The Kenyan government is facing a backlash from the betting industry over its decision to suspend the payment platforms of 27 betting firms.
Last week, Interior CS Fred Matiang’i, through the Betting Control and Licensing Board (BCLB), directed a number of mobile money service providers in Kenya to withdraw SMS codes and pay bill numbers for some certain companies, including Betway, SportPesa and Betin.
Top telcos Safaricom, Telkom Keny and Airtel were ordered to stop accepting deposits in their mobile wallets in the wake of the directive. Regional police commanders were also ordered to arrest owners of unlicensed betting firms.
In a letter to the telcos dated July 10, 2019, the board said these firms have failed to meet outstanding renewal requirements and will be put under the microscope to determine whether or not they are fit and proper to hold a license. A probe by a multi-agency team found that the firms in question failed to adhere to tax laws.
To make things more difficult for betting operators, the gaming regulator sent out a warning to Kenyan gamblers and asked them to withdraw their winnings within 48 hours or risk losing their money.
Betting Firms Hit Back
Responding to the directive, two of the 27 firms affected have assured customers their money is safe. SportPesa and Betin expressed their disappointment at the government’s action.
As a result of the suspension order, the betting companies involved have to make a crucial decision as 12 million betting accounts are now left in limbo, some of which still have money in them. SportPesa and Betin have since secured a court order to continue operating and they are hoping for an amicable solution so they can get back on track. Both companies said they are currently in talks with relevant authorities, including the Kenya Revenue Authority (KRA), as to how they can resume their services.
Operating permits for 19 gambling firms have not been renewed by the BCLB and eight others have been postponed as part an industry revamp. Hundreds of jobs are currently at risk as the government continues to crackdown on erring operators. Industry sources say some of the firms hit by the directive are now considering laying off staff as early as next week.
In a statement, SportPesa said the board’s abrupt measures directed at the gambling industry would only serve to discourage and disrupt business. The firm also defended its operations, saying they’re running their business in line with gambling rules and regulations, and in accordance with tax laws and legal requirements in Kenya.
SportPesa also cited their contribution to the total development of the country’s sports sector. SportPesa CEO Ronal Karuri said the company has made a positive impact across a wide range of sporting activities, such as boxing, football and rugby. The betting firm has also been supportive of several community and environmental initiatives throughout the years, pouring in investments in environment protection, water access, as well as uplifting the skills of the youth.
Amicable Solution
SportPesa went on to say that they’re committed to holding discussions with all major sector players to arrive at a solution that will bring two-way benefits both for the industry and the government. The company is set to talk with government officials on certain measures that would complement their development agenda and would provide a sustainable environment for business. But Jean Kiarie, SportPesa’s director of communications said the imposition of tax will not solve a social problem.
Kiarie said an all-inclusive approach from stakeholders and the gambling regulator is needed to iron out issues. The current stringent measures implemented by the government will only drive business away and make room for more illegal activity. Among the government’s measures is imposing a 20 percent withholding tax to betting money, something Kiarie said will hurt bettors as they now will have to shell out more money.
Betin Kenya shares the same sentiments. In a separate statement, the company said they’ve been fully compliant with laws since they started operating five years ago. The firm also emphasized its contribution to jobs creation, saying they’ve generated livelihoods for 2,500 youth in an industry that generates Sh 200 billion in annual sales.
Betin Kenya said the current stance taken by the government will force the online gaming industry to go underground, attracting unregulated off-shore operators and paving the way for more crime. The company said it will challenge the government’s latest actions and will negotiate with other players to come up with an amicable solution.

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