Summary of the 2019 Game Year in Africa
The news of the African gaming market was not particularly encouraging or shocking during 2019.
Phumelela Gaming and Leisure Ltd of South Africa had the worst results in its history. In Uganda, the government was studying a possible nationalization of gaming operations, after announcing that it will not renew the gaming licenses currently in the hands of international operators.
The Kenyan market was greatly affected by the government’s decisions during 2019, due to its particular interpretation of the law for the taxation of “gambling winnings” and advertising restrictions.
The problems began when the leading market operator SportPesa received a government bill of 103 million dollars, which finally increased to 147 million with the addition of fines and interest. The Kenyan government argued that these were withholding taxes not paid by the company on player profits.
From there a real legal battle began and the discussion around the 20% tax that was established. The discussion is whether the income tax applies only to the winnings without counting the payment of the bet or also includes the amount of the bet.
27 betting operators were suspended by the government, claiming they owed a total of 586 million dollars among all. Then it decided to suspend the local payment processors serving the operators. The president of Kenya has refused and warned that it could even ban gambling altogether if operators do not pay.
The two largest companies, SportPesa and Betin harassed had to close their operations in the country and lay off most of their staff. Although the courts ruled in favor of the companies, the government remains in its position.
Apparently the government is in favor of establishing a state monopoly of games, as recommended by a report. In 2020, this mystery will surely be cleared up and it will be known if all the mess of the Kenyan government in relation to taxes was nothing more than a ruse to keep the whole business.