The multinational club of millionaires behind SportPesa

A club of local and international investors spanning three continents is behind the mobile phone-based sports betting platform SportPesa, whose fame touched a new peak with Monday’s signing of a £10 million (Sh1.321 billion) sponsorship deal with the English Premier League team Hull City.

In the club of deep-pocketed millionaires, whose ability to mint money has more than quadrupled with SportPesa’s runaway success, are an ex-Kenya Airways pilot, a shrewd Nairobi businessman, a female veteran of the gambling industry, three Bulgarians and an American businessman.

Former chairman of the Kenya Airline Pilots Association (KAPA) Ronald Karauri, businessman Paul Wanderi Ndung’u and Asenath Wachera Maina, the brains behind the controversial ‘Shinda Smart’ lottery, are the principal owners of SportPesa, the Business Daily can reveal.

Three investors from Bulgaria — Guerassim Nikolov of the ill-fated Toto 6/49 lottery, Valentina Nikolaeva Mineva and Ivan Kalpakchiev — as well as American businessman Gene Grand are also in the list of top shareholders of Pevans East Africa, the entity behind SportPesa.

Two other Kenyans, Francis Waweru Kiarie and Robert Kenneth Wanyoike Macharia, also have minority stakes in the betting firm, according to regulatory filings at the registrar of companies. Mr Karauri currently serves as the chief executive officer of SportPesa. 

Mr Nikolov’s Toto 6/49 lottery closed shop in 2011 under the weight of debts having operated in the market for about two years.

SportPesa grabbed global attention this week when it became Kenya’s first company to sponsor a football team in the UK’s lucrative topflight premier league, and topped it up with a betting deal with Southampton FC — the club Harambee Stars captain Victor Wanyama played for until his transfer to Totenham Hotspurs last month.

The three-year deal will see SportPesa’s name and logo on Hull City’s shirts when the next season begins in August.

SportPesa’s sponsorship deal with Hull adds to a string of funding it has doled out to other sports entities at home including Kenya Rugby Union (Sh607 million), Kenyan Premier League (Sh450 million), Gor Mahia (Sh325 million) and AFC Leopards (Sh225 million).

Arsenal Football Club in February signed a partnership deal with SportPesa seeking to grow its fan base in Kenya by offering locals exclusive bets and offerings such as merchandise and tickets.

READ: Arsenal bets on gambling company SportPesa to grow fan base in Kenya

Another notable player on Kenya’s betting industry is former Citizen TV presenter Julie Gichuru, who is a director at Acumen Communications, the owner and operator of mCHEZA, a sports betting platform.

Kenya’s mobile phone-based sports betting industry has experienced phenomenal growth in the past couple of years, aided by the ease of placing bets online or through SMS and paying via mobile money platforms such as M-Pesa and Airtel Money.

READ: Gambling firm Sportpesa inks deal with Airtel to grow users

There are now more than a dozen sports gambling platforms in Kenya, including Betway — the official sponsor of another English Premier League side, West Ham United —   EliteBet, Betin, JustBet, Bet365, BetYetu, eazibet, Lucky2u, 256Bet, Royal Kenya Bets, and go-bet.

Kenya’s gambling, gaming and lotteries sector is regulated by the Betting Control and Licensing Board. Both Mr Karauri and Mr Nikolov refused to comment on this story and declined to disclose how much money their company, SportPesa, makes from its runaway success in sports gambling.

SportPesa grosses a daily average of one million users placing bets averaging Sh100, besides the 300,000 gamblers who play the jackpot daily, said a source who cannot be named because she is not authorised to speak for the company.

Mr Karauri owns a six per cent stake in Pevans East Africa, the holding company, while Mr Nikolov has a 21 per cent shareholding.

The son of former Tigania MP Mathew Adams Karauri worked at Kenya Airways for more than a decade where he rose to the rank of captain. He left the troubled airline mid last year to try his hand in the world of betting.

Mr Ndung’u, who has a 17 per cent stake in SportPesa, is a major player at the Nairobi Securities Exchange, where he holds significant stakes in multiple firms.

The list of companies where he has shareholding includes KenGen (0.28 per cent), Kenya Re (2.3 million shares worth Sh45 million) and distressed retailer Uchumi where he holds 18.8 million shares currently valued at Sh57 million.

Besides the Nairobi bourse, the businessman recently expanded his interests in private equity, with the buyout of agriculture and hospitality equipment company G-North & Son from the Philip Ndegwa family.

Ms Wacera Maina, associated with the ‘Shinda Smart Sh90 million in 90 days’ betting craze of June 2010, owns 21 per cent of SportPesa through her firm Flint (EA). Gene Grand, an American businessman, has a 21 per cent interest in the multi-billion shilling betting company.

Ms Maina’s company, Flint, was both the lottery licence holder and premium rate service provider for the short code 6969.

A subsequent lottery dubbed ‘Shinda Smart 6969’ ended up in court after Flint (EA) Ltd fell out with its partner, Interactive Gaming & Lotteries, on how to share the Sh139.1 million collected in two months before the government banned the raffle.

Documents filed in court showed that more than 2.1 million text messages charged Sh69 per SMS were sent to ‘Shinda Smart 6969’ — highlighting the lucrative nature of Kenya’s lotto industry.

Interactive Gaming & Lotteries was entitled to Sh38.33 per SMS, Flint (EA) earned Sh2 per message as short code processor, while the remainder was shared between Safaricom and government taxes, the court ruled.

Businessmen Javed Iqbal Abdul Rahman, Adil Ali Bashir and Ahmed Talib Abubakar are the owners of Interactive Gaming & Lotteries.

SportPesa also acts as an agent for another lotto dubbed Pambazuka, which was unveiled last month.

Pambazuka national lottery is owned by Bradley Ltd, which was also entangled in the ‘Shinda Smart 6969’ court case.