On August 9th 2016, the National Assembly shot down a motion that sought to form a committee to investigate sports betting in Kenya, showing reason beyond the uninformed decision by Hon. Jakoyo Midiwo and Hon. Aden Duale. The Gem legislator had alleged that the industry was enabling tax evasion and money laundering but during the debate he failed to table any evidence warranting the serious allegation.
Where countries celebrate and support investments that go regional or international, the move to seek to investigate betting in Kenya sought to stifle this noble initiative. It came about after SportPesa signed various lucrative agreements with English Premier League clubs Hull City, Arsenal and Southampton.
Earlier in the month, Ernst & Young released a report stating that in 2015, Kenya surpassed South Africa in terms of investing in other African countries. Kenya had 36 projects beating South Africa which had 33 projects. However, the volumes of investments were titled to the continent’s second largest economy.
The report added that
“Activity was largely concentrated in services, with financial and business services together accounting for nearly 78 percent of FDI projects originating from Kenya.”
This was a first for many proving to the world that Kenya is certainly the country to watch. The World Bank’s Ready Business report 2016 ranked Kenya 3rd most improved country in the world.
This is the kind of news that should excite Kenyans. It is not often that good deeds are said about how the entrepreneurial spirit is making a difference in people’s lives. But what the legislators wanted to do was contrary to well reasoning individuals who hold high office. The office they hold is only by trust, bestowed on them by citizens who hold the ultimate power.
Sportpesa holds a certificate of appreciation from the Kenya Revenue Authority (KRA) for being among the best tax payers in the country after an audit by the revenue authority. If indeed there were tax evasion and money laundering practices, the taxman could have raised an alarm, especially at a time when they are struggling to generate more revenues to fund development projects.
Money laundering is a serious crime in Kenya. The Proceeds of Crime and Anti-Money Laundering (Amendment) Act 2014 enshrine very stiff penalties for anyone involved in the vice. SportPesa would be setting up themselves for a big mess if they practiced the vice yet sponsor teams with the money they are doing because it would be easy for them to be detected and arrested.
Several Kenyan companies are facing financial challenges yet the legislators are not much concerned about taking to task individuals who bring down these entities. Uchumi, Kenya Airways and Mumias Sugar are some of the notable companies where mismanagement has led to millions of losses, denying innocent Kenyans jobs, slowing the economy and reducing tax revenues for government. That is somewhere noble legislators should focus.
Betting companies have never shied away from regulation. In fact, the Betting Control and Licensing Board (BCLB), the regulator of the gaming industry, suggested that government should do away with the withholding tax proposal introduced in the 205/16 budget and instead introduce a gaming levy which targets the gross revenue of an operator. National Treasury had imposed a 20 per cent withholding tax on betting but the implementation has never taken off.
Equally, BCLB issued a statement that Sportpesa is operating within its guidelines and is prompt on providing its monthly returns. It added that this is something other betting companies have not achieved.
There have been various reported incidences of suicide arising from people losing bets. Unfortunately the police have never confirmed these cases aiding the feeling that the scheme against sports betting companies is emerging with untrue reports, meant to hurt their investors. A recent follow up on a case reported on the Standard newspaper proved fake after villagers and policemen from the village where the incident apparently happened denied existence of such a case.
SportPesa has proved that betting can be lucrative when the investors unlock the how to do it best. Through its success, many other sports betting companies have sprung up in the past two years. Unfortunately, too few are giving back to society.
Kenyans are understandably not used to seeing companies investing heavily in social sectors of the economy. Indeed even when Safaricom has been consistently making record-breaking revenues, suspicions have always been raised. But no one actually wants to take time to find out how they are doing it, so that they can replicate the same in other sectors of the economy.
As a private company, SportPesa could have chosen not to invest in anything whether local or international but it appreciates that it will win when society also wins. This needs to be underlined, supported and encouraged not demonized. It is very easy for SportPesa to be a guinea pig for other private entities to choose not to bother about supporting social economic ventures like sports. Kenyans needs to stand on the right hand side of history.
I think some people are not happy to see monopoly being challenged. For years the legislature has been used to discourage investments and opportunities of competitors of those who fund their campaign. We should be careful and demystify the real intention of an MP fighting the success story of alternative sources of revenue to many unemployed youth and above all source or revenue to the government. Having said that, we should also be prudent to ensure that these companies do not also exploit their gullible audience.