One of the popular betting companies in Kenya Betsafe, has announced that it is shutting down its operations in Kenya rendering its employees in Kenya jobless.
In a memo, the company, which launched operations in Kenya in 2020, indicated that the move will be effective on May 14, 2024.
Further, Betsafe CEO Victor Sudi regretted that all the Kenyan employees will lose their jobs when the company exits the market on the grounds of excessive taxation.
Although the exact number of employees who will be left jobless was not disclosed, the company indicated that it would pay back punters their outstanding balances within seven days.
“We regret to inform you that Betsafe Kenya will cease its operations effective 14 May 2024. Outstanding player balances will be refunded via M-Pesa to the registered number within 7 days,” the company noted in a memo.
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Betsafe Launch and Partnerships
Betsafe launched in Kenya in December 2020 through Bet High Kenya, which is the Kenyan subsidiary of Betsson.
Since its launch, it has served thousands of users and signed major sponsorship deals worth Ksh270 million with Gor Mahia football club and AFC Leoprads football club.
However, in June 2022, the company terminated its partnership with one year left on the deal out of the three years agree upon. At the time, both clubs indicated that the betting company cited difficulties in business operations.
“It is true we have received a letter from Betsafe confirming the termination of their sponsorship with us. They have cited difficulties in their business operations which have been in existence since coronavirus hit the country two years ago,” AFC Leopards Chairman Dan Shikanda noted then.
AFC Leopards would then later announce that they had secured a new deal with Spotika.
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Finance Bill 2024 on Taxing Betting Companies
Betting firms are taxed on the gross gaming revenue at a rate of 15 percent aside from paying corporate tax of 30 percent on profits. Additionally, they pay income tax at the rate of 16 percent, adding to the annual licensing and compliance fees.
The finance Bill 2024 proposes an increase in the excise tax on betting stakes from 12.5 percent to 20 percent meaning that gamblers will pay Ksh20 for every Ksh100 staked, up from the current Ksh12.5.
Moreover, the law requires betting firms to deduct and remit withholding tax to the Kenya Revenue Authority (KRA) by the 20th of the following month.
The high taxation of betting institutions has led to the exit of other players including Betin.
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