Mativo stated: “The claim for damages for alleged loss of business is legally frail, damages must be pleaded and proven.”

Mativo further argued that SportPesa never pleaded with specifically the alleged loss or details to form a basis for the claim, as a claim for losses incurred in the business must be presented in the form of oral evidence which was not provided in the case.

Having now been granted the permission to resume its operations, SportPesa will have little choice but to go with KRA’s definition of winnings. It will be interesting to see how punters will react to this interpretation of the amendment of the Finance Act 2018, as the betting firm will by law set aside 20 percent of what punters stake and win, as tax.

Kenyan lawmakers recently condemned the decision by the national government to revoke the operation licenses of the betting companies, arguing that they were not only baseless accusations but also contributed to the unemployment of many of the constituents.

With the pay bill numbers and the SMS shortcodes of the betting firm set to be restored, SportPesa also announced that it will soon reveal the date when its services will resume in Kenya.

This is certainly a welcome announcement for the Kenyan Premier League which launched the 2019/20 campaign without an official sponsor following SportPesa’s withdrawal on the grounds of an unfavorable business environment created by the national government.