SportPesa have officially cancelled all local sports sponsorship following the implementation of the 35 percent taxation by the government.
SportPesa CEO Ronald Karauri said on Tuesday their withdrawal move was to ensure that they stay afloat and sustain their operations in the Kenyan market.
Noting that the withdrawal would immediately take effect, Karauri confirmed they have written to all sports teams and federation that they support.
He observed that they would save Sh600m annually as a result of their sponsorship withdrawal.
The pullout will have immense impact on Gor Mahia and AFC Leopards who are set to represent the country at the CAF Champions League and Confederations Cup respectively.
The clubs had threatened that they will pull out of the competition due to financial constraints.
Further, the latest development will affect the Kenya Rugby Union dealing a big blow to the Kenya Sevens side and the Kenya Simbas.
KRU has regretted the Sportpesa pullout.
“The KRU has received with great dismay the cancellation of its partnership with SportPesa,” KRU explained on Tuesday morning.
“The cancellation of this contract forces us to completely reexamine our structures and we immediately call upon the government to step into the breach and provide the necessary support as guided by the Sports Act,” KRU added.
Reports indicated that Gor Mahia FC chairman Ambrose Rachier said the club will withdraw from their continental assignments due to Sportpesa (their main sponsor) sports sponsorships cuts.
Betting companies lost a case against the government after they moved to court with the aim of stopping the betting tax increase from 15 to 35 percent as enshrined in the Finance Act 2017.
Judge John Mativo ruled against their plea in late December.
“I find and hold that the new taxes do not infringe on the petitioners’ rights to property since they are aimed at serving a legitimate public interest. The legislation was legally enacted and it overrides the legitimate expectations of the betting firms,” justice Mativo ruled.