Kenya has moved to rein in betting companies in what has been described as an ‘increasing political opposition into the industry as a whole.’
The industry has been thriving in the country until the government in late 2017 embarked on different measures to control gambling.
Top on the onslaught has been Kenya Revenue Authority, Cabinet Secretary of Interior Dr Fred Matiang’i and Betting Control and Licensing Board (BCLB) which has either objected in the manner betting companies were operating or complained of tax evasion.
Dr Matiang’i made good his threat to deport foreign operatives of these betting companies by signing deportation letters of 17 workers of different companies on charges of working in Kenya illegally as well as evading taxes.
He said betting companies owe KRA huge sums of money in revenue and their presence in Kenya was making the situation worse.
“Poignantly, attempts to recover this amount have not been fruitful because the key industry operators have found refuge in judicial processes where all manner of court orders are sought and issued,” Matiang’i said
On 30 April 2019, Kenya’s Betting Control and Licensing Board (the “BCLB”) issued a notice detailing its plans to drastically curtail its licensees’ ability to advertise from 30 May 2019.
The planned restrictions impact on outdoor advertising of gambling, gambling adverts on social media, gambling adverts between 6am and 10pm and celebrity endorsement of gambling operations.
Equally, a move to have betting companies hold at least 20 per cent of earnings from winners of bets was pushed by KRA noting that betting companies owe the revenue collector over KShs20 Billion, a move that is being contested in court.
Now, UK based CellCast consulting has warned that its entire overseas operations will be affected by the latest move as its single client is a betting company based in Kenya.
In a statement, the company has noted that the impact of the new directive by BCLB on Cellcast’s overseas consulting services is not clear.
“Such restrictions, were they to be implemented, could impact Cellcast and the sustainability of its overseas consultancy revenues, as Cellcast provides services, with a focus on Kenya, to clients trading in this sector.”
In its 2018 annual report, the Company’s revenues for its overseas lottery and gaming consultancy services were impacted in 2018 due to the adverse effect of a new taxation rate on the business of the Company’s clients in Kenya.
This taxation rate was introduced as a result of the Kenyan government seeking to implement advertising restrictions on the gambling industry.
Moreover, a case filed in the Kenyan High Court arguing against the restrictions has led to the implementation of the planned restrictions being temporarily suspended pending the final determination of this court case.
The board of Cellcast will continue to monitor developments in Kenya and any notifications from the BCLB.
In the year ended December 31, 2018, the Company reported total revenues of £395,000 from its overseas consultancy services.
Further, the Company currently has a trade debtor from its Kenyan client, totalling £453,000.