Betting ban: Clubs caught in crossfire as new season looms
Already, Gor Mahia coach Hassan Oktay has packed his bags and left.
Although both Oktay and club opted to forge a united front that the Turkish Cypriot was given a five-day compassionate leave of absence, sources intimated to Standard Sports Gor Mahia are in the red and have defaulted in paying his salary and house rent.
Kenya’s biggest club has also seen three of their best players; Haron Shakava, Jacques Tuyisinge and Francis Kahata leave for pastures yonder as uncertainty surrounds its shirt sponsor, SportPesa.
Gor Mahia now fears it is a matter of weeks before its operations ground to a halt given their Sh6.5 million monthly wage bill (Sh4.8 in player salaries). K’Ogalo must also raise money for the Caf Champions League campaign starting with Aigle Noir of Burundi assignment away on August 11 with the return leg 12 days later in Nairobi.
Yesterday, Kenyan Premier League CEO Jack Oguda was putting on a brave face saying the August 30 kick-off date of the SportPesa-sponsored topflight league remains.
“There is a real fear the league would be affected but we’ve to stick to the kick-off date,” Oguda told Standard Sports.
“It is not looking good. We have engaged Football Kenya Federation to follow up on the issue on behalf of the clubs. It is true clubs are not having it easy and therefore we trust the government will reach an amicable solution to the stand-off with the betting companies,” Oguda said adding that they expect Sh96 million from SportPesa this season, part of the league naming rights deal.
The league’s oldest club and 13-time Kenyan champions AFC Leopards are also in dire straits with the chairman Dan Shikanda revealing they have approached several corporates without success.
“It is easy to see why SportPesa is here as a genuine friend of sports in Kenya. Without them and various other betting companies our sport will be on its knees,” Shikanda said.
Leopards receive Sh55million while Gor Mahia get Sh65 million from SportPesa.
The stand-off between the government and the betting firms came to a head on July 12 when the state ordered the switching off of payment systems which include paybill numbers and SMS shortcodes.
The government further suspended betting licenses of some of the firms including SportPesa, Betin (Harambee Stars’ partners) and betPawa among others.
The gaming firms have since gone to court to contest the decision. The High Court suspended the decision by Betting Control and Licensing Board (BCLB) to withdraw Betin Kenya’s licence.
However, the government has refused to abide by the court order.
The immediate chairman of BCLB Kimani Kung’u recently faulted the cancellation of licenses based on tax compliance status of the gaming companies saying it amounted to killing the goose that lays the golden egg.
Kung’u said the revenue of betting companies at the end of 2018 was between Sh20 billion and Sh25 billion and that there is no way that figure could have risen to Sh200 billion just six months.
“People have bundled around some figures of Sh200 billion. You have to differentiate between revenue and input,” said Kung’u in an interview with a local radio station.
“You are not only killing the goose, you are eating the egg then you slaughter the goose and when the goose is dead you are asking where are the eggs,” said Kung’u in reference to the delicensing of gaming firms, the betting revenue figures from the government and the requirement to comply to tax regulations based on the same contested figures.
According to industry players, gaming tax best practices across the world are such that the government only takes a certain percentage of the winnings and not the stake.
For example, if a gamer puts a stake of Sh1000 in a game that has odds of 1.13X and wins, the person only gets sh130 as winnings.
A tax regime would therefore only tax the Sh130 which at the current withholding tax rate (20 per cent) mean KRA takes Sh26 and the gamer Sh104 plus his stake of Sh1000 bringing it to a total of Sh1104.
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