Once the dear of the Kenyan sports betting industry, SportPesa is fighting the government on all sides in an attempt to restart operations and avoid paying an unjust back tax.
SportPesa Wins High Court Approval over License
Sports betting firm SportPesa has been playing a tug-of-war with authorities since it quit the regulated Kenyan market last year only to make a surprise return in late October. Welcomed by the community, SportPesa was suspended promptly, in fact just hours after the company tweeted that it had restarted operations.
The Betting Control and Licensing Board (BCLB) saw fit to block SportPesa over conflicting licenses. SportPesa now seems to be on its way to another revival with a High Court ruling backing up the sportsbook against the BCLB.
High Court Justice Pauline Nyamweya struck down BCLB’s ruling and allowed Milestone Game Limited to use the SportPesa trade name, ruling that there was no conflict of interests or confusion. Yet a series of regulatory moves have left the public nothing but confused.
BCLB Chairman Cyrus Maina objected that Milestones Games Limited had violated regulatory protocol and had no right to actually use the Paybills and short codes that are associated with SportPesa and its original owner, Pevans East Africa Limited.
Debating Back Tax and KSA’s Seizure of SportPesa Assets
In another High Court proceeding, Justice David Majanja restored access to frozen SportPesa accounts which were suspended, allowing Pevans to access the balance.
Pevans lost access to the accounts after Kenya Revenue Authority (KRA) stepped in to claim a disputed KSH14.3 billion in back tax, a controversial move that forced SportPesa’s exodus in the first place back in 2019.
Assets were withheld under the Tax Procedures Act (TRA) which the KRA opened on August 20, issuing notices to Pevans’ bankers, well within its legal right to do so when the tax agency suspects that tax has not been paid.
This caused issues with Paybills and till numbers, making it impossible for consumers to access funds or deposit on SportPesa even when the site temporarily returned.
The BCLB’s decision to suspend SportPesa hours after the website went back online only added to the confusion, making it difficult for the general public to follow what was happening.
How Did It Come to This?
SportPesa has been belligerent towards KRA’s attempts to open multiple proceedings and strong-arm the company into paying tax that SportPesa is legally not obliged to cover.
The latest revival attempt was carried out at the behest of SportPesa CEO Ronald Karauri who acquired 54.4 per cent in Milestone Games Limited and who tried bringing back the website online on October 30.
However, the BCLB insisted that the SportPesa trade mark cannot be used by Milestone, and the company’s managers, Wilson Karungaru and Bernard Chauro, were charged with misappropriation. The saga is ongoing and as court proceedings drag their feet, the community is getting restless with the potential return of SportPesa in Kenya.
While SportPesa may have dodged a bullet with the BCLB, at least temporarily, the company is now embroiled in another investigation. This time it’s the Financial Reporting Center (ERC) that is taking a shot at the brand, looking into transfers from the company’s account to offshore zones worth KSH30 billion.