Leading Kenyan betting firm SportPesa has pulled out of all local sports sponsorship with immediate effect after it lost a court case challenging the government’s decision to increase tax on gambling revenue from 7.5% to 35%.
The move will save the company about 600 million Kenyan shillings ($5.8m; £4.3m) annually, and help it stay afloat, CEO Ronald Karauri was quoted by the local Capital FM news site as saying.
The sponsorship cancellation will have a huge impact on local sports, affecting football giants Gor Mahia and AFC Leopards who are set to represent Kenya at the CAF Champions League and Confederations Cup respectively, the news site adds.
The Kenya Rugby Union said it was dismayed by SportPesa’s decision and it expected the government “to step into the breach and provide the necessary support” for its participation in global events, including the Commonwealth Games and the African qualifiers for the 2019 Rugby World Cup.
According to a survey published last March, Kenyans are the biggest gamblers in sub-Saharan Africa.
Three-quarters of 17- to 35-year-olds in Kenya surveyed admitted to having placed a bet.
Gambling on phone apps is easy, so many Kenyans regularly make payments through their mobile telephones.
The government increased the tax on sports betting sites last year, saying it was worried about the effects of gambling.
Last month, a court ruled that the tax served a “legitimate public interest”, throwing out a challenge by betting firms that argued that the tax was “excessive and unfair” .