SportPesa terminates all local sports sponsorship with immediate effect

SportPesa CEO Ronald Karauri. [Photo: Courtesy]

Betting firm SportPesa has cancelled all local sports sponsorship immediately in response to imposition of 35 per cent tax on all gambling revenues.

The lottery's CEO, Ronald Karauri however, clarified that the cancellation of the sponsorships didn't  mean they were closing their operations in Kenya.

Kenya Rugby Union (KRU) in a statement said it received the news with great dismay after the cancellation of its partnership with the popular betting firm.

 

KRU’s full statement:

SportPesa has been a key partner in our planning and growth and has supported our sport at every level.

The cancellation of this contract forces us to completely reexamine our structures and we immediately call upon the government to step into the breach and provide the necessary support as guided by the Sports Act.

Our 2018 calendar includes the Rugby Africa Championships for our U20s in April, Lionesses participation at the HSBC Women’s  Sevens World Series in Hong Kong and as well as the Commonwealth Games, and the Women’s Africa  Cup 7s in September.

Simba, our National 15s team will play in the Africa Gold Cup which in 2018 will serve as the African qualifiers for the 2019 Rugby World Cup with Rugby World Cup qualification this year while Shujaa, the National 7s team takes part in the World Series between now and May, participates in the Commonwealth Games in Australia in April as well as the Rugby 7s World Cup in San Francisco in July.

We need huge support to manage all this and will immediately seek audience with the Cabinet Secretary of Sports to pursue this further.

SportPesa had Thursday (December 28) threatened to pull out of sports sponsorship in Kenya.

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 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 pulled out.