Local sports entities are already struggling to remain afloat barely a week after SportPesa walked out on long-term sponsorship deals valued at about Sh600 million annually.
Affected entities include Football Kenya Federation, Kenya Rugby Union, Boxing Association of Kenya, plus football clubs Gor Mahia, AFC Leopards, Nakuru All Stars, and famed boxer Fatuma Zarika.
The row arises from increased taxation by the government aimed at ‘discouraging gambling’. The law took effect at the start of this year.
Initially, SportPesa unsuccessfully challenged it in court. The law, which was signed by President Uhuru Kenyatta in June last year, raises the tax rate on gambling to 35 per cent of gross profits.
When the legal route failed, SportPesa retaliated by closing taps on all financial arrangements that primarily benefit athletes and coaches.
And as the deadlock rages, Gor Mahia’s management has put on hold plans for its first team to attend a 10-day high-altitude training outside the country.
BUDGET
With Sh60 million hole in their annual budget which would otherwise have been plugged by the gaming firm, the Kenya Premier League champions have settled to train in Nairobi.
It could get worse. Club chairman Ambrose Rachier said he does not know how monthly salaries for the players and technical bench, valued at Sh3.5 million, alongside other expenses, will be offset.
It’s also unclear as to whether K’Ogalo will honour its international engagements this season.
The club has been drawn against little known Equatorial Guinea side Leones Vegetarinos in the preliminaries of the Caf Africa Champions League and the management had earlier stated their ambition of making it to the group stages, where as much as Sh250 million awaits the overall winner in December.
Failure to participate in the competition attracts a ban, alongside a hefty fine of at least Sh1 million.
AFC LEOPARDS
AFC Leopards, the other popular football club bankrolled by SportPesa to the tune of Sh45 million each year, have cancelled a trip to Zambia for pre-season.
The team was primed to compete in a four-team tournament involving Zambian side Napsa Stars and Power Dynamos, alongside Zimabwbe outfit Chicken Inn.
Leopards chairman Dan Mule said the club cannot pay players’ salaries or meet other needs.
“I signed several quality footballers from Ghana and Nigeria in December with full knowledge that SportPesa will help us pay their salaries. I don’t know what to tell them,” said Mr Mule.
He hinted that the club could pull out of the Caf Confederation Cup, giving Malagasy outfit FOSA FC a walkover to the next stage.
Meanwhile, the Boxing Associarion of Kenya said its players will not be adequately prepared for the Commonwealth Games due to lack of funds.
SEVENS TEAM
The Kenya Rugby Union as well has announced that the national Sevens team may not compete at the IRB Sevens circuit tournament or 15s World Cup qualifiers for lack of sponsorship.
Majority Leader Aden Duale supported the tax, noting Kenya is among the countries with the lowest gambling tax rates in the world. He noted Germany charges 90 per cent, France and Australia (80 per cent), and Denmark 75 per cent.
Murang’a Senator Irungu Kang’ata dared SportPesa to cease operations in the country if the firm feels pushed to the wall.
Kang’ata wondered how a Kenyan company can manage to sponsor an English Premier League team and then argue that it has no money to support local teams.
SportPesa has separate deals with English clubs Everton and Hull City, plus South African outfit Hull City, alongside Tanzanian bigwigs Simba and Yanga, all valued at billions of shillings.
Former Sports CS Hassan Wario had indicated that the government would directly be funding all sports activities going forward.
SportPesa CEO Ronald Karauri has however maintained that the pullout is not meant to arm twist government.