Kenyan betting firm pulls $5.8m sponsorship over tax hike

[The Buzz]

Kenyan online sports betting firm Sportpesa decided to cancel 600 million shillings ($5.80 million) in direct annual sponsorship for the country’s main football league and other sports in response to the government hiking taxes for by more than four times.

From Reuters:

The government increased the tax rate on gross profits for sports betting firms, lotteries and casinos to 35 percent last year, from 7.5 percent, to create a fund for sports, culture and the arts. It says the rapid growth of betting in a loosely regulated environment has hurt the young and vulnerable.

Ronald Karauri, the chief executive of Sportpesa, one of the biggest firms, said they were left with no choice but to cut costs in order to survive.

“All we will have to do is manage our expenditure in terms of our marketing expenses,” he told Reuters on Wednesday. “We had really committed ourselves to sports in the country so it is a very huge burden for us as a cost.”

Sportpesa has been sponsoring the Kenyan football federation, the country’s premier league, various clubs including last year’s league champions Gor Mahia, the national rugby union and boxing.

Read more here: https://www.reuters.com/article/us-k...-idUSKBN1ES0Y1

[Bojoko.com]

Quite an excessive increase from 7.5 to 35 percent. Maybe a multi-year program to increase the taxation gradually could have been an option. Perhaps the 7.5 percent taxation wasn't that thought through when installed, as they had to increase it so drastically. Hopefully, the football league and others can find an alternative sponsor!