Just like almost every other country all over the world, Kenya is experiencing some of the major changes and challenges in society as well as in the economy, because of the over coronavirus and the global pandemic. No one is having it easy, and neither is Kenya. Though the countries can not afford to be in stagnation mode for very long. 

Despite the very challenging period of time and many issues to be tackled, Kenya has made a decision to make certain steps towards economic recovery. Although the number of cases of COVID-19 infected patients is still increasing, and some people might find this decision unacceptable, the government officials and authorities have made it clear that the country's economy has to move. 

With this being said, it should be mentioned that one of the biggest industries in Kenya, with the majority of the population being involved in gambling and betting. Those are two major activities for Kenyans. For a long period already people were not allowed to place bets on their favored sports activities, though it was announced last week that Kenyan punters will be able to participate in the betting process with sports betting operator SportPesa once again. 

Photo by Yonko Kilasi on Unsplash

The effect on the industry 

This has been especially good news for the operators as well as for the punters. One of the biggest betting operators SportPesa exited the local market back in 2019, because of the loans and debts which were on the side of the county. Though, after a long period of negotiations and certain new regulations the betting operator is back on the market. 

The news was official via the official page of the ke.SportPesa.com. A similar attempt to bring the betting operator back to the market was one month ago, though unsuccessfully. This time it is real, despite the many roadblocks. 

The prolonged tax dispute between the betting Reparto and Kenya Revenue Authority, KRA, led to the suspension of its license by the Betting Control & Licensing Board (BCLB). SportPesa’s return came via a new BCLDB licensee, Milestone Games Ltd, which is majority controlled by SportPesa CEO Ronald Karauri.

The dispute has been going for a long time already, and the last hearing is noted for the 25th of January. Before that the SportPesa/Milestone's reboot is qualified as a withdrawn application from the court, as a stay of execution. 

Taxes and Ohs 

The final word is still to be said, but it has been official that the authority and the betting operator agreed on paying the taxes in 18 installments, for 18 months. Pevans reportedly offered to repay its reported arrears of Ksh15.1b (US$137.4m) at a rate of Ksh838m per month. 

The taxes are still one of the most discussed issues among the online casinos in Kenya with Mpesa. This is because of the fact that many online casinos and betting operators consider the 20% tax on the winning to be very high. Both the punters as well as operators are on common ground on this point. 

The betting winnings are one of the biggest disputes, which need to be accepted or changed. The government has imposed a 20% tax on the winning. The government said that the winnings include the repayment of the punter's original stake, which both sides view as a tax on betting turnover. SportPesa has the same opinion regarding the taxes imposed by the government. The operator was only allowed to come back to the market, only after agreeing on the terms and definition of the governmental "winnings". Despite the winnings and its definition, the local authorities have sent the mixed signals on how they plan to change the tax regulations in the future. 

The official Twitter page of SpotPesa responds to the tax regulations with the following statement: “It’s 20% of your net winnings as per the law. We give to Caesar what’s his.”

The Ministry involvement 

While the global pandemic is still ongoing it is still important to consider the economic state of the people and bettors, who will be willing to spend their money on betting. Though, despite this fact, Kenya's National Assembly Committee on Sports, Culture, and Tourism rejected the Interior Ministry's bid to minimize money laundering by seizing cash in dormant betting accounts. 

The ministry proposed changes in the gambling legislation. The changes included freezing accounts that have been inactive for three consecutive months. The recovery of the accounts would only have been possible once providing the official statement of the income and the funds. Only after which the withdrawal could be applied. 

The Committee rejected the proposal, noting that it would infringe on the turf of the country’s Unclaimed Financial Assets Authority (UFAA). Yet, some of the changes in order to at least promote responsible gambling among Kenyans were implemented. The changes such as increased minimum deposit amount. Previously the eligible for the betting amount was Ksh50, while from now on, it shall be Ksh100. This will prevent especially poor parts of society from placing their bets. For violating these rules, both the operator and the punter will have fines and may be sentenced to up to 6 years in prison.