Reprieve For Gamblers As Sportpesa Complies With Court Order Stopping 12.5% Deduction On Bets

• Justice Patrick Otieno directed that the contested tax should not be collected until the application filed by Edward Okwama is heard and determined
• Sportpesa has already committed to comply with the conservatory orders issued by Justice Patrick Otieno
• Edward Okwama particularly took issue with the blanket deduction imposed on all bets, regardless of whether the punter wins or loses

Nairobi - Gamblers can now heave a sigh of relief after the High Court stopped Kenya Revenue Authority (KRA) and betting firm Sportpesa from deducting 12.5% excise duty on bets.

SportPesa has already committed to comply with the conservatory orders issued by Justice Patrick Otieno following a petition filed by betting enthusiast Edward Okwama.

Justice Otieno directed that the contested tax should not be collected until the application filed by Okwama, is heard and determined.

SportPesa, which is at the centre of the legal battle alongside KRA, has welcomed the court’s decision and stopped with immediate effect the imposition of the new tax on clients’ bets.

What is Okwama’s argument?

The petitioner argued that the new tax law was unfair, unjust, and unrealistic on all fronts.

Okwama particularly took issue with the blanket deduction imposed on all bets, regardless of whether the punter wins or loses.

He argues that this approach does not align with the principles of good taxation and should be reversed.

The petitioner submitted that the tax should only apply when a punter wins and gets some extra money, not immediately after placing their bet.

"The problematic effect of this provision is that the 12.5% excise duty is levied on the applicant and other sports betting fans and players when they place a bet or play, notwithstanding if they win or lose their money," Okwama asserts.

Why the double taxation

He also accused the government of applying double standards in tax collection.

He questioned why the government is demanding excise duty on bets when the same principle does not apply to other sectors.

Okwama further argued that the new tax leads to double taxation since gamblers also face a 20% withholding tax on their winnings.

Justice Otieno ordered the petitioner to serve the betting firms, KRA, and the Attorney General within 14 days.

The case is scheduled to be mentioned on September 21, and it promises to reshape the betting landscape in Kenya.

The court's decision, coupled with SportPesa's proactive response, has set the stage for a transformation in the betting industry.

Who's the new millionaire in town

The outcome of this legal battle will have far-reaching implications, affecting not only the taxation of bets but also the overall dynamics of sports betting in Kenya.

In a related story, TUKO.co.ke reported that Seth Mokua, a native of Kisii county, was unveiled as the winner of SportPesa's mid-week jackpot.

KSh 24.6 million was up for grabs for correct predictions of the 13 football matches played.

The bonanza was played between August 30 and 31.

SportPesa would then announce on Friday, September 1, that a winner had been found.