After the closure of the most popular betting companies, Sportpesa and Betin, Kenyans are still betting as much as ever, but now with international betting giants like Bet365 instead.
Thanks to the recent Paypal-Mpesa partnership. Bettors can now load their Paypal accounts directly from Mpesa as well as withdraw their winnings from their Paypal account straight to their Mpesa accounts.
While this is a good thing for the Kenyan bettors, it is not for the government.
It means that it is losing out on the betting revenue to foreign countries that are hosting their betting sites. And we all know our government could really do with any extra revenue that they can lay their hands on.
It is estimated that the government will lose over Shs 15 billion annually if it does not resolve this tax menace. And this is not the only loss the government will experience. The sports industry is also on the losing end as there are no sponsorships meaning the government will have to chip in to support the industry or else it collapses.
The Sports betting giant, Sportspesa had made so many financial investments and commitments to Kenya’s sports industry that their unceremonious exit left a big gap that the government is struggling to fill. Simply because it does not have the financial muscle even if they were willing.
Aside from the Shs 15 billion tax revenue annually, there is also the Shs 120 million annual sponsorship funds to Gor Mahia and AFC Leopards, there is the Shs 450 million naming rights revenue among others.
Last year, the government lost Shs 1.3 billion worth of sponsorship meant for the boxing and football national teams. This really affected the boxing team that they were not able to perform as they usually do.
Asked why she lost her title to her long time rival Yamileth Mercado in the last World Boxing Super Bantamweight championships, Zarika Fatuma cited lack of preparedness and financial support from the government.
It seems the government forgot to step in where Sportpesa left the gap and more of these losses will be the norm unless something is done.
And the government is not the only losing team here. Safaricom’s Mpesa is also experiencing a dip in their revenue. Since the betting industry is largely an online business, it means that many players choose to deposit money on a betting site with M-Pesa. And now with the two giants out the transactions have reduced significantly for both mobile money platforms.
It is clear that all parties have suffered a heavy blow with the shutdown of the sports betting companies; the government being the biggest loser in all of this.
Now, with the COVID-19 pandemic, the sports betting industry has taken a low-lie since all leagues have been cancelled and the government also doesn’t have to spend on the sports industry currently.
We don’t know how long this pandemic is going to take. But we can only hope that once the dust settles, the government will consider revisiting their stern tax measures so as to give the betting companies a conducive financial environment to continue with their hustle.
We hope it has learned that they both need to co-exist for the better of each other. Ever heard of “scratch my back I scratch yours”? Yes, this is the type of relationship the government and the sports betting companies must have.