Weekend Mail

SportPesa: Kenyatta, Moi, Kibaki dynasties now gambling on betting!

Before its forced exit, this gaming giant was banking over Sh400 million dailywhat a four star beach hotel makes annually

Heads you win: President Uhuru Kenyatta’s relatives saw a chance to make money in trailer loads with the exit of SportPesa- which made half of the Sh340 billion Kenyans placed as bets annually. Mzee Jomo Kenyatta, Uhuru’s Old Guy, was once allocated shares at the International Casino when it opened shop in Nairobi in the 1960s to ensure “smooth operations.”

By Idris ‘Shoes’ Lule

Contributing Editor/Sports

President Uhuru Kenyatta’s relatives are betting to hit Mega Jackpots if their sudden foray into gambling is any yardstick. They are following in the footsteps of former President Mwai Kibaki, whose son Jimmy Kibaki, is a significant shareholder at Odibets.

The Kenyattas don’t want to miss out on Kenya’s betting bonanza. Just consider that before its forced exit from the market, SportPesa was banking over Sh400 million in daily bets. Mohammed Hersi, chair of Kenya Tourism Federation, says that daily bread “is the annual turnover of a 120 room, four star beach resort.”

Court filings by SportPesa reveal that the betting behemoth was raking in Sh150 billion in gross profits annually-half of all the sports betting money in Kenya, according to Betting Control and Licensing Board (BCLB.

 SportPesa was thus bigger than Equity bank-Kenya’s second largest-in turnover terms and second to Safaricom’s Sh250 billion in annual revenues. Never mind SportPesa has two other subsidiaries in the UK, one of which made Sh6 billion in annual profits-with SportPesa as its biggest client!

Interior CS Fred Matiang’i hissed that ‘no country has been built by gambling’

Tails you lose : Captain Ronald Karauri, CEO of SportPesa -where he holds a seven percent stake- announced the return of SportPesa through Milestone Games Ltd this November. But the euphoria it created was short lived as it gradually emerged that Uhuru’s relatives were investors in SportPesa and Milestone Games. Indeed, court filings indicate the SportPesa brand was sold this June to SportPesa Global Holdings for Sh14 million. SportPesa Global then gave Milestone Games license to use it for five years. Other shareholders of SportPesa cried foul, some have sued. The Betting Board has since withdrawn Milestone’s license-and the matter is now in court.

Just last year, tough talking Interior CS, Fred Matiang’i hissed that sports betting was an addiction that needed taming since “no country has been built by gambling.” Garissa Town MP Aden Duale piped that betting “was a threat to national security.”

 Shortly, stringent regulatory bottlenecks and doubling betting taxes to 20 percent led to tax tussles with SportPesa being slapped with a Sh15 billion bill by the Almighty Caesar at the Kenya Revenue Authority. This saw the exit of the big boys BetIn and SportPesa-which had12 million customers.

But even after SportPesa’s exit, over Sh29 billion was left in its coffers, but which has since been reported missing. Some aggrieved shareholders are threatening court petitions to trace the dough said to have been salted in foreign accounts. 

Enter Uhuru Kenyatta’s relatives-with an eye on eye-watering gambling dividends-and betting ceased being a ‘threat to national security’

Kuchoma bet: Gideon Moi of Axial and Richard Stonewigg of Actara teams tussle at the Manyatta Polo Club, Gilgil in March 2019. SportPesa has twice tried returning into circulation-with Uhuru’s blood relations as key cogs in the gaming wheel. The Kenyattas don’t want to fall by the wayside like the Moi family did with Supabet247-which had no Mega Jackpot winners before closing shop in 2017. It was their second foray in sports betting a previous company having also folded.

Enter Uhuru Kenyatta’s relatives-with an eye on eye-watering betting dividends-and gambling ceased being a “threat to national security.” It was no longer “endangering the future of our children” as Matiang’i had feared.

