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Sportpesa Was The Second Most Profitable Company in Kenya after Safaricom, Documents Show.

Sportpesa, second profitable in kenya
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During its operations, Sportpesa was the second most profitable company in Kenya after Safaricom documents show.

The company has for the first time disclosed its annual sales of Sh149.7 billion, putting to focus the extent of the gambling craze in Kenya and the huge amounts of money available to its investors.

According to documents seen by ShopaXo and presented to the courts, the firm averaged daily bets worth Sh408 Million or Sh149.7 billion in the year ending 2018.

The same year, the company paid out Ksh. 129.6 billion in winnings leaving it with a whopping Ksh. 20.1 billion enough to generate Ksh. 10 billion profit having paid all the expenses.

Assuming that the company has 5000 employees, it would comfortably pay each Ksh.100000 for the next quarter of a century.

Sportpesa, documents also show that it has a higher market capitalization than the Equity bank, the second-largest bank in Kenya.

SportPesa, Second-Largest Company In Kenya

These figures make SportPesa the second-largest company in Kenya by revenue after Safaricom, which recorded a turnover of Sh251.2 billion in the year ended March 2020.

Pevans East Africa, the company that runs SportPesa, said that it paid out Sh129.6 billion or 86.5 percent of the bets placed in the year 2018.

Its closure in October last year due to allegations of not paying taxes has seen its investors suffering losses that run into billions of shillings although there have been indications that the company will be allowed to resume its operations.

However, the resumptions of operations have been halted after fights broke out pitting a local majority shareholder against Bulgarian owners after SportPesa announced its return under the Milestone which was only licensed in October.

SportPesa CEO Ronald Karauri, who owns a minority stake in the company of 7%, and other investors have fallen out with businessmen Paul Wanderi Ndung’u and Asenath Wacera Maina, who have a combined stake of 38 percent. This matter is currently in court.

It is said that three investors from Bulgaria — Guerassim Nikolov of the ill-fated Toto 6/49 lottery, Valentina Nikolaeva Mineva, and Ivan Kalpakchiev—are said to have provided the gambling and digital technology expertise in the partnership.

This shareholder war threatens to break the six-year partnership of wealthy, politically influential Kenyans and Bulgarian investors that helped found SportPesa, which made its huge fortune from the online betting craze in Kenya.

In court, KRA says that it failed to collect the taxes from Pevans East Africa because due to the company’s alleged criminal activities.

Dominic Keng’ara, an investigations officer at KRA, said in a sworn affidavit, “That the preliminary investigations have established that the applicant [Pevans] have jointly and severally been involved in activities suspected to be intricate and complex tax evasion and money laundering syndicate.”

The agencies involved in the probe include the KRA, the National Police Service, the National Intelligence Service, the Central Bank of Kenya, and the Financial Reporting Centre.

The tax standoff has frozen SportPesa’s operations for nearly 18 months. Now efforts are being made to revive the popular gaming brand under a new outfit, which is majority-owned by some of Pevans’ founders.

What do you think?

Written by Judith Atieno

Judith Atieno is an intelligence researcher who enjoys helping old ladies across the road, painting and meditation. She is Kind and Outgoing, but can also be very pessimistic and a bit impatient.
She has a degree in journalism, though that is not what she does. However, she won't mind writing articles that keep readers on the edge.


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