The implementation of a directive by the betting regulator appeared to falter yesterday even as betting firms cried foul, saying their businesses were being unfairly targeted by the very government that issued them with licences to operate.
This follows the suspension of the operations of 27 betting companies by BCLB throwing a spanner into the works of an industry estimated to have achieved a combined revenue of Sh200 billion in 2018.
Even after ordering telecommunication companies to withdraw paybill numbers and shortcodes used by the betting companies whose licences were suspended, some gaming companies revealed that gamers could still deposit and withdraw money in their betting wallets and place bets.
The High Court has issued an order that allows SportPesa and Betin to continue operations uninterrupted until the matter is resolved and Safaricom said in a statement that it would need further guidance to close the Pay Bill numbers because two betting firms – SportPesa and Betin – had secured court injunctions over the matter. They also said that closing pay bills would be going against the law as such a decision would mean individuals with money in betting wallets would not have access to their money.
KRA had raised concerns that gaming firms have not been remitting taxes commensurate with the amount of profits they have been making. SportPesa maintained that they are a law-abiding corporate citizen that upholds all tax and regulatory requirements.
If implemented, the directive by BCLB will cripple the operations of the betting companies in the multi-billion-shilling industry with SportPesa even poking holes into claims that betting firms were raking in Sh200 billion against tax remittances of Sh4 billion, asserting the figures are exaggerated.
BCLB had also banned the outdoor advertisement of gambling on all social media platforms, advertising gambling in between 6 am and 10 pm and endorsement of gambling operations by celebrities.
High Court recently quashed that directive by BCLB. The ruling said that the order was taken in a manner inconsistent with the constitution and statutory requirements.
There are over 12.5 million betting wallets in Kenya as almost all betting is done exclusively through mobile phone transactions, that stand to be affected by the directive if implemented. It is not clear how much the wallet accounts hold but it is also estimated to run into tens of billions of shillings.
Also if the new directive is implemented, thousands of betting shop owners and operators where gamers go to claim their wins are going to lose alot.
On the other hand, the government stands to lose tax revenues with sports sponsorship deals suffering cancellations as they are mainly facilitated by the main betting companies.