Peter Kihanya, Uhuru’s cousin by September 2019 had gradually acquired a one percent stake in Pevans East Africa which runs SportPesa and a 0.5 percent share in SportPesa Global which controls betting markets in Europe and Tanzania according to corporate filings in Kenya, UK and the Isle of Man as unearthed by Finance Uncovered.  Kihanya also bought a three percent stake in SportPesa Holdings (Isle of Man) which receives betting revenue from UK operations.

Half of SportPesa annual profits could pay 10, 000 employees earning Sh50, 000 a month for 25 years!

The bookmaker: Jimmy Kibaki (Inset) is chair and major shareholder of Odibets. There is quite some money in betting. SportPesa made Sh150 billion in annual revenues. Of that dough, Sh130 billion was spent paying winners, leaving an eye-watering Sh20 billion as net profit-minus operating expenses. But just half of that quid can pay 10, 000 employees earning Sh50, 000 a month for 25 years!

Of interest is that SportPesa had been spiriting billions of shillings to SPS Sportsoft, its sister company in the UK. In 2017 for instance, SPS billed SportPesa Sh6 billion for “IT and services,” according to Finance Uncovered

 That Sh6 billion would not be subjected to Kenya’s 30 percent corporate tax and would instead earn SportPesa shareholders extra billions as UK corporate tax stands at 19 percent.

If SportPesa made Sh10 billion after tax profit, Peter Kihanya’s one percent translates to Sh100 million

Multi-bet: Reviving SportPesa using Milestone’s license became a bad bet. But that is not the story. The story is that Milestone Games Ltd was 50 percent owned by Ngengi Muigai-Uhuru’s cousin (above). For how much Ngengi sold his stake to Karauri & Co. is not known. Through a labyrinth of corporate vehicles, Karauri acquired 54.4 percent in Milestone where Francis Waweru Kiarie, his fellow shareholder at SportPesa owns 40.9 percent. This means Karauri and Kiarie owned a combined 99.5 percent with the other 0.5 percent held by Wilson Ngatia Karungaru- a blood relation of the late Nyeri Governor Nderitu Gachagua.

Let us do the math: If SportPesa in Kenya makes Sh10 billion after tax profit, Kihanya’s one percent translates to Sh100 million.  It was after Kihanya’s entry in SportPesa that the Jubilee government removed the suffocating tax which led to its exit.

When local media exposed Kihanya’s stake in SportPesa and the reason the taxes were being relaxed, the uproar of how Uhuru’s relatives were using his presidency to feather their nests, saw him back peddling in September but that the issue would be revisited by Parliament after six months.

Safaricom lost Sh240 million for monthly bets placed via M-Pesa

Fixed odds: Gor Mahia midfielder Francis Kahata was guaranteed his salary with SportPesa’s Sh60 million in annual sponsorship. But its exit not only affected sports, but also the government lost Sh4 billion in annual taxes from SportPesa. Safaricom lost Sh240 million for monthly bets placed via M-Pesa. The 10 shareholders of SportPesa among them Paul Wanderi Ndung’u, also lost their billions in dividends-from the Kenyan market alone!

A year went by and then this November, Captain Ronald Karauri, CEO of Pevans East Africa-where he holds a seven percent stake- announced the return of SportPesa through Milestone Games Ltd.

But the euphoria it created was short lived. BCLB clarified that SportPesa was owned by Pevans whose license was revoked with a pending court case to boot. Milestone could only use ‘Milestone bet’, little known and without critical mass of gamblers!

One Reply to “SportPesa: Kenyatta, Moi, Kibaki dynasties now gambling on betting!

  1. Ngengi Muigai is not Uhuru’s nephew. The two are cousins. The father to this guy is the younger brother of Kenyatta sernior, although they belonged to different fathers. The biological father of Kenyatta was a guy called called Muigai who, after his death, his wife wambui was married to Ngengi.. So the biological father of Muigai was Ngengi.

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