For months, Kenya’s online sports betting industry has been under attack by the government. Officials in Kenya claim the country’s sports betting operators owe millions in unpaid taxes. Fortunately, a new court ruling could mean that online sportsbooks in Kenya will be able to start operating again.
It has been a tough road for these companies in 2019. Fans of sports betting around the country are hoping this situation is finally cleared up. Let’s look at what’s happening right now.
Kenya’s Fight Against Sports Betting Operators, Explained
Kenya has one of the most lucrative sports betting industries in Africa. Not long ago, lawmakers here decided to open the market to foreign companies. This allowed operators based in Europe to offer sports betting services to Kenyan bettors.
Unfortunately, the government recently decided that these companies should begin paying more money. To do this, the Ministry of Finance is alleging that these companies owe millions of dollars in unpaid taxes. Altogether, these companies are said to owe hundreds of millions of dollars to the government.
This is largely due to a new tax structure that the government introduced. It calls for taxes on player’s stakes, rather than their winnings.
Unsurprisingly, these companies deny these allegations. SportPesa, the biggest online sportsbook in Kenya, claims that it’s always paid the correct amount of taxes. This company, along with many others, took to the Kenyan High Court to plead its case.
The efforts in court have been largely unsuccessful. Despite several MPs showing their support for these companies, the government maintains that they owe money. As a result, many online sportsbooks in Kenya are not operating.
This week, these companies received some fantastic news.
Court Ruling Could Allow Online Sportsbooks in Kenya to Return
As we’ve already mentioned, many of the biggest online sportsbooks in Kenya have been pleading their cases in court. This week, Kenya’s Tax Appeals Tribunal agreed that the new tax structure is unfair. As a result, the claims of withheld tax payments could be dismissed.
This gives companies such as SportPesa a chance to return to the market.
The court has agreed that a tax on player’s winnings is unfair for online sportsbooks in Kenya. It’s also mandated that the Kenyan Revenue Authority collects these taxes from bettors, rather than betting companies.
Ronald Karauri, CEO of SportPesa, commented on the court’s decision to the media this week.
“Today’s ruling is a significant development for both SportPesa and the wider betting sector in Kenya, reversing previous government policy that had rendered the sector commercially and economically unviable, with a major, negative impact on jobs, local economies and sports in Kenya,” he said.
Hope is that this decision allows all major internet sports betting companies to resume their operations. Interestingly, reports are surfacing that show rates of gambling addiction are rising in Kenya.
76% of Kenyans claim to have gambled at least once in their lives. This industry generates more than $2 billion annually in the country yet lawmakers are concerned about the social impact it’s having.
“The local governments are dealing with high cases of suicide as a result of this desperation … we must say no,” said Fred Matiangi, Kenya’s Ministry of the Interior Cabinet Secretary. “What kind of country are we building, are we telling our children to do nothing with their lives except bet and wait on a big win to become an overnight millionaire?”
It will be interesting to see how the government deals with the country’s growing rates of gambling addiction
Online sportsbooks in Kenya are celebrating right now. Soon, most are likely to begin operating again. Stay tuned for more updates over the next few months!
A longtime sports and gambling enthusiast, Kevin looks to present up-to-date and reliable information for readers. If he’s not writing, he’s probably watching MMA or playing blackjack. ...
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