Betting funds: High taxes to affect sports

SportPesa’s decision to terminate the contracts of its partners after being slapped with higher taxes will have a negative impact on the sports industry, a recent research shows.

The four-year-old sports gaming company is, according to a survey conducted by research firm TIFA, a major spender in the sports industry, pumping in almost half a billion shillings in direct sponsorships alone each year.

TIFA says SportPesa’s contribution to the wage bills of the clubs the company supports has increased by a whopping 1,359 per cent in the past three years. This includes the salaries clubs’ secretariat staff and players. SportPesa locally supports eight teams and organisations as well as rally driver Leonardo Varesse.

“Through all the properties that SportPesa support, there has been an increase in the number of those employed from 952 to 28,611,” the report states.

The Government charged this industry differently depending on the nature of the company. Lotteries paid a tax of five per cent, sports betting companies were charged 7.5 per, casinos paid 12 per cent, while the tax for competitions was 15 per cent.

The TIFA research says: “The total fans’ expenditure in 2016 and 2017 was Sh294 million and Sh376 million,” states the research report.

SportPesa has been battling the implementation of the new tax until last week when it lost a court case challenging the new rate of 35 per cent. [Cyrus Ombati]