Sports in panic as gaming companies threaten to withdraw sponsorship in Kenya
Betting firm SportPesa yesterday threatened to pull out of sports sponsorship in Kenya.Yesterday, High Court judge John Mativo dismissed a case filed by betting firms challenging new regulations passed by Parliament to control gambling.
Justice Mativo ruled: “I find and hold that the new taxes do not infringe on the petitioners' rights to property since they are aimed at serving a legitimate public interest. The legislation was legally enacted and it overrides the legitimate expectations of the betting firms.”
Betting firms were seeking to stop the implementation of a 35 per cent betting tax increase.
Several clubs and sports associations contacted by The Standard Sports said they had been verbally informed that all their sponsorships would cease from next week. SportPesa is expected to make an official announcement on the matter today.
Football Kenya Federation President Nick Mwendwa said: “We have been informed not to expect any more money from SportPesa as they cannot continue sponsoring us under the new circumstances. We will lose about Sh120 million a year and this is a lot of money going away from the game. We are still pleading with the Government to find a way to resolve this issue without chasing away our key sponsor.”
Mwendwa also said he was worried that AFC Leopards and Gor Mahia, which are both sponsored by the betting firm, could be facing financial ruin.
“The two teams have no other source of income and considering that they will represent us in continental football next season, it makes it difficult for them to honour their engagements,” he said.
The AFC Leopards chairman, Dan Mulee, said he was saddened by the development and asked all the sports federations and clubs affected by the withdrawal to lobby Parliament to review the new tax law.
“As it is even what we receive from SportPesa is not enough to cover our obligations. It will be tougher for us and we could be forced to go back to begging from politicians, which is not sustainable in the long run. We have to find a way to convince Parliament to change this law, otherwise we are all doomed,” he said.
The Kenyan Premier League chief executive, Jack Oguda, said local clubs would have to take further cuts on their monthly grants if SportPesa pulls out.
“We significantly cut grants when SuperSport pulled out as broadcast sponsors at the beginning of the season and if we lose our title sponsor, it will get even worse for local clubs.”
The Kenya Rugby Union chairman, Richard Omwela, confirmed that he had received communication from SportPesa that it would no longer sponsor the union.
“We got a call this morning and are now waiting for the official communication to that effect. On this my opinion is that rugby is dead. All our contracts with the players were based on us receiving money from SportPesa. As it is we cannot honour them.
“Next week, we will ask the Government to give us money to honour these obligations as they are the cause of this problem. If they cannot, we will nullify the contracts as we cannot pay,” he said.
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