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How SportPesa made waves in Africa and the Premier League

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By DAVID CONN
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LIONEL FAULL

By LIONEL FAULL
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ATANAS TCHOBANOV

By ATANAS TCHOBANOV
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Barely heard of in Britain until it launched a spree of Premier League club sponsorships in 2016, the online gambling platform SportPesa has since spread its name across football, rugby, horseracing and Formula One, associating its branding with good works in Africa. At Everton, where SportPesa is the main sponsor, its name is prominent all over Goodison Park, the club have been in Kenya for a pre-season tour, and they promote SportPesa’s “Kits for Africa” initiative, with a donation bin in the club store.

Everton’s chief executive, Denise Barrett-Baxendale, wrote in the club’s annual report: “We value our developing relationship with SportPesa, who have demonstrated a strong alignment with our values.” A spokesperson for Everton, who describe themselves as “the people’s club”, said Barrett-Baxendale was referring to the sponsor’s support for the club’s extensive community work, which she herself pioneered in the deprived areas around Goodison Park.

Founded in Nairobi as a partnership of wealthy, politically influential Kenyans with Bulgarian investors, SportPesa mined its huge fortune exploiting an online gambling craze in the country. Interior minister Fred Matiang’i warned recently of rising addiction and suicides, adding that gambling will “destroy the moral fabric” without strengthened regulation.

In the UK, while SportPesa has promoted its brand through the Everton sponsorship and partnerships with Arsenal, Southampton and Hull City, it makes use of the “white label” system, allied to a company, TGP Europe, registered offshore in the Isle of Man, a tax haven.

This structure, permitted by the UK government, means SportPesa does not require a licence from the Gambling Commission, UK bets are paid to the Isle of Man, and no SportPesa company appears to pay UK corporation tax on those revenues, nor contribute to UK gambling welfare programmes.

Campaign groups including Gambling with Lives have criticised the English football establishment for selling its appeal so enormously to gambling, with many Premier League and Football League clubs – and the EFL divisions themselves – sponsored by betting companies, and concerns are escalating about problem gambling and the game’s “gamblification”.

SportPesa grew rapidly in Kenya to dominate online gambling by zealously exploiting the mass arrival of mobile phone technology from 2014, and sponsors the country’s Premier League. With little regulation and no welfare or research similar to even the UK’s limited industry-funded framework, serious problem gambling appears to have become entrenched among the young people, who are gambling and losing far more than elsewhere in sub-Saharan Africa.

Mr Matiang’i, finally proposing new regulation in May, said $2 billion (Sh200 billion) was gambled annually in Kenya, mostly by low earners, and that 500,000 young people defaulted on loans to fund gambling. Last week SportPesa was among a number of gambling companies whose licences were suspended because of reported concerns about non-compliance with regulations, although SportPesa said it did comply and is continuing to operate because of a court order.

Ivaylo Bozoukov, SportPesa’s director of global strategy, told the Guardian that SportPesa’s expansion into the UK, which includes offices in Liverpool’s Liver building where Everton are also based, was funded by the profits made in Africa. Well-placed sources have told the investigative website Finance Uncovered that SportPesa made more than $1 billion (Sh100 billion) revenues last year in Kenya, but the company does not make its revenues or profits, in Africa or the UK, public.

A spokesperson described that figure as “a very significant overstatement” and said: “As is common with private companies, we have made a commercial decision not to publish our revenues in order to protect our competitiveness.”

SportPesa does have a UK-registered company, SportPesa Global Holdings, formed in March 2017, which does declare its shareholders and accounts, but the brand’s structure means that its UK gambling revenues do not appear to be received by that company.

The holding company’s largest Bulgarian shareholder, Mr Guerassim Nikolov, a casino owner, moved to Nairobi in 1999 from Sofia, where he operated a casino, and he founded SportPesa in 2014.

Described as the group chief executive, Nikolov wholly denies claims made in Bulgarian media in 2006 that he left the country after being questioned by police in relation to an alleged criminal incident.

Asked by the Guardian about these claims, a SportPesa spokesperson said: “Mr Nikolov vehemently denies the allegations contained within the stories you have highlighted to us and we strongly urge you to treat any claims – most of which are made in personal blogs and by anonymous sources – with extreme scepticism.

