Betin and SportPesa Government Crackdown.

Betin and sportpesa news: The recent ambush on betting companies by the Taxman left the gambling industry stunned. It’s not as if it was a beating for the firms only, the gambling faithful were also scathed.

SportPesa and Betin Kenya, the two giants and industry leaders were among the victims. The whip also spelled doom to other 20 or more betting firms.betin and sportpesa government crackdown

Their licenses were withheld, which literally meant a knockout from the business, at least for the time being. And with a Government order demanding the pay bill numbers and shortcodes pulled down, it was obvious that things were hot and hot.

According to the KRA, the companies had failed to remit withholding tax on winnings. This came about when Kenya’s Betting Control and Licensing Board (BCLB) sought clarification from KRA regarding payment of taxes by betting firms.

With news spreading across the country about the Taxman’s whip, a senior official from KRA, appearing before a Senate Committee denied these allegations. But as it has unfolded, a letter appearing to be from the agency was a full testament that indeed there was growing tension between KRA and the betting firms.

The letter, from the Domestic Taxes Department Commissioner to the BCLB director Tomkys Kigen, states, “However, we note that the licensees have active cases in court where they have sued the authority over tax recovery measures that were taken to recover the outstanding taxes,”

“Currently, there are no ongoing discussions of negotiations between the authority and the listed licensee.”

Obviously, this shows that indeed there was a beef between the firms and the Taxman. The bone of contention is the payment of taxes on the winnings.

Although KRA has denied this claim, with its Deputy Commissioner reiterating that KRA had no hand in the suspension of the licenses of 27 betting companies. Hence, explaining further that the decision to withdraw licenses was instigated and implemented solely by the Industry regulator, BCLB.

Evading to Pay Billions?

Despite the companies showing that they were tax-compliant, and operating within the law, the government insisted that the bookmarkers had been amassing revenues of up to Ksh.200 each year but paid only Ksh.4B in taxes last year.

Claims of money laundering were also leveled against the companies. According to BCLB, betting companies ownership and the existing weak laws contributed to a suspect business operation system.

However, the Chair of the Association of Gaming Operators and the SportPesa CEO, Ronald Karauri, disputed these figures by the government. He emphasized that the firms were not in a plundering spree and that they were making way less than the government perceived of them.

“That is a matter that is already in court and the government knows this, but there is a push to show that the industry is not paying its share of taxes, which is not entirely true,” he argued.

Coming on board to show the public what his SportPesa firm earned, Mr. Karauri was confident to show The East African, a part of the firm’s Financial Statements for the year 2018/2019. The same documents he sent to KRA showed that the firm made Shs.15B ($150million) in 2018 and paid Ksh.6.2B in taxes alone.

Firms’ Responses

The owners of the Betting firms have relentlessly denied any wrongdoing in the spiraling tax evasion impasse. For example, on the inclusion of underage gamblers, according to the government demographic statement that was released, the gambling platforms distanced themselves from the vice.

On July 24th, 2019 Game Yetu reached out to the two Giants, SportPesa and Betin Kenya. It was seeking to understand the progress of the negotiations between them and the government and whether the two will be resuming full operations any time soon.

But the statements from the two gambling stalwarts were as follows:

Betin Statement:

“In reply to your query, we are still addressing the matter with industry stakeholders, the regulators, and the government. Therefore, all we can do is wait until the matter has been resolved, there is no specific timeline but we will let you know as soon as this matter is over and you are able to deposit and resume playing. I’m sorry that you are not able to make your deposit and place your bets at the moment…”

SportPesa Statement

“We are in discussions with the government and relevant stakeholders and are positive that we will be back to full operation soon. We regret to inform you that our services are temporarily unavailable due to a suspension of services by key suppliers. SportPesa is working tirelessly to resume full operations.”

Back to Business?

On 3rd September 2019 SportPesa Kenya release a press statement. The main message was that it had been cleared by the KRA to resume its normal operations.

Even with that statement, there have not been any suggestions from fans around the country that things are becoming rosy on the road. Despite being cleared by the Taxman, it seems that BCLB is still not contented and therefore SportPesa’s operating license has not been renewed.

With claims hanging around that the betting giant is slain, SportPesa responded by this statement: “We are optimistic that soon, the company will be back to full operation”.

As to the news regarding the comeback of Betin, things are not any different. The bookmarker is relatively quieter and seems to have its trades handicapped at the moment.

What Next?

It can be confusing and frustrating at the same time when you lose your favorite business partner. This is what fans associated with these two betting fans are feeling at the moment.

However, it seems that the stalemate is arguably not ending today. And while this trend escalates, the customers and fans can only hope that the situation is going to improve the soonest time possible.

At the same time, this crisis puts in limbo an industry that was on a progressive roll, putting at risk the jobs of several hundreds of Kenyans who are employed by the betting firms.

How long this is going to last is left to be a secret between the firms and the government.