Category Archives: Gambling

Sports Betting – Part IV: Gambling Companies Protest Kenya tax

Today brought some shocking news that, following the passage into law of the 2017 Kenya Finance Bill, in which the President had amended an increase in the tax on gambling to 35% tax, in place of an earlier 50% one proposed at Parliament, Sportpesa, the apparent industry leader of sports betting and gambling would be ending all its local sponsorships.

Sportpesa has a sizeable local sports sponsorship portfolio, supporting several local sports ventures; In rugby (the Kenya Rugby Union, Kenya Harlequins), and in soccer (Kenya’s premier league, a Super 8 tournament, Football Kenya company, as well as individual teams of Gor Mahia, AFC Leopards, Football Kenya, Nakuru All Stars).

Sportpesa started operating in Tanzania just two months ago, but recently hosted a soccer tournament in Tanzania featuring top Kenyan and Tanzania teams, which was won by Gor Mahia, earning them a pre-season match with Everton, the English premier league team, on July 13 in Dar-es-Salaam.

The strong-arm tactics of Sportpesa look similar to ones tried by Kenyan banks before the President went ahead and signed an interest capping bill into law that the banks had strongly opposed. The effects they warned about now seem to becoming true with reduced lending to businesses, and liquidity in the economy.

The sports betting and gambling companies push back also comes at a time when Kenyan sports face myriad issues like doping allegations, an ineffectual sports minister and fatigue and funding cutbacks by other large sports sponsors including Multichoice (DStv), EABL, KCB and Safaricom over management issues with different sports associations and teams. While gambling companies like Sportpesa had stepped up, the sports’ funding sources now appear in limbo.

Investor Motivated Terrorism

There have been two recent attacks which have looked like they were motivated by terrorists, but which now appear to have been linked to investors with issues or seeking gains

There was the deadly attack in Manila, Philippines on a casino and shopping complex that’s now attributed to a heavily indebted Filipino (a, former finance department employee who owed more than $80,000, and had sold off some property) who was hooked on gambling (his family had even asked casinos in the capital to ban him) …authorities released security footage showing Carlos casually exiting a taxi just after midnight and walking calmly into a vast entertainment and gambling complex like any other visitor. Shortly afterward, he dons a black ski mask, slips on an ammunition vest and pulls an M4 carbine assault rifle out of his backpack…at least 37 patrons and employees died, mostly from smoke inhalation as they tried to hide

But more shocking was the bus attack back in April on the team bus of a German soccer team.

  • In what seems like a plot from a James Bond movie, police arrested a man on suspicion he attacked the bus of German soccer team Borussia Dortmund GmbH last week as part of a scheme to profit from a slump in the club’s share price.
  • The man stayed in the same hotel as the soccer team, with a room overlooking the site of the attack. He bought put options online via the IP address of the hotel, the prosecutor’s office said. The options grant their owner the right to sell shares at a fixed price in the future. The man had taken out a loan to finance the transaction, according to the statement.
  • On the day of the April 11 attack in the team’s home city, he bought 15,000 options on Borussia Dortmund shares, betting they would drop sharply after the attack. (On the day of the attack, 15,000 equity-covered put options were traded at 18 cents a piece at 11:16 a.m. in Frankfurt, about 8 hours before the bombs went off. The options, issued by DZ Bank AG and due to expire on June 16, give the right to sell Borussia Dortmund shares at 5.20 euros. The shares closed at 5.61 euros that afternoon, shortly before the attack took place, and fell as low as 5.50 euros the next day. The stock hasn’t traded below 5.20 euros since February. DZ Bank declined to comment. The suspect bought three types of derivatives, with the suspicious trades leading authorities to the man)
  • The man later placed three bombs in a hedge on the road that the team bus was due to take to the stadium, prosecutors said. The explosives contained metal pins, which after the explosion were found as far as 250 meters (275 yards) away. One pin was found in a head-rest of one the bus seats, the authorities said.
  • “A massive share drop would have had to be expected, had a player been gravely injured or even killed as the result of the attack,” the prosecutor’s office said. Police are still calculating what the maximum profit could have been had the plot gone as planned, she said.
  • Borussia Dortmund said in a statement that it hopes all details of the plot will be cleared up in order to help the team, one of the few to be publicly traded, cope with the trauma caused by the incident.

