Sports and gaming company SportPesa has announced that it will withdraw all sponsorship meant for clubs and federations starting January 1, 2018.
The company's CEO Ronald Karauri asked all stakeholders to plan accordingly as the drastic step needed to be taken due to the recent increase in tax on betting.
"As @SportPesa we will be giving notice to clubs and unions that from January 1 we will withdraw all sponsorships.
With the new bill coming into effect on January 1st, 2018 we want our sports partners to plan accordingly," he tweeted.
Karauri added, "Our cost of doing business as a company will be greatly affected hence we have to consider the impact on operating besides partnerships."
Recently, President Uhuru Kenyatta signed into law a bill that will impose a tax of 35% of gross profits on all forms of gambling.
Until now, lotteries were being taxed at 5%, betting firms - bookmakers - at 7.5%, casino gambling at 12% and competitions like raffles at 15%.
Treasury Cabinet Secretary Henry Rotich had originally proposed raising the tax rate to 50%, saying the rapid growth of on-line gambling hurt the young and vulnerable, and the proceeds from the tax would fund sports, culture and the arts.
SportPesa is the official shirt sponsor of top clubs in the Kenya Premier League - Gor Mahia and AFC Leopards - and also supports National Super League side, Nakuru All Stars.
They also sponsor the Kenyan Premier League which has 18-teams and Football Kenya Federation (FKF).
Sports lovers greatly appreciated the efforts of the betting firm in improving the quality of sports in Kenya and the company's announcement may dampen spirits of all those who foresaw a new dawn for the country's sports sector.
