Betting firms facing suspension have assured their customers that their money is safe.
Led by SportPesa and Betin Kenya, the firms, in separate statements, said they are in discussions with the Interior ministry and the Kenya Revenue Authority to find an amicable solution to the current impasse.
Earlier in the week, Interior CS Fred Matiang’i, through the gambling regulator, directed Safaricom to suspend M-Pesa pay bills and SMS short codes for 27 betting firms. The Betting Control and Licensing Board said the 27 firms had yet to meet undisclosed licensing requirements and were being vetted to establish if they are fit to hold gambling permits.
The board directed firms’ customers to withdraw their money within 48 hours, raising fears that many would lose their source of revenue. The government had declined to renew operating permits for 19 gambling firms and deferred eight others in a shake-up of an industry that generates more than Sh200 billion in annual sales.
The directive, which affects 12 million betting accounts, has left the betting firms at crossroads because some of the accounts have money and firms such as SportPesa and Betin have secured orders to continue operating.
The firms accused the government of acting illegally in dealing with the issue, saying they have been operating aboveboard.
But the board said licence renewals will depend on operations and directors of the firms getting a clean bill of health in an ongoing security vetting process.
Despite the goings-on, Sportpesa remains hopeful that through the court order they obtained, an amicable solution will be found soon to allow them to resume services.
“SportPesa has been fully compliant with all tax and legal requirements in Kenya. Our business has uniquely and consistently boosted sports development in the country and we have never wavered in our support to the investment in the community,” CEO Ronald Karuri said in the statement.
“This is amply demonstrated by the positive impact we have made across a wide range of sporting activities, including football, boxing, rugby and the investments we have made in community programmes such as water access, initiatives in environment protection and in uplifting skills of the youth.”
Karuri said the firm is completely dedicated to dialogue with all relevant sector players, with the aim of coming up with a mutually beneficial solution that will complement government’s development agenda, and provide a stable business environment.
Earlier in an exclusive interview with the Star, the firm’s director of communications Jean Kiarie said trying to solve a social problem by imposing taxes is not a solution.
“This challenge requires an all-inclusive approach from the industry regulator and stakeholders. We must all talk and come up with measures that are accommodative to all stakeholders because such strictness being displayed will make room for more illegalities in the sector,” she said.
Kiarie said the firm’s main contention has been the imposition of a 20 per cent withholding tax to betting money, a situation she said will harm gamers as they will have to pay more than they ought to.
“Withholding tax element of 20 per cent was essentially placed on the winning money and not the stake. We are not against paying taxes but cannot allow a situation where innocent Kenyans are subjected to more taxes, yet they have already paid the same in other forms.”
On the firm’s course of action if the suspension is upheld, Kiarie said they will “cross that bridge when the time comes” but added that they hope things will work out for the benefit of all players.
She said SportPesa has yet to understand the motivation behind the suspension.
“There must be a distinction between the formal and informal business. This is not just about SportPesa but things to do with the entire industry. What we want stakeholders to understand is that in every business, there is a percentage of those who would want to abuse the sector and there are those who may be doing wrong, but there needs to be fairness even in how the matters are reported,” Kiarie said.
Similar sentiments were made by Betin Kenya, which said it has complied fully with state regulations since its entrance into the Kenyan market five years ago.
“Betin Kenya would like to express its disappointment in the recent actions taken by the Betting Control and Licensing Board with respect to blocking our payment system and would like to reassure all our customers that their deposits are safe,” the firm said in a statement.
It said it has paid all taxes in line with the Betting and Gaming Act and the Income Tax Act and have a valid compliance certificate. Highlighting its significance in jobs creation, the firm said it has employed 2,500 youths whose livelihoods are now at stake given the action taken by the government.
“These actions, if not carefully and quickly reconsidered, will serve to drive out companies, such as us, who are good corporate citizens. Instead, the gaming industry will go underground, increasing illegal and underage participation, money laundering, criminality and unregulated off-shore operators claiming the market,” the statement read.
Betin said it will challenge the decision and engage all sector players with a view to finding a solution in the near future.
This came as President Uhuru Kenyatta urged the firms to stop complaining and wasting time in courts, and instead comply with the laid-down procedures.
He said on Saturday that gambling firms are obligated to pay tax and must not be platforms for children.
“We want to get that money so our children can use it in sports and culture. Gambling is not for children … Some money should be given to the government,” Uhuru said in Kirinyaga.