- Kenyan Sports Betting Website are upset at new 35 percent tax on betting, lottery, gaming and competition activities.
- New Finance Bill is set to come into power in January 2018
The CEO of a Kenyan online casino and sports betting website, has hit out over a new 35% tax on all casino and betting activities in the country.
A new finance bill was passed into law in Kenya last week with the addition of the new tax which led to Ronald Karauri, the online casino‘s CEO, announcing the sports betting company will end sponsorship of the Kenyan Premier League (KPL).
KPL’s chief Jack Oguda told the BBC that Sportpesa’s decision had dealt a blow to Kenyan football.
Mr Karauri, who chairs the Association of Casino Operators of Kenya, said the operator had been forced into the decision due to the negative impact the tax would have on their operations.
It looks like the tax will not affect SportPesa’s sponsorship deals outside of Kenya, they currently sponsor Everton FC and Hull City Tigers.
Why has the Tax been introduced?
The tax has been introduced as a deterrent mainly to the youth.
It comes about after critics have claimed that casino firms have done little to reduce addiction to betting, lotteries, competition and casino games as well as financial literacy to help winners prudently spent proceeds from gaming activities.
“Exploitative and punitive and will reverse the gains made so far”
Ronald Karauri, CEO SportPesa
Karauri went on to say that the tax is to heavy stating “no business can sustain a 35 percent tax on gross profit and another 30 percent corporation tax.”
Five million Kenyans take part in gambling activities with many gaming operators be believing a hike in taxes will do little to dissuade gamblers.
Who sets to lose out if SportPesa pull the plug?
The gaming organisation have a big sponsorship presence in Kenya with deals in place with Kenya Sevens team, football premier league clubs Gor Mahia and AFC Leopards as well as the National Super League side Nakuru All Stars.
How Will It Work?
Kenyan Casino operators have already avoided a 50% tax hike which failed to pass, however, this has been reduced to 35% but the former taxation rate stood at 7.5%.
The tax burden is set to be shared between the operators and the players. Players would pay 15% on their winnings, while the operators’ revenue would be taxed at 20%.
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