Regulator now asks SportPesa to reapply for betting licence

Betting online. FILE PHOTO | NMG

What you need to know:

  • Board says firm should seek fresh mandate after it struck deal with taxman.

Sports betting firm SportPesa will be required to apply afresh for a betting licence, the Betting Control and Licensing Board (BCLB) now says.

Acting board director Peter Mbugi on Thursday said the regulator will scrutinise the betting firm’s application once done and consider whether to give its nod for the firm to resume operations.

“Sportpesa should apply afresh for a licence,” said Mr Mbugi.

“We will scrutinise the firm’s licence application after its made and make a decision on this just like we have done for many others,” he added.

Mr Mbugi said the regulator had given the go ahead to several gaming firms and operators after due diligence on their applications.

SportPesa said recently it had reached a truce with taxman to resume operations once cleared by sector regulator.

Together with its rival Betin Kenya, they were among 27 firms whose betting permits were not renewed awaiting the outcome of an inquiry on suitability to operate.

SportPesa chief executive Ronald Karauri did not, however, respond to our queries by press time on the development. It was also not immediately clear whether the firm has lodged a fresh application after an earlier attempt was rejected following a tax compliance row with KRA.

The firm said earlier it has since been cleared by the Kenya Revenue Authority, setting the stage for its return to operations after an over two-month absence.

KRA in June demanded Sh8.59 billion from Safaricom as withholding tax arrears due from SportPesa and Betin Kenya, in a crackdown of the Sh200 billion sector. KRA was demanding that Safaricom pays Sh5.29 billion withholding tax arrears due from Gamcode Limited, trading as Betin, and a further Sh3.29 billion due from Pevans East Africa, which trades as SportPesa.

In an earlier interview, Mr Karauri said that “all pending issues had been settled” and a deal reached which should see the firm get back to business as soon as BCLB clears it. “We have held talks with KRA and they have allowed us to get back to business,” said Mr Karauri then. Sports betting companies’ combined revenue hit Sh204 billion last year.

According to SportPesa records, it paid Sh400 million last year as withholding tax on winnings. This was in addition to Sh3.6 billion betting tax, Sh1.12 billion corporate tax, Sh722.9 million withholding tax, Sh183.4 million withholding value-added tax and Sh269.6 million pay-as-you-earn for its 367 employees. This amounted to Sh6.29 billion in taxes up from Sh3.63 billion paid in 2017.