Here in Kenya, we don’t have many mass attacks linked to such, but there are numerous stories of people who have taken their lives after gambling losses.

Kenya Tax Changes in 2017

Tax changes that become effective on January 1, 2017, as a result of the finance bill signed  by the president on 13 September 2016

  • PAYE brackets have been expanded by 10% and the relief also increased by 10%. (now Kshs 15,360)
  • VAT on service charge has been removed, provided that the service charge does not exceed 10% of the price of the service
  • A taxpayer can apply for a refund of overpaid tax within a period of 5 years from the date which the tax was paid. Any amount not refunded within 2 years will accrue interest rate of 1% per month.
  • Withholding tax on winnings from betting and gaming has now been abolished and replaced by a betting tax of 7.5% on the gaming revenue,  lottery tax at 5% on the lottery turnover, a gaming tax at 12% on gaming revenue and a prize competition tax at 15% on the cost of entry to a competition

Extracts from a report by the Grant Thornton Kenya team.

Sports Betting Comes of Age in Kenya – Part III

SportPesa Goes Global

Today brought the shock news that SportPesa would be sponsoring Hull City, a team playing in the English premier league, in what officials called the most lucrative in the Club’s proud 112-year history.

Pic from SportPesa twitter page

Pic from SportPesa twitter page

SportPesa bills itself as Africa’s number one sports betting platform and has signed several deals in the last year in Kenya including sponsoring two top teams – Gor Mahia and AFC Leopards , the top soccer league, and (just last week)  added another sponsorship to the Kenya Rugby Union for Kshs 607 million (~$6 million) over five years.

The FT notes of the deal that:  “..highligh(s) both the global popularity of the English Premier League and the exponential rise of mobile gambling across east Africa’s largest economy.. the SportPesa platform will now be available in the United Kingdom and later in the year present in several African countries..”

Read more on SportPesa and other online sports betting firms in Kenya.

EDIT:  two days later, another EPL team, Southampton FC announced that SportPesa  would be their official betting partner in a multi-million pound three-year deal.

EDIT:  In a newspaper statement, on July 31, Sportpesa said that the Hull sponsorship is £3 million per year, which is based on revenue projections from international business.

£1 = Kshs 133, $1 = Kshs 101

Sports Betting Comes of Age in Kenya – Part II

$1 = ~Kshs 100

Looking at the terms and conditions of the sports betting companies listed in part I

Betin

  • Betin Kenya is part of the GoldBet Group, one of Europe’s largest and most successful betting and gaming Operators, and Gamcode Ltd trading as Betin Kenya is a company incorporated in Kenya while Konicom Ltd is owned by Gamcode Ltd and provides payment and SMS solutions for Betin Kenya.
  • The service is of a personal nature, and is to be used purely for personal entertainment. Any commercial and professional interest is discarded
  • All winnings are subject to taxes that Betin will withhold and pay on your behalf
  • You’re only allowed one account (if they find multiple they will close you out)
  • The minimum bet is Kshs 50, the maximum is 500,000
  • The maximum payout is Kshs 10 million on any ticket
  • Has betting rules and opportunities for American football (bet over/under, missed field goals), athletics (can bet on winners or which countries will place on a podium), baseball, basketball (bet against the spread, highest scoring quarter) , boxing, golf, horse racing, motor sports (who will be on pole, who will have the fastest lap, who will be the first retiree, if the safety car will be deployed) , soccer (predict outcome of each half, total goals scored, next goal, penalties, yellow/red cards issued, clean sheets, own goals)
  • Customer service/complaints should be sent by email to info@betin.co.ke.. the complaint shall be assigned to an advisor (..and offensive or rude language, as well as malicious or damaging comments, will not be tolerated while contacting our staff..this will result in a suspension of an account)

