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SportPesa, Betin halt operations in Kenya over tax impasse

Betting firms SportPesa and Betin have halted operations in the country. The two betting firms said they had resorted to take the action after the high taxes slapped on the industry made the business no longer viable.

SportPesa said it was disappointed with the decision by the Kenyan Parliament to impose a 20% tax on all betting stakes.

The tax is based on a fundamental misunderstanding by the Rotich-led treasury of how revenue generation works in the bookmaker industry. This decision will have a damaging impact on both customers and treasury,” the firm said in a statement.

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 added.

According to a report by Nation, the betting firm said it would only consider resuming operations in the country if non-hostile regulatory environment is returned.

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

Management has had several extensive meetings with relevant government entities regarding the company’s licence renewal without much success,” the firm explains in a memo to its staff.

In view of the above, we have had financial constraints as you might all expect. As a result of the deterioration of the profitability, the management has had to rethink its operational model and to proceed with the exercise of termination on account of redundancy,” it added.

The exit of the two betting companies which control over 50% stake in the betting sector will have dire ramifications with thousands of people expected to lose their jobs.

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