2 | National News Wednesday, July 1, 2020 | DAILY NATION Gambling > There has been a quiet change in the shareholding of SportPesa over last 14 months, with a Kenyan businessman acquiring a stake Sports betting fi rms set for comeback after tax Uhuru has assented to law removing 20 per cent excise duty on bets staked, but Matiang’i warns all the fi rms won’t get licence renewals BY LIONEL FAULL fi rst time in May 2019, shortly lionel@fi nanceuncovered.org before a government clampdown AND PAUL WAFULA on the betting industry began. [email protected] He’s now also a director of Pevans, which has previously he government appears to disclosed that it amassed Sh20 have reversed its stand on billion in revenues and gener- Tsports betting, with the ated gross profi ts of Sh9 billion removal of a tax that saw most in 2018. companies exit the country. The second stake is a 0.5 per A proposal to drop the 20 per cent shareholding in SportPesa cent excise duty on bets staked Global Holdings Limited (UK) — is contained in an amendment to a company that owns SportPesa’s the Finance Bill that President non-Kenyan betting companies Kenyatta signed yesterday. in Tanzania, South Africa, Italy At the same time, the Nation and Russia. has learnt that there has been a It also owns a highly profi ta- quiet change in the shareholding ble UK business, SPS Sportsoft of betting giant SportPesa, which Ltd, which provides IT services exited Kenya last year during the to SportPesa sister companies, tax controversy. including Pevans in Kenya. Details buried in corporate filings in Kenya, the United Notorious tax haven Kingdom and the Isle of Man Mr Muiruri acquired the stake reveal that businessman Peter last November. SportPesa Global Kihanya Muiruri has over the Holdings made a profi t after tax past 14 months acquired stakes of almost £12m (Sh1.6 billion) in in three companies that are part 2018, according to its fi nancial of SportPesa’s international statements. gambling empire. The third is a three per cent FILE | NATION The Nation, working with UK- stake in SportPesa Holdings Bandari Football Club Captain Felly Mulumba leads teammates in celebrating winning the Sportpesa Shield on June 2, 2019, after beating based journalism organisation, Limited (Isle of Man). This is an Kariobangi Sharks 3-1 in the fi nals at Moi International Sports Centre, Kasarani, Nairobi. Sport betting fi rms seek to return after shelving of tax Finance Uncovered, accessed o shore company that receives demands slapped on them last year. documents fi led by SportPesa SportPesa’s revenues from bets companies in Kenya, the UK and staked in the UK. Companies the Isle of Man, a tax haven o based in the Isle of Man, a small is unclear, because up-to-date a number of leading gambling holder and founder is Bulgarian (Sh1.26 billion) a year shirt the coast of Britain. British Crown dependency and fi nancial information for these fi rms closed shop in Kenya. national Guerassim Nikolov, and sponsorship with English top- The documents show Mr notorious tax haven in the Irish companies is not available. It is The tax was introduced to not other betting fi rms, re-enter the tier football side Everton FC. Muiruri is a shareholder in three Sea, do not have to publicly also unknown at this stage how only stem rampant gambling Kenyan market and revive the Yesterday, Interior Cabinet companies linked to SportPesa. disclose their accounts, so no much, if anything, Mr Muiruri addiction in Kenya, but to also wider gambling industry. Secretary Fred Matiang’i, who The first is a one per cent fi nancial information is available. paid for the shares. raise revenue from what had SportPesa did not respond to was last year at the forefront stake in Pevans East Africa, the Mr Muiruri acquired the stake After the government intro- rapidly become a highly lucrative our emailed inquiry on the same of holding the betting fi rms to company that owns SportPesa in last December. duced taxes on bets placed by business. and did not take our o er for account, said the government Kenya. Mr Muiruri appeared on The value of Mr Muiruri’s punters and aggressively pursued Dropping the tax could see a physical or virtual interview had not changed its position on the shareholder register for the shares in the three companies gambling firms for payment, SportPesa, whose biggest share- with any of its o cials. It asked sports betting. for an extension of 24 hours to He said, most of the compa- respond to the questions, but nies, which had applied to have had not honoured this promise their licences reinstated, were a day later. yet to meet the set conditions. Among the questions we “Before you start talking about wanted answered was whether the tax on winnings, have any of it has, indeed, replaced its chair- these companies complied with man, Mr Paul Wanderi Ndung’u, the registration criteria? The in a boardroom shake-up and if government is on course towards it has met all the requirements ending the gambling menace in to get back its licence. this country. Some of those fi rms We also wanted to know if it you are saying will never operate had lobbied the President either in Kenya because they have not directly or indirectly for the re- met the set standards,” he said. instatement of its licence or any The 20 per cent duty was tax reductions. We also asked introduced as recently as last the fi rm to disclose how much November, according to the Mr Muiruri paid for his shares Kenya Revenue Authority. in each of the three companies, Reversing any betting tax was when he became a director in not on the cards two months Pevans, the value of his shares ago, when the Departmental in each entity and whether he Committee on Finance and Na- had received dividends since tional Planning, chaired by Mr acquiring these shares. Joseph K. Limo, published the There is, however, no sugges- Finance Bill for public comment tion of wrongdoing either by Mr on May 8. At this stage, the Bill Muiruri or SportPesa. contained no plans to tinker with SportPesa lost its betting any betting taxes. licence last July before it an- Committee meeting minutes nounced it was withdrawing show that an obscure stakeholder from Kenya last September in group — identified only by a response to what it called “the non-existent URL as shade.co.ke hostile taxation and operating — wrote to the committee on environment in the country”. May 15, proposing the scrapping Their withdrawal led to 400 of the 20 per cent excise duty on job losses and cancellation of its bets placed. “It has made many local sports sponsorships. betting firms cash-strapped, In February, SportPesa also hence cutting down on their withdrew from its international sponsorships to local sports sponsorship commitments, in- clubs,” the group said. cluding a reported £9.6 million The committee agreed, noting .