It is official that sports betting companies that are currently operational are now complying with the withholding taxes to be levied on winnings.The government stands to gain a whopping 20% of any winnings made through sports betting.This accounts for a hefty contribution to KRA’s annual tax collection targets assuming there are wins.
According to an article done on Citizen TV website the current shortfall from the lack of remittance of withholding tax by the sports betting companies has greatly contributed to a shortfall in collections against KRA collection targets.
So what does this mean for sportpesa mega jackpot as well as shabiki power 13 jackpot?
Sportpesa mega jackpot regularly has weekly bonus winners who win between KES 3000 and KES 12,000,000 when one achieves over 12 correct predictions out of the 17 games offered.
If you take an average bonus at KES 50,000 it means that the government would stand to gain on average KES 10,000 for a majority of the bonus wins and if Abisai or Ogada who both won over KES 200 Million had been met with the taxman then their winnings would have shrunk by approximately KES 40 Million.
If we drill further and work with the numbers shared by sportpesa where they collect in excess of KES 20B a year from their customers and we assume that winners account for even 10% of that revenue then the government stands to gain in excess of KES 400 Million from sportpesa alone annually.
Shabiki power 13 jackpot currently offers a guaranteed walk away of KES 10 Million every week meaning they stand to benefit the government with KES 4 Million every week,KES 16 Million every Month and KES 192 Million every year from their Jackpot alone.And with Shabiki now introducing a mid-week jackpot as well the taxman will be all smiles with a KES 384 Million contribution from a single company.
Extrapolate that across the industry and the government stands to gain extensively hence the current ongoing battles between the government and the betting industry.There are approximately 33 online sports betting firms in Kenya and this small group is a very easy avenue for the taxman to collect a very large chunk of change.
Now that the government is taxing us further what should be our expectations?
The betting industry and specifically sportpesa have made great contributions towards the sports community with their large sponsorships of football and rugby in Kenya.This has alleviated a large burden from the government who have enjoyed a fantastic growth in sports with honestly mediocre support to the sports community.
This withholding tax collections should be solely geared towards growing our sports community with investments starting from sports infrastructures in schools to creating an environment where sports as a profession is viable.We cannot fight this tax but we can hold this government that appears to have a tendency to misplace Billions of OUR Shillings consistently accountable.