“Mr Nikolov has non-operating interests in casinos [i.e. he is not involved in the day-to-day running of them]. Mr Nikolov has passed the know-your-client checks of regulators in several jurisdictions including some of the most rigorous authorities around the world.”

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Mr Nikolov and other Bulgarian investors are said to have provided the gambling and digital technology expertise in the partnership that founded SportPesa.

The largest Kenyan shareholder is Ms Asenath Wacera, whose late husband, Mr Dickson Wathika, was the mayor of Nairobi and a long-term friend of President Uhuru Kenyatta. Mr Paul Wanderi Ndung’u, another major shareholder, is a prominent entrepreneur in Kenya, having invested early in mobile telecommunications, and he is a major financier and fundraiser for Jubilee party.

In June 2017, President Kenyatta reversed a pledge for a 35 per cent tax on gambling to fund sport, arts and universal healthcare after relentless lobbying by SportPesa and other gambling companies.

Instead, after his November 2017 re-election, the president introduced a 15 per cent rate, while imposing a 20 per cent tax on individual gamblers’ winnings, explaining this was “in order to enhance equity and fairness”.

President Kenyatta’s spokesperson did not respond to an inquiry from the Guardian about whether the lobbying from SportPesa or the gambling industry had an impact on his change of stance.

SportPesa responded by saying: “Our growth is attributable to outstanding customer experience and we refute any suggestion that the company has sought advantage through political connections.”

SportPesa’s use of the UK’s “white label” system, in common with many overseas-owned gambling companies including several more Premier League sponsors, is noted in small print at the bottom of its alluring UK website.

“SportPesa is powered by TGP Europe Ltd of … Douglas, Isle of Man,” it notes. “TGP Europe Ltd is licensed and regulated by the Gambling Commission of Great Britain for provision of services to the United Kingdom.”

The system means TGP Europe provides the actual gambling operations for SportPesa and other companies marketing themselves in the UK. The money supporters of Everton, Arsenal, Southampton, Hull City and other British people bet through SportPesa’s app and website appears to be actually paid to TGP Europe in the Isle of Man.

SportPesa, as a non-licensed company, also has no responsibility to contribute to GambleAware, the UK industry-funded organisation providing welfare and education about problem gambling.

A voluntary code is applied by companies to donate 0.1 per cent of their gross gambling yield, but GambleAware’s list of 2018-19 donors revealed that TGP Europe contributed only £100.

The SportPesa spokesperson said of this minimal contribution: “We share your concerns about this and raised the issue with TGP directly. As a result, they have now agreed to increase their annual contribution to GambleAware to £10,000.”

Isle of Man-registered companies do not pay UK tax or publish financial accounts, so there is no available record of how much money TGP or SportPesa are making from their expanding UK gambling operations.

The owners of TGP Holdings are listed as three Isle of Man trusts and one trust based in the British Virgin Islands, another tax haven.

There is no public information about who the beneficiaries are of these trusts.

TGP Europe did not respond at all to questions about the structure of its operation, the revenues from SportPesa and whether any UK corporation tax is paid.

In its statement, SportPesa did not respond to questions about the company’s UK revenues or whether UK tax is paid on them.

Its spokesperson said: “We are a socially responsible business that puts tremendous emphasis on grassroots sport and community development. We are fully compliant with all UK and international legal requirements and, as a company that operates in highly regulated markets, we take our responsibilities extremely seriously.”

In response to the wider question of how renowned English football clubs decide to partner their names so wholeheartedly with gambling companies, particularly where brands are linked offshore and their finances are not publicly transparent, none of the clubs would explain their decision-making process.

Hull City declined to comment, as did Southampton, whose three-year partnership with SportPesa ended last season.

An Everton spokesperson said in a statement: “As with all our partnership agreements, a due diligence process was carried out both by the club and external advisers. Through this, we obtained the assurances we needed in order to proceed with a partnership with SportPesa.”

A spokesperson for Arsenal, whose partnership with SportPesa finished in May, said: “We do not discuss the details of any of our commercial partnerships, but would point out that we conduct due diligence checks via third-party organisations where appropriate before entering into agreements.”

