Kenya\u2019s leading sports betting operators were back in court on Monday trying to get their suspended digital payment channels restored.<\/p>\n
On Monday, the High Court in Nairobi heard testimony from formerly Kenyan-licensed sports betting operatorsSportPesa<\/strong>,\u00a0Betin<\/strong>\u00a0and\u00a01xBet<\/strong>. The companies are seeking the restoration of their paybill numbers and SMS codes with online payment processors such as Airtel and Safaricom\u2019s MPesa that were\u00a0suspended in mid-July<\/strong>.<\/p>\n The payment processing channels were cut off on the order of Kenya\u2019s Ministry of Interior, which said the operators should be deprived of their payment options because their\u00a0gaming licenses had been suspended<\/strong>\u00a0on July 1 by the Betting Control and Licensing Board (BCLB). The BCLB was acting on the orders of the Kenya Revenue Authority (KRA), which has accused the betting operators of\u00a0owing hundreds of millions of dollars<\/strong>\u00a0in back taxes.<\/p>\n On Monday, the operators repeated their claims that the payment disruption was illegal, given that the High Court had issued a stay of the BCLB license suspensions.\u00a0The Nation<\/strong><\/em>\u00a0quoted a BCLB attorney countering that the court order had effectively renewed an expired license, and thus the suspended operators were required to re-apply for renewal, something the operators apparently have yet to do.<\/p>\n SportPesa\u2019s attorneys argued that the government\u2019s order to cut off its payments was a \u2018deliberate\u2019 move against SportPesa\u2019s business \u201cwith a view of shutting it down and giving an unfair advantage to its competitors.\u201d The Court will deliver its judgment on the betting operators\u2019 petition on September 19.<\/p>\n SportPesa didn\u2019t name any betting operators that may have benefited from the sudden lack of competition, but Embakasi East MP\u00a0Paul Ongili<\/strong>\u00a0has previously accused Interior Minister\u00a0Fred Matiang\u2019i<\/strong>of targeting SportPesa in order to benefit recent market entrant\u00a0BetLion<\/strong>, based on Ongili\u2019s unsubstantiated allegation that Matiang\u2019i has an undisclosed ownership stake in the company.<\/p>\n BETLION SIDES WITH GOVERNMENT ON WINNINGS TAX<\/strong> The 20% tax on winnings was suspended in 2016 but was reintroduced last year as part of the government\u2019s\u00a0<\/strong>new gambling legislation<\/strong>. However, the KRA says that the new law applies to all winnings, whereas the old law allowed gamblers to deduct their betting stakes from the amount won.<\/p>\n In 2014, a SportPesa punter\u00a0challenged the withholding tax<\/strong>\u00a0in court, and SportPesa was ordered to stop collecting the tax until the claim was resolved. The KRA has taken issue with this view, saying SportPesa was only barred from collecting the tax from this lone punter, and that the company remains on the hook for billions of Kenyan shillings in back taxes.<\/p>\n BetLion appears determined to publicly promote its continued ability to accept money from and pay money to Kenya\u2019s gamblers. On Sunday, the company paid out Ksh1m ($9,700) to a punter who correctly wagered a mere Ksh3,500 on a 13-game parlay. A BetLion exec said the company\u2019s \u201cnumber one priority \u2026 is to ensure whenever a bet is settled, our players receive their winnings.\u201d<\/p>\n SPORTPESA TO MAINTAIN SPORTS SPONSORSHIPS FOR NOW<\/strong> On Sunday, SportPesa CEO\u00a0Ronald Karauri<\/strong>\u00a0told\u00a0Nation Sport<\/strong>\u00a0<\/strong>that his group \u201cwill continue supporting\u201d the SportPesa Premier League (formerly the Kenya Premier League) as well as top teams AFC Leopards and Gor Mahia.<\/p>\n Leopards secretary-general\u00a0Oliver Sikuku<\/strong>\u00a0expressed relief at the news, given his admission that SportPesa \u201caccounts for 80% of our budget so we cannot do without it.\u201d Sikuku went on to express hope that the government will resolve its differences with the betting industry \u201cbecause this stalemate brings uncertainty.\u201d<\/p>\n
\n Speaking of BetLion, the company announced Sunday that it had started deducting 20% tax on its customers\u2019 winnings. BetLion, which was not among the operators whose licenses were suspended on July 1, said that it had \u201cdecided the most appropriate course of action is to apply [the tax] as per the KRA\u2019s view of the law.\u201d<\/p>\n
\n When the government last went toe-to-toe with its betting sector over tax rates, SportPesa played hardball by scrapping most of its\u00a0high-profile sports sponsorships<\/strong>. The sponsorships\u00a0were renewed<\/strong>, albeit at a lesser value, several months later after the government vowed to rethink its exorbitant gaming tax hikes.<\/p>\n