SportPesa files lawsuit against Kenyan Government’s new gambling tax

  • Lawsuit filed against Kenyan Government
  • SportPesa strongly opposes new 35% gambling net revenue tax

Online sports betting operator SportPesa have reportedly filed a lawsuit against the Kenyan Government opposing their new gambling tax.

SportPesa logo on a football shirty

Kenya is a key market for the gambling operator but the government has raised annual gambling tax to 35% on net revenue, something which SportPesa has swiftly opposed.

The East African gambling market has grown significantly in the last few years thanks largely to the use of smartphones from young males in countries like Kenya.

However Kenyan President Uhuru Kenyatta signing the Finance Act which, which raises the gambling tax to 35%, marks a sizable increase from just 7.5% on gambling industries currently.

Original plans were to raise the gambling tax to an even higher 50% though this failed to get any support amongst lawmakers in the region.

The new tax rate will apply to all online gambling services in the country which includes casino, lottery, betting and all other competition activities. The new legislation is set to come into force on January 1st 2018.

Kenyan officials have justified the new measures by stating that they are designed to discourage young people from gambling, a group which is key for companies like SportPesa in the region.

Whist SportPesa will now attempt to fight the new legislation in the hope that it won’t come into force, they have already said they will not leave Kenya despite the huge hike in taxes.

However, whilst they will not leave the country, SportsPesa have already announced that they will stop sponsoring the Kenyan Football League as a result of the new tax, which the league’s chief Jack Oguda described as a blow to football in the country.

Whilst the news of SportPesa staying is good for the Kenyan Government, the tax laws set to come in next year are hugely damaging for operators in the country and there are fears it could hamper gambling industry growth in the country.

SportPesa meanwhile will do all they can to prevent the new laws from coming to fruition.

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