By Owain Flanders
SportPesa has halted operations in Kenya after the government imposed a new 20% excise tax on all betting stakes.
The operator said this tax is based on "a fundamental misunderstanding by the [Henry] Rotich-led treasury of how revenue generation works in the bookmaker industry."
SportPesa believes this new tax, in addition to the withholding tax on winnings re-introduced last year, will remove any economic incentive to place bets as customers will not receive their total winnings.
The Betting Control and Licensing Board (BCLB) in Kenya suspended SportPesa’s license in July in relation to unpaid withholding tax.
The dispute centred around whether SportPesa and 26 other operators were withholding 20% of customers’ winnings in accordance with new regulations.
Although SportPesa's suspension was ultimately lifted, earlier this month the BCLB insisted the operator would have to apply for a new sports betting license if it wished to re-enter the market.
Following the introduction of this additional excise tax, SportPesa has ceased all attempts to continue operations in the country "until such a time adequate taxation and non-hostile regulatory environment is returned."
Gambling Insider has contacted SportPesa for comment.