SportPesa and Betin close shop in Kenya over tax standoff

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Sports enthusiasts watch different games on screens while betting at a sports betting shop in July 15, 2019 in Nairobi. - Kenya's Betting Control and Licence Board announced sweeping restrictions in May 2019, on gambling advertisements, including outright bans on celebrity endorsements and social media promotions, in a blow to the fast-growing gambling industry in East Africa. (Photo by SIMON MAINA / AFP) (Photo credit should read SIMON MAINA/AFP/Getty Images)
A sports enthusiast holds a betting slip while different games are broadcast on screens at a sports betting shop in July 15, 2019 in Nairobi. – Kenya’s Betting Control and Licence Board announced sweeping restrictions in May 2019, on gambling advertisements, including outright bans on celebrity endorsements and social media promotions, in a blow to the fast-growing gambling industry in East Africa. (Photo by SIMON MAINA / AFP) (Photo credit should read SIMON MAINA/AFP/Getty Images)

Two betting firms in Kenya, SportPesa and Betin have finally thrown in the towel.

The two firms have halted their operations and are set to send home thousands of their employees after a prolonged tax standoff with the Kenyan government.

The betting firms, which control more than 60 per cent of the market share in Kenya, said separately they had resorted to take the action after the taxes slapped on the industry made the business no longer viable.

SportPesa, which had earlier indicated that it was coming back to business, now says it is disappointed with the decision by the Kenyan legislature to impose a 20 percent excise tax on all betting stakes.

“Further compounded by the currently in-effect 20 percent withholding tax on winnings, the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings,” the firm said in a statement

It argues that this will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya.

“Until such time that adequate taxation and non-hostile regulatory environment is returned, the SportPesa brand will halt operations in Kenya,” the firm said.

On its part, Betin has sent a notice of termination to all its staff on grounds that it has not been operational since July 2019.

“We hereby notify you that positions will be rendered redundant on 31st October 2019,” firm said.

With the shutdown of the two, more than 2,500 people who depend directly on the industry will be out of jobs in coming days as the government crackdown on the sector draws its first casualties.

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