Kenya-based international sports betting provider Sportpesa has shut down operations in its home market and lashed out at the government for its hostile attitude towards the industry.

The Kenya shutdown follows the introduction of a 20 per cent excise tax on all betting stakes in the country, which the company said will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya.

Sportpesa added that the new 20 per cent tax on stakes demonstrates a fundamental misunderstanding by the Kenyan treasury of how boomaking works.

“The entire betting industry saw Sh200 billion in stakes placed in 2018, but gross gambling revenues were only Sh20 billion from those stakes,” a Sportpesa spokesperson explained.

“The new tax will demand 20 per cent of the Sh200 billion figure, making the industry’s tax bill Sh40 billion for this measure, double that of actual revenues. This is in addition to the 20 per cent paid to winning customers, 15 per cent tax on GGR and 35 per cent corporation tax.”

The company describes the Kenyan sports betting market as over-taxed and unfair and warns that the current operating environment will drive businesses in Kenya underground.

“For customers, the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings,” the spokesperson said.

“This will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya.”

“Until such time that adequate taxation and non-hostile regulatory environment is returned, the SportPesa brand will halt operations in Kenya,” the spokesperson concluded, adding that it will have no impact on its international operations or global sponsorship agreements.

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