Gamblers have 48 hours to withdraw their money from betting companies or lose it, as the government intensifies its radical shutdown of the Sh200-billion-a-year industry.
In response to a plea by leading telecommunication firm Safaricom to give gamers time to withdraw the money in their mobile wallets, the Betting Control and Licensing Board (BCLB) Thursday granted the firms a 48-hour window before shutting their paybills.
“This is to permit you to allow gamers of the subject firms to withdraw any funds they may have deposited in the material period within 48 hours from the date hereof and duly notify them of the same, quoting this letter as authority,” wrote Mr Liti Wambua, the board’s acting director, in a letter dated July 11, 2019.
Safaricom had asked the board to allow gamblers time to withdraw their money from their mobile wallets before complying with the directive.
The firm says the directive will affect over 12 million customers, and that blocking them would expose the company to legal action.
It is not clear how much the paybill accounts hold in gamers’ deposits, but the Nation understands that the figure could run into hundreds of millions of shillings.
In another move that shows its determination to stop betting companies, the betting board has roped in commercial banks and the communication sector regulator in its ongoing crackdown.
“The Betting Control and Licensing Board has not renewed operating licences for the period of July 1, 2019 to June 30, 2020 for firms appearing in the list attached,” Mr Wambua wrote to the Communications Authority of Kenya.
“This is to request you, as the communications sector regulator, to duly withdraw the content service provider licences issued to the firms.”
The Nation has learnt that commercial banks have also been asked to follow through with the crackdown that will make it hard for betting firms to get their billions of shillings out of the country.
It is not yet clear why the government has resorted to such a drastic action against the betting firms since taxation matters have traditionally been resolved by a tribunal or taken to court.
However, it is understood that the directive was approved by the National Security Council, which is looking at other threats gaming and gambling might pose to the nation, among them money laundering.
By last evening, the paybill numbers and short codes of all the 27 companies which the government had ordered mobile companies to shut down were still in operation. The Nation successfully deposited money into the accounts, meaning that telcos were yet to effect the government order.
It also emerged that a majority of the companies whose licences have not been renewed had not been told by the BCLB before the Tuesday announcement that they faced suspension. They learnt of their fate when the Nation published the list on Tuesday.
Mozzartbet, one of the companies affected by the government’s move, came out to defend itself, saying it had paid all its taxes to the last cent and had been declared compliant.
“For the avoidance of doubt, Mozzartbet Kenya Limited has a valid and current tax compliance certificate duly issued by KRA,” said the company.
“We are not aware of any complaint of non-compliance whatsoever, and therefore take great exception to the purported suspension of our licence,” said Mozartbet.
SportPesa and Betin have argued that it would be impossible for mobile companies to shut down their paybills and short codes since they have pending cases in court between them and the Kenya Revenue Authority (KRA) on taxes.
Last week, High Court Judge Weldon Korir suspended BCLB’s decision to deny Betin a chance to renew its licence.
Betin argued before court that unless an urgent temporary order is issued to stop the board’s decision, it would suffer irreparable losses, including being arrested for running an unlicensed business.
SportPesa, on its part, had last month sued KRA over a Sh3 billion tax demand, saying the taxman had not carried out an assessment before issuing the demand.
“The funds held by Safaricom belong to individual players who placed bets through SportPesa. Those funds do not belong to and are not held by Safaricom on behalf of SportPesa,” argued SportPesa in its application in court.
TOP BETTING COMPANIES IN KENYA
Trading as Betway, Bluejay is the third largest gaming firm and also the youngest of the top three.
Bluejay Limited was registered on September 8, 2015 and has five directors, two of whom are Kenyans.
Former Kenya National Chamber of Commerce and Industry (KNCCI) chairman Kiprono Kittony and his sister, Ms Caroline Jepkemboi Kittony-Waiyaki, are the only local directors.
Foreigners Jonathan, Mr Edward Chilton, Mr Jason Bradley Kramer and Mr Antony James Gevisser are the firm’s other directors. Foreign firm Rosehall Global owns 70 per cent of Bluejay and by extension, Betway. The other 30 per cent stake is owned by Quadco Three Hundred and Eight Limited.
Records at the Companies’ Registry seen by the Nation indicate that Mr Kittony and Radio Africa Limited — which runs the Star newspaper and several popular radio stations including Classic 105 and Kiss 100 — each own 50 per cent of Qaudco.
Mr Kittony and Radio Africa CEO Patrick Quarcoo are the only directors in Quadco. Betway is based in Nairobi.
Gamcode Limited, which trades as Betin, was registered locally on February 11, 2014 and is wholly owned by foreigners.
Mauritius-registered Samson Capital Investments Limited owns 90 per cent of Gamcode, while Italian national Leandro Giorgio Giouando has a 10 per cent stake in the betting firm. Mr Giouando and Mr Domenico Giovando are Gamcode’s only directors.