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Economy

SportPesa sues State for betting losses

Sportpesa CEO Ronald Karauri at a past event.
Sportpesa CEO Ronald Karauri at a past event. FILE PHOTO | NMG 

SportPesa has sued seeking compensation for the days it has been out of business after the government ordered Safaricom #ticker:SCOM to stop processing payments for sports betting companies.

The betting firm and its rival Betin Kenya say the July 12 switch-off of its M-Pesa pay bills and SMS short codes are illegal because they both have court orders allowing them to continue operating despite being denied licences by the State.

Both firms want the suspension of their payment systems lifted and the chairman and top executives of Betting Control and Licensing Board (BCLB) jailed or fined for ordering the switch-off despite the court order.

They also want the court to quash a notice issued by BCLB to Safaricom that disabled their SMS short codes and M-Pesa paybills.

The two firms, which are among the biggest in the sector, were among 27 firms whose betting licences had not been renewed, pending the outcome of an inquiry on suitability to operate. The gaming companies largely rely on Safaricom’s network to take bets, communicate with users and process payments through paybills.

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“Honourable court be pleased to award the petitioner damages for the lost business and breach of fundamental rights,” SportPesa petitioned the court.

The firm said it was denied a licence because of tax demands for the period between May 2014 and March 2019, arguing that the court had stopped the demands and allowed it to continue operating pending the conclusion of the suit.

The High Court had also suspended the decision by BCLB to withdraw Betin Kenya’s licence, prompting the betting firm to push for punishment of the regulator for disobeying the judges.

On Tuesday, High Court judge Weldon Korir declined the betting firms’ plea for bosses at BCLB punished for contempt of court.

Instead, he ordered that the betting board together with mobile communication operators Safaricom and Airtel to be allowed time to respond to the case before any punishment is arrived at.

“The order to unfreeze paybill numbers will amount to determining the contempt application without giving a hearing to the betting board; I will therefore not issue any of the orders sought, it’s only just that BCLB, Safaricom and Airtel are given time to respond,” said Justice Korir.

Sports betting companies’ combined revenue hit Sh204 billion last year.

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