Betway

  • Jambo Marketing Limited t/a Betway is licensed and regulated through the Betting Control and Licensing Board of Kenya
  • The minimum bet is Kshs 50, and the maximum win per bet slip is Kshs 450,000
  • The  maximum daily winning is Kshs 900,000 (or Kshs 1,800,000 per week)
  • Only one  account allowed
  • If you use a credit/debit card and/or a financial/bank account for transactions at Betway, the account/cardholder’s name MUST be the same as the name you used when registering a Betway account.
  • You must prove identify through other documentation within a month
  • No transfers between  individual accounts
  • You must provide ID before you can withdraw from any account, and withdrawals may be spread over several days if large. They will verify any withdrawal over Kshs 200,000
  • If you win more than 5X your lifetime deposits you are capped at Kshs 400,000 per week
  • Don’t allow arbitrage and money laundering or people to play in a professional capacity, or in tandem with other customers as part of a group, or place bets in a coordinated manner with other customers involving the same selections
  • You are solely responsible for any applicable taxes on any prizes and/or winnings
  • Other examples of irregular betting include, but are not limited to, placing single bets equal to or in excess of, 30% or more of the value of the bonus credited to your account before the wagering requirements for that bonus have been met.
  • With soccer, you can bet on goal scorers, correct scores, corners, yellow cards etc.
  • Can view your statements for 30 days to see bet history

Mcheza App

  • Operated by Acumen Communications Ltd (trading as MCheza)
  • We may have to contact You and ask You to provide further information to us directly in order to complete the Checks. For this purpose, we will be entitled, at our sole discretion, to require that You provide us with a notarised ID, proof of address, utility bills, bank details, bank statements and bank references. Until such information has been supplied to our satisfaction we may prevent any activity
  • Funds are deposited for bets only. Should you attempt to withdraw funds that were deposited but not used for wagering, the Company may levy a processing fee of 10% upon such withdrawals.
  • No maximum withdrawal per day but amounts more than Kshs 100,000 may require special arrangements
  • To the extent required by your local law or tax or other authorities, you are responsible for reporting your winnings and losses
  • You agree to not in any way treat the Company as a financial institution. This includes using the Company as an intermediary to transfer funds, unused or used, from one source to another one with or without ill intentions as well as using the Company as a currency exchange bureau
  • The Company may actively monitor traffic to and from the access devices, website and all other media/electronic platforms. The Company reserves the right to block access where evidence indicative of automated or robotic activity is found
  • You can bet on football (match winners, over / under, goal scored, scorers, penalties, cards, corners) basketball (most 3 pointers), tennis, baseball, American football, boxing (method of win, and round the fight ends), cricket, (top bowler, top batsman, partnership, dismissal method), golf, rugby, motor sports (pole , winner, retirements)

BetYetu

  • Operated by Oxygen8 East Africa Ltd (O8 Betting)
  • Kenyan mobile phone number (+254) is your customer identity
  • The minimum withdrawal is zero, and there is no maximum (but this will be limited to mobile money company thresholds)
  • You can bet on soccer (UEFA champions league, ) basketball, tennis

SportPesa

  • SportPesa is a trading name of Pevans E.A. Ltd
  •  You agree to not in any way treat the Company as a financial institution. This includes using the Company as an intermediary to transfer funds, unused or used, from one source to another one with or without ill intentions
  • Your Username must be your registered telephone (mobile) number
  • The Company prohibits and takes measures to prohibit use of devices, such as robots, computers that distort normal and fair game play. Should the use of such electronic added devices be discovered, the Company will disqualify such player(s), close all such accounts and confiscate all funds and earnings due to such accounts
  • The minimum bet Kshs 100, and the maximum Kshs 20,000
  • A maximum bet single win is capped at Kshs 200,000 and multi-bet is  Kshs 1 million (and max per person is 1.5 million per day)
  • You can bet on boxing, basketball, tennis, rugby