Kenyan Football Clubs Slam Proposed 20% Betting Tax
Two of Kenya’s biggest football clubs have slammed the proposed re-introduction of a betting tax in the country. The clubs warn that the “ill-timed” move could put national leagues in serious financial trouble.
The reintroduction of a 20% withholding tax would render clubs unable to operate and would be “unstainable”, claim AFC Leopards and current champions Gor Mahia, who play in the Kenyan Premier League.
The two rival clubs released a joint statement in which the two chairmen of the teams attacked the tax, which is due to be introduced by the Kenyan National Assembly in its 2021/2021. The amendments to the budget change Kenya’s Excise Duty Act to include a 20% tax on bets wagered.
Part of the statement read: “The enactment of this law will render all clubs currently supported and sponsored by various betting firms unable to continue with their operations,”
The tax is not a new tax; it was first introduced in Kenya in 2019/2020. However, after a parliamentary vote in June 2020, the tax was scrapped in response to operators leaving the country. SportPesa and Betin were among those who withdrew from the Kenyan market in protest over the tax.
Despite this vote, industry insiders reported that a month later, rumours began circulating that the Kenyan government planned to re-introduce the tax towards the end of 2020; this was delayed due to the Covid-19 pandemic. The Kenyan government and sports betting companies that operate in the country have not enjoyed the best relationships. Over the last two years, the government has suspended several operator’s licences over disagreements regarding unpaid tax.
This proposed reintroduction of the tax has dragged the Kenyan Premier League into the argument, which benefits greatly from the betting industry. In the four years between 2016 and 2020, more than £8.5m has been pumped into the league. Much of this trickles down to the clubs, including Gor Mahiaand AFC Leopards.
The joint statement continued: “Sponsorships have kept clubs and ostensibly the football league itself in operation and aided in the development of players and clubs,”
“This is true for other sports that benefit from similar sponsorships. After a fan-less season due to the Covid-19 pandemic, our clubs have been largely dependent on the support by our sponsorship partners. “We are not out of the woods yet with an unpredictable future and no foreseeable projected return to full stadia,” the clubs wrote.
The two clubs have a long history of commercial agreements with betting companies. SportPesa had been involved with both Gor Mahia and AFC Leopards. The company also sponsored the Kenyan Premier League. However, SportPesa later cancelled the arrangement with the league, citing pressure from the government to cancel the deal.
Betsafe, a brand in the Betson Group, now sponsors both clubs as part of a three-year deal, and the clubs have called on the government to scrap the tax in the “extremely challenging” times. The clubs believe that sponsors will withdraw from these existing sponsorship deals if the tax does come into effect.
The statement continues: “It will certainly be an own-goal on Kenyan football as it would disrupt if not force a suspension of the second half of the season,”.
“This would also adversely affect the much-anticipated 2022 season, which was supposed to mark the grand restart of our fully-fledged top-flight football in Kenya.
“This is not the first time the excise tax is being proposed for adoption into law, and the wisdom that prevailed in the suspension of the act previously, given the projected impact on the sports sector, needs to prevail yet again,” the clubs concluded.