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Regulator takes betting firms to task over sponsorship spending

BUSINESS
By Dominic Omondi | May 28th 2022 | 2 min read
By Dominic Omondi | May 28th 2022
BUSINESS

The betting regulator has asked gaming firms to reveal the money they have spent on sponsorship of sports clubs and community projects.

In a letter seen by Weekend Business, Betting Control and Licensing Board (BCLB) chief executive Peter Mbugi has directed all gaming operators to disclose activities, amounts and beneficiaries of their corporate social responsibility (CSR) spending.

“The board wishes to inform you to submit report on all CSR activities conducted during the licensing period," he said in a letter dated May 17.

"This should detail the name of activities, amounts spent and evidence of the same should be attached to the report,” he said.

This comes amidst murmurs that betting companies have abandoned their CSR activities to local clubs, with speculations that most of them might be channelling the funds into political parties.

Local football clubs have been going through financial difficulties, with Mathare United officially suspended from the Kenyan Premier League by the Football Kenya Federation Transition Committee after missing three matches.

While it is not mandatory for gaming operators to financially support local clubs, they are expected to show how they spend on CSR activities.

Mr Mbugi said most of the firms claim their marketing spend is CSR or pledge to support local football clubs and community projects, but do not actually spend the money.

Betting companies last year drew the ire of BCLB after they threatened to withdraw their sponsorship of Kenyan sports following the government’s plans to reintroduce a 20 per cent excise tax on betting stakes.

The taxes were eventually passed, with MPs agreeing with National Treasury’s position to heap even more taxes on gambling in the next financial year starting July 2022.

“In today’s world, betting firms are the ones supporting football. But if we tax them more and some of them pull out, where will we turn to?” asked the then Football Kenya Federation president Nick Mwendwa a few days after Treasury Cabinet Secretary Ukur Yatani read the budget.

“Some of the firms have already made it clear that if the tax proposal is approved, they will terminate their sponsorships,” said Mwendwa.

Mbugi argued that the move to reintroduce the tax is one of the measures to curb the betting craze.

“The 20 per cent excise tax on betting stakes is not a new thing in the gaming industry; it’s just a reintroduction," he told The Standard last year.

"But it shouldn’t affect the collaboration that the operators had with teams in this country. Basically, their businesses will not close,” he said.

BCLB will also be going after betting companies that have been operating in the country without a licence.

Mbugi said whenever they identify such firms, they work with the Communications Authority of Kenya to bring down their websites.

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