KRA vs SportPesa: Inside the Sh1bn Telco Seizure Battle
The Kenya Revenue Authority (KRA) and betting giant SportPesa are locked in a fresh legal showdown over the seizure of roughly Sh1 billion held in the firm’s mobile money accounts across major telcos. The dispute reopens old wounds from a tax war that first flared up seven years ago, when the taxman went after Pevans East Africa, the company that once operated the SportPesa brand in Kenya.
What exactly is KRA trying to seize?
At the heart of this fight is close to Sh1 billion sitting in paybill and till accounts linked to SportPesa’s operations. KRA moved to freeze and recover these funds through agency notices, a legal tool that lets the authority order third parties, in this case mobile network operators, to hand over money owed by a taxpayer.
The telcos hold the cash because betting in Kenya runs almost entirely on mobile money. Every deposit, stake, and payout flows through M-Pesa and rival platforms. So when KRA wants to squeeze a betting firm, the fastest route is straight to the telco wallets.
Why is this happening seven years later?
This is not a new grudge. Back in 2019, KRA pursued Pevans East Africa over disputed tax assessments, a saga that eventually saw the original SportPesa exit the Kenyan market before returning under a restructured entity. The taxman argued that huge sums in gaming taxes, withholding tax on winnings, and excise duty went unpaid.
That earlier standoff never really ended. It simmered through court corridors and appeals. The current Sh1 billion pursuit is essentially the next chapter, with KRA insisting the debt is real and the operator pushing back hard against the amounts and the methods used to collect them.
Can KRA legally freeze money held by telcos?
Yes, and this is where things get uncomfortable for many businesses. Under the Tax Procedures Act, KRA can issue agency notices to anyone holding money on behalf of a taxpayer. Banks, telcos, and even customers can be turned into collection agents overnight.
The catch is that the taxpayer must genuinely owe the money, and the process must follow due procedure. SportPesa’s team is contesting both points, arguing that the assessments are inflated and that freezing operational funds cripples a licensed business before any final ruling. You can read more about how these enforcement powers work on the official KRA website.
What does this mean for the betting industry in Kenya?
The betting sector is one of KRA’s juiciest targets. It moves billions of shillings monthly and touches millions of Kenyans, especially young men chasing quick wins on football and virtual games. Every stake carries excise duty, and every payout attracts withholding tax.
When a heavyweight like SportPesa gets its accounts frozen, the whole industry pays attention. Smaller operators worry they could be next. Punters worry about delayed payouts. And investors watching Kenya’s fast growing digital economy see it as a reminder that regulatory risk is very real here.
For context on how different sectors have performed for those putting money to work, see our breakdown of where investors made money in the first half of the year, which shows just how volatile some high growth spaces can be.
How could this dispute end?
There are a few likely paths. The two sides could reach a negotiated settlement, something KRA has done before with large taxpayers to unlock frozen cash and keep businesses running. Alternatively, the courts could rule on whether the assessments and agency notices were lawful.
History suggests this will drag on. The Pevans saga took years. Expect appeals, expert arguments over accounting, and pressure from both the Treasury, which needs the revenue, and industry lobbies worried about scaring off legitimate operators. You can follow ongoing developments and analysis on our homepage, and compare sector trends in our related look at where investors made money this year.
A quick word on responsible betting
Beyond the boardroom fight, this story is a reminder for ordinary punters. Betting is entertainment, not an income strategy, and the odds always favour the house over time. If you or someone you know is struggling to control gambling habits, reach out to a professional counsellor or the National Authority for the Campaign Against Alcohol and Drug Abuse (NACADA) for support. Never bet money you cannot afford to lose.
The bottom line
The KRA and SportPesa fight over the Sh1 billion telco seizure is more than a corporate spat. It signals that the taxman is done playing soft with betting money, and that mobile money accounts are fair game for enforcement. For businesses, the lesson is clear: keep tax affairs tight, because KRA now knows exactly where the cash sits. For punters and investors, it is a nudge to stay informed and treat this fast money world with healthy caution.