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Betsafe exits Kenyan market amid high taxation

Betting firm Betsafe has pulled out of the Kenyan market as increased taxation continues to drive companies out of the multi-billion shilling industry.

Betsafe chief executive Victor Sudi said the company had ceased operations in the Kenyan market effective May 14, leaving its employees jobless.

The firm is the latest to pull out of the market, citing what it calls excessive taxation, which in the past has led to the closure of other players, including Betin. Betting companies are taxed at a rate of 15 per cent on gross gaming revenue, in addition to paying a corporate tax of 30 per cent on profits.

The companies are also required to pay income tax at a rate of 16 per cent, in addition to annual licensing and compliance fees.

A proposal was tabled in Parliament last year to make betting companies pay a gaming levy of 13 per cent of their gross gaming revenue.

“It is true that Betsafe Kenya will cease operations in the country with effect from May 14, 2024,” Mr Sudi told the Daily Nation in an earlier telephone interview.

Betsafe opened shop in Kenya in December 2020 through Bet High Kenya, the Kenyan subsidiary of Betsson.

Mr Sudi, however, did not disclose the number of Kenyans who have lost their jobs following Betsafe’s exit, but said customers with outstanding balances will be refunded their money within seven days.

Since 2019, the government has publicly declared war on betting companies through increased taxation in a bid to curb the runaway popularity of betting among the youth and unemployed.

Betin and SportPesa (then registered as Pevans East Africa) exited the Kenyan market five years ago amid clashes with the taxman over billions of shillings in unpaid taxes.

SportPesa has since returned after the trading name was acquired by a new company, Milestone Games Limited.

Pevans East Africa was the original user of the SportPesa brand, through which it pioneered betting in the country.

As well as targeting betting companies, the government has also targeted gamblers through taxes on bets and winnings.

The Kenya Revenue Authority (KRA) takes 12.5 per cent of every bet placed, in addition to a 20 per cent withholding tax on every winning bet.

There is also a proposal in the Finance Bill, 2024 to increase the tax on betting stakes to 20 per cent as the government seeks to reduce the appeal of betting.

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