Gor Mahia, AFC Leopards bear the brunt of government’s punitive betting ban

About 27 companies that had invested heavily in various sports in Kenya had their licenses cancelled following negative findings of the Betting Control and Licensing Board (BCLB) that they were not tax-compliant.

The gaming industry has been operating in an extremely challenging business environment following government’s decision to subject them to punitive measures such as delayed license renewal and the suspension of Pay Bill numbers.

This decision by the Kenyan government has considerably reduced the level of business operations prompted some companies to scale back on investments made in different sports.

SportPesa for instance was forced to cancel all sports sponsorships in Kenya, the gaming giant was sponsoring the Kenya Premier League (KPL) to the tune of Ksh 450 million.

KPL and SportPesa had inked a four and a half year deal to gain naming rights. The gaming company was also sponsoring Kenya’s top two favorite football teams Gor Mahia and AFC Leopards in a deal worth Ksh 120 million each year.

CAF Champions League

The withdrawal of the sponsorship by SportPesa is a huge blow these clubs which have no other sponsors. Gor Mahia for instance is participating in CAF Champions League which requires them to travel abroad regularly to play other teams across Africa.

Without SportPesa’s sponsorship, the Kenyan premier league giant might be forced to go back to the era of begging politicians and fans to raise money to honor continental matches.

The irony is that the betting industry does not only help sports in Kenya. According to the East African Herald, gaming industry contributed a whopping Ksh 10 billion to public revenues.

Investors’ nightmare

Kenya government is throwing away Ksh 10 billion by delaying license renewal for betting companies and the suspending their Pay Bill numbers. Yet year after year KRA has failed to meet it’s revenue targets, and now the taxman has resorted to desperate measures like frustrating investors like Keroche breweries owners in a bid to meet revenue targets.

If betting companies shun their activities in Kenya, things will surely get worst. Young people who were employed by the companies either directly or indirectly will lose their source of income, and since the government has no mechanism to give them jobs elsewhere the taxman will only get more desperate to meet revenue collection targets.

Already several manufacturing firms are moving their bases to Ethiopia where low cost of electricity is among incentives offered by the government to attract foreign investors.

Bad government policies continue to see Kenya lose business to Ethiopia, recently a report by Quartz Africa indicated that Ethiopia had risen to second position as a gateway into Africa, just behind South Africa. Ethiopia now commands a lead over Kenya when it comes to the share of passenger traffic and aircraft movement.