KRA vs SportPesa: The Sh1bn Telco Seizure Fight Explained
The Kenya Revenue Authority (KRA) and SportPesa are locked in a fresh tax battle after the taxman moved to seize about Sh1 billion held in the betting firm’s accounts at telecommunications companies. This latest standoff comes seven years after KRA first pursued Pevans East Africa, the company that once ran the SportPesa brand in Kenya, over a mountain of disputed taxes.
What is the KRA vs SportPesa fight actually about?
At its core, this is a money chase. KRA believes it is owed roughly Sh1 billion and has gone after funds that SportPesa keeps within mobile money and telco systems. Because betting firms move huge sums through platforms like M-Pesa, the taxman sees these telco-held balances as an easy target to recover unpaid dues.
SportPesa disputes the claim. The company argues the seizure is heavy-handed and that the underlying tax question has never been fully settled. For a deeper breakdown, we covered the mechanics in our piece on the Sh1bn telco seizure battle.
Why is KRA going after money held in telcos?
Betting is a cash-heavy, digital-first business in Kenya. Punters top up wallets and cash out winnings almost entirely through mobile money. That means at any given moment, a betting firm may have hundreds of millions sitting in accounts tied to Safaricom, Airtel, or other operators.
KRA has powers under the Tax Procedures Act to issue agency notices. In plain terms, the taxman can instruct a third party (like a telco or a bank) holding your money to pay it directly to KRA instead of to you. It is a fast recovery tool, and it is exactly what appears to be at play here.
How does this connect to the old Pevans East Africa saga?
This is not new ground. Back in 2019, KRA and other regulators pursued Pevans East Africa, the original operator of the SportPesa brand, over billions in disputed taxes and licensing rows. That fight forced the brand to briefly exit the Kenyan market before restructuring and returning.
So the current Sh1 billion pursuit feels like a sequel. The players and the amounts have shifted, but the theme is the same: a government determined to squeeze tax out of one of the country’s most profitable and controversial sectors. You can read more about the ongoing dispute on Business Daily’s reporting.
What does this mean for punters and the betting industry?
If you bet through SportPesa, the biggest immediate worry is whether your deposits and winnings are safe. A frozen or seized account can slow down withdrawals and shake confidence. History shows that when regulators clamp down hard, punters often rush to cash out, which puts even more pressure on the firm.
For the wider industry, the message is loud. Betting firms in Kenya are under permanent tax scrutiny. Excise duty on stakes, withholding tax on winnings, and corporate taxes all stack up. The Kenya Revenue Authority’s official guidance spells out just how many layers apply to gaming operators. Any firm that gets its filings wrong risks the same treatment.
A quick reminder here: betting should always be treated as entertainment, not a way to make money. Only stake what you can comfortably afford to lose, and if gambling is affecting your finances or wellbeing, reach out to a counsellor or support service. This article is for information only and is not financial advice.
Could this dispute change how betting firms operate in Kenya?
Very likely. Every time KRA flexes its recovery powers, operators tighten their compliance and rethink how much cash they leave sitting in telco accounts. Some may push more funds through structures that are harder to seize, while others may simply pay up faster to avoid public fights.
There is also a business lesson for investors watching the sector. Regulatory risk is real, and it can wipe out value overnight. If you are weighing where to put your money, it helps to understand which sectors are actually rewarding investors right now. We broke that down in our look at where investors made money in the first half of the year.
The bottom line
The KRA versus SportPesa fight over Sh1 billion in telco-held funds is more than a headline. It is a snapshot of how Kenya’s taxman is treating the betting sector: as a rich, fast-moving target that must pay its dues. Expect the legal wrangling to drag on, and expect KRA to keep using agency notices to grab money at the source. If you are a punter, keep your balances lean and your expectations realistic. For more Kenyan business and money insights, visit our homepage.