SportPesa to end Kenya football league sponsorship over tax
Sport betting company SportPesa has announced it will end sponsorship of the Kenyan Premier League (KPL) after the government imposed a hefty tax increase on gaming revenue.
Company boss Ronald Karauri said the 35% increase would negatively affect its business operations.
KPL's top official Jack Oguda told the BBC that the news was devastating for Kenyan football.
SportPesa's sponsorship of teams outside Kenya will not be affected.
It currently sponsors English teams Everton and Hull City.
SportPesa is one of East Africa's major gambling companies.
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The tax was imposed to deter minors from betting.
Kenyans are the biggest gamblers in sub-Saharan Africa. Three-quarters of 17-to-35 year olds in Kenya admit to having placed a bet, according to a recent survey.
Young men use mobile phone apps to predict local and international football matches.
There have been concerns about its negative effects on young people with parents and religious leader saying it is harmful and urging the government to act.
Parliament had initially slapped a 50% tax on bookmakers, lottery companies and sports betting sites, which was lowered to 35% before the president signed it to law.
Mr Karauri told the BBC that the tax hike was likely to drive betting underground.
In another statement he said that regulation and not taxation was the best way to deal with the concern about betting effects on minors.
Big blow for Kenyan sport by Stanley Kwenda, BBC Africa
The decision is a huge blow to Kenyan sport in general because SportPesa also supports rugby and boxing in Kenya.
It sponsors two of the biggest Kenyan football teams - Gor Mahia and AFC Leopards - and the Kenyan Premier League and the Kenya Football Federation.
Earlier this year, it bankrolled a trip by the national team to England where it camped and played a friendly match with the then premier league side Hull City.
It also sponsors clubs in the Tanzania football league, as well as in England, but Mr Karauri told the BBC that deals in these two countries won't be affected by the announcement.
Mr Karauri said that the company would in the next few days officially inform the affected clubs and organisations of its decision to end support.
Mr Oguda said the decision was devastating because SportPesa had been "uplifting football in the country" and urged the government to resolve the impasse.
A joint statement by The Association of Gaming Operators-Kenya (AGOK) said that the tax on the betting industry would force many businesses in the industry to close.
It also said that the new tax will lead to job losses and also affect other industries like hotels, banks and telephone companies.