Betting enthusiasts are counting their losses after most betting firms implemented the 20 per cent deduction on winning stakes directive by KRA and Betting licensing board.
This means that for every win, the gamers will receive 20 per cent less. One of such firms, BETIKA, explained to the frequenters of its site that even as it has lodge a case with the Tax appeal tribunal to challenge the directive by the taxman, it has been remitting the 20 percent withholding tax to the authority on behalf of the gamers for every win.
But it is not sustainable, the statement said.
"Dear customer, we 20% withholding tax on your behalf to the Kenya Revenue Authority pending determination of your Tax appeal tribunal case. However....we find ourselves with no option but to deduct 20% on gross winning," the statement reads in part.
The company also indicated that it has sought the legal definition of 'winning' as part of its strategy to challenge the decision by the tax body.
In further explicating the implication of this decision to its customers, the company illustrated to one of its fan online that with winning odds of 1.30 for example,a bet worth Sh1000 would return Sh1040 into the hand of the gamer, rather than the Sh1300 is often the norm.
The fan had inquired about the impact of the decision via Facebook.
BETIKA becomes the second gaming firm to effect the directive, after OdiBets which had implemented it, giving their punters 80 per cent of the successful bets. The 20 per cent is remitted to the tax man.
The government believes the tax is part of its intervention to confront the alleged widespread betting addiction among young people and which is blamed for contribution in spike in crime.
KRA has since notified gamblers that it expects betting firms to deduct and remit the taxes.
Cancelling the licenses of another of other betting firms as well as withdrawing their paybill numbers have also been part of this drive.
However, the move have met hue and cry from the firm, betting fans and sport enthusiasts, blaming the government of undermining investment and sports in the country.
Some of the betting firms have also withdrawn their sponsorship to various sports clubs in the country, citing hostility from the state.
For example, SportPesa on Friday announced that it has cancelled all sports sponsorships after a prolonged battle with KRA over taxes.
In a statement, the firm said, "We regrettably wish to announce that due to the uncertainty of this situation SportPesa will be cancelling sports sponsorships effective immediately. All clubs and partners will have received notices as provided for in their contracts."
It said it has been subjected to punitive measures by regulators such as delayed license renewal and the suspension of Paybill numbers, which have reduced the level of business operations.
