Sportpesa announces withdrawal of all local sponsorships starting January next year

[PHOTO: COURTESY]

FKF and KRU among the federations set to be hit hard by new move.

Kenyan sports industry is set to suffer a Sh2.26 billion loss in sponsorship as the new betting tax law takes effect from January 1, next year.

Betting firm SportPesa, the biggest investors in sports sponsorship, yesterday sent out a notice of termination to all its beneficiaries to be ready for huge cuts.

The company said they cannot absorb the 35 per cent betting tax imposed by the government and still continue honouring the obligations of their sponsorships.

Kenya Rugby Union , Football Kenya Federation (FKF) and Kenyan Premier League will be the biggest losers as among them they are supposed to receive Sh1.5 billion from the company in the next five years.

Other betting companies like Betway, Betika and Elitebet are also expected to follow suit by reviewing their sponsorships for local teams. Betway sponsors Mathare United while Betika are the sponsors of Sofapaka and Elitebet recently signed a sponsorship deal with Ulinzi Stars.

SportPesa Chief Executive Officer Ronald Karauri said the new taxation rule is simply not sustainable.

“We have today given a notice to all those entities that we sponsor to be ready for termination come January 1.

“We are giving them early warning so that they can look for other sponsors,” he said.

He said President Uhuru Kenyatta was ill-advised to sign the bill into law insisting that rather than discourage vices associated with betting, it will lead to loss of revenue for both the companies and the government.

He also took issue with the government’s rationale of imposing the heavy taxation in the guise of putting the money in a sports fund.

“It is the government’s responsibility to build infrastructure that promotes sports development, but they cannot take over the role of sponsoring teams. This must be done by the private sector.

“As a company, we feel we are being punished for our success and the billions of shillings we have pumped into the sports industry.

“You cannot just wake up and shut down an industry,” he said.