SportPesa in regulatory limbo as Kenyan Judiciary’s rejects Pevans re-licencing appeal

By | March 23, 2021

SportPesa continues to operate without legal certainty in its home market of Kenya, following the Kenyan Judiciary’s rejection of an appeal made by ‘Pevans East Africa’ to reinstate its gambling licence.

On Friday, Kenya’s Court of Appeal rejected Pevans injunction against its licence suspension imposed by the Betting Control and Licensing Board (BCLB) in July 2019.

Pevans the former operating company of SportPesa,  had stated that BCLB had unfairly suspended its licence in relation to its ongoing high-profile tax dispute with the Kenya Revenue Authority (KRA) – deemed as an illegal enforcement as Pevans continues to legally challenge KRA’s tax demand of KSH 15 billion (€100m) on player winnings for the period of 2015-2018.

Kenya’s Judiciary upheld a 2019 judgement made by Justice John Mativo, which stated that BCLB held the right to suspend Pevans on the grounds that the company had failed to maintain its tax discipline – a core business demand which would require intervention by any industry regulator. 

Fighting its tax dispute with the KRA, Pevans had withdrawn from its operating contract of SportPesa in July 2019.

Following a year under suspension, SportPesa returned to the Kenyan betting market in October 2019 as existing shareholders acquired the licence of Milestone Games Limited to relaunch the brand.

However, the BCLB would quickly move to suspend Milestone’s licence, citing that company shareholders who were under investigation had violated its rules to secure a new licence.

Milestone and BCLB would enter a new legal battle, in which Nairobi courts have allowed SportPesa a temporary discharge to operate its online gambling services.

Furthermore, Kenyan news sources report of an ownership dispute between Pevans shareholders and Milestone in relation to the SportPesa brand as former shareholders maintain that the relaunch of the SportPesa brand was not authorised by the Pevans board.  

Meanwhile, the KRA is reported to have revised its tax demand on SportPesa, in which it claims that the company – irrespective of ownership – must now make a commitment of KSH 95 billion (€700m) to settle its outstanding tax liability in order to re-enter the market.