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Crisis in sports industry as Sportpesa withdraws

Kenyan sporting industry is in crisis after Sportpesa withdrew their sponsorship to clubs and federations in the country. The betting giants SportPesa Chief Executive Officer Ronald Karauri officially announced the withdrawal of all their sponsorship on Tuesday, in a move that plunged the Kenyan sporting industry into crisis.

This is after the private equity firm lost a case last week in the country’s High Court challenging the implementation of a 35 percent Government tax on revenue that came in force on Monday.

“Unfortunately, we lost the case and effective immediately and we regret this decision, we have no choice but to cancel all sponsorships we have as SportPesa,” Karauri announced confirming fears that have been circulating since Thursday when the court ruled against the firm.

 

Sportpesa sponsors Kenya Premier League Champions Gor Mahia, Gotv Sgield Champions AFC Leopards, Nakuru AllStars, Kenya Harlequins (Rugby) are the other teams lost their main sponsors on Tuesday.

World Boxing Council women’s Super-bantamweight champion, Fatuma Zarika, local rally driver, Leonardo Varese and a number of grass-root tournaments are others affected by the drastic move.

Federations include Football Kenya Federation, Kenya Rugby Union (KRU) and the Boxing Association of Kenya (BAK).

SportPesa was also catering for the bulk of the pay for newly hired national football team head coach, Belgian Paul Put and Technical Director, Andreas Spiers from Germany.

The Kenyan Premier League (football), National Boxing League as well as the annual Super 8 grassroots football tournament are the domestic competitions that will be affected by the move.

“The cancellation of this contract forces us to completely re-examine our structures and we immediately call upon the government to step into the breach and provide the necessary support as guided by the Sports Act.

Our 2018 calendar includes the Rugby Africa Championships for our U20s in April, Lionesses participation at the HSBC Women’s Sevens World Series qualifiers in Hong Kong and as well as the Commonwealth Games, and the Women’s Africa  Cup 7s in September,” KRU added in a statement.

 

“This tax is on revenue before we pay the other tax, SportPesa we are here to stay and we will try to be efficient and unfortunately, we have to drop sponsorships,” Karauri emphasised.

He welcomed the Government proposal of establishing a Sports Lottery to fund federations, teams and individual athletes but said it would not be enough to cater for the industry’s needs.

“The lottery has changed sports in the UK, but at the end of the day, if you do not have a private sector to support it cannot work. The private sector and Government have a role to play and we need to come together,” the SportPesa CEO remarked.

Karauri who is also the Association of Gaming Operators in Kenya, called on President Uhuru Kenyatta to initiate dialogue to resolve the standoff pledging SportPesa would make a swift return to sports if an amicable solution is found.

“No one has called me to come and talk, request the President to sit down with me as the chairman of the AGOK so that we come to a solution.  I remain optimistic but our attempts at dialogue have not been fruitful.

“We will appeal the case since it was grounded on equity and fairness in taxation. You can only be optimistic for so long, we cannot shoulder the burden and keep our employees and business running. We will be very limited in what we can do,” the CEO noted.

Additional information Sportpesa media

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