The bombshell in which SportPesa withdrew sponsorship for football and rugby will not invite litigations as it has been purely attributed to the government’s unprecedented decision to increase tax on gaming companies.
Despite what would ordinarily pass as a breach of contract by SportPesa, most entities affected by the move said the move by the government is bound to have far-reaching implications given that they were solely dependent on the betting firm which recently infiltrated the Tanzanian market.
In a nutshell, the beneficiaries of the multimillion sponsorship by SportPesa categorically pointed out that they have no grounds to institute legal proceedings against their financiers as they were issued with a notice indicating the impending withdrawal of sponsorship in June 2017 immediately after the tax was passed into law by parliament.
Sports lawyer Edward Rombo, who is also Kenya’s rugby legend, said while the withdrawal was a big blow to football and rugby, the decision was within the rights of SportPesa, arguing that he was made to understand there were certain ending clauses to necessitate such a move.
“Some of the reasons include application of a tax hike on betting companies which are untenable in their businesses, as well as low fan turn out,’’ said Rombo even as he pointed out that the decision by government was ill-advised.
He added: “Rugby and football are bound to suffer a death knell as they were direct beneficiaries of direct sponsorship by SportPesa which is why the government ought to have rethought its stand.’’ Boxing Association of Kenya (BAK) President John Kameta paid tribute to SportPesa for the period they have facilitated the body including the running of the local leagues, adding that the threat of withdrawing the rugby team from the 2010 Commonwealth Games in Goldcoast was for real due to lack of funds.
“What some of us are facing is dire and unless the government relaxes its rules we are in trouble. We are talking of operations grinding to a halt,’’ said Kameta. The boxing chief made the comments during which time the country;s top football teas AFC Leopards and Gor Mahia are contemplating pulling out of their respective continental assignments due to the withdrawal of sponsorshuip. Leopards chairman Dan Mule describes the latest decision as a sad epitaph and noted that they cannot blame SportPesa since the company was in business and is bound to suffer due to the implementation of the new tax law by the government.
“This was a sponsorship that we were getting with no strings attached and I’m saddened that the government has played a role in its withdrawal. We are contemplating seeking for help from the same government to support us in our continental assignment and if it does not come, we’ll have no choice but pull out, said Mule.