This story was first published by The Guardian

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Osaka launches Australian Open title defence in style

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AFP

By AFP
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Naomi Osaka began her Australian Open title defence in emphatic fashion, breaking the net with a blockbuster serve as she dismantled unseeded Czech Marie Bouzkova on Monday.

The 22-year-old Japanese, the world’s second highest-paid female athlete after Serena Williams, powered through 6-2, 6-4 in 80 minutes.

The two-time Grand Slam champion, one of the prime threats to Williams’s bid to win a record-equalling 24th major, will play China’s Zheng Saisai in round two.

Third seed Osaka saw her victory march held up for a few minutes early in the second set after a fizzing serve clocked at 183 kilometres per hour (114 miles per hour) damaged a net tether at the 15,000-capacity Rod Laver Arena.

“Broke the net today,” Osaka tweeted afterwards to her more than 500,000 followers, along with a video of three maintenance personnel rushing onto court to repair the broken fixture.

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Osaka, who endured a turbulent 2019 after winning in Melbourne 12 months ago, was relieved to overcome the 59th-ranked Bouzkova safely.

“It was really tough for me trying to control my nerves,” she said. “It’s tough to play someone you’ve never played before in the first round of a Grand Slam. I hope I’m still standing here at the end of this week.”

Osaka has spoken openly about her struggles with negative headlines and the weight of expectation, but was in relaxed mood throughout.

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It was partly because her Haitian father Leonard Francois, who was her coach for back-to-back titles in the autumn in Japan and China, was in her player’s box for the first time at a Grand Slam.

“Before when he used to sit in my box I would just look at him and complain a lot,” the former number one Osaka told a press conference, calling her father “superstitious”.

“But I have matured over the past three or four years he hasn’t sat in my box.

“He was my coach during Tokyo and Beijing and was sitting in my box the entire time.

“He has a good winning streak by sitting in my box.”

The first Grand Slam of the year went ahead as scheduled on Monday after air pollution eased in Melbourne — although that gave way to rain.

Last week’s build-up to the Australian Open was plagued by choking haze from widespread bushfires, forcing organisers to temporarily delay qualifying matches.

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Serena off to flying start in Australian Open

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Serena Williams blitzed the first set in 19 minutes as she launched her quest for a 24th Grand Slam title with a quickfire demolition of Anastasia Potapova at the Australian Open on Monday.

The 38-year-old American, wearing a lilac dress and matching trainers, and sporting heavily decorated fingernails, powered past the Russian teenager 6-0, 6-3 in 58 minutes.

The eighth seed plays Tamara Zidansek of Slovenia or Han Na-lae of South Korea in round two in an expectant Melbourne, where she can equal the all-time record of Grand Slam titles.

Williams comes into Melbourne in ominous form after breaking her three-year title drought with victory in Auckland — her first since becoming a mother to daughter Olympia.

Olympia was there to see her mother win the title last week, but Williams said after easing to victory over the 18-year-old Potapova: “It was really special for me (Olympia) and her — I hope for her.”

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But the American legend, speaking to an adoring crowd at the 15,000-capacity Rod Laver Arena, admitted that Olympia “just cares about Play-Doh”.

“I try to tell her I’m someone, you know,” she joked.

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“(But) I am just known about town as Olympia’s mum — I love that.”

Williams threatened to blow away Potapova — who was temperamental at times — in embarrassingly rapid fashion.

But the 90th-ranked Russian, overawed in the first set, fought back and broke Williams’ serve in the second, helped by some sloppiness from the American.

Williams double-faulted to go down a surprise 2-1, but there was never a hint of an upset as the American broke back before pulling away to an easy win.

There is huge pressure on Williams as she eyes the 24 Grand Slams won by Australia’s Margaret Court.

Since winning the title in Melbourne in 2017 she has lost four Slam finals, each time failing to even win a set.

Williams, the highest-earning female in sport, was pregnant with Olympia when she lifted the Melbourne crown three years ago.

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Kenya Cup heads to crucial stage

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AYUMBA AYODI

By AYUMBA AYODI
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Kenya Cup enters the third and critical phase on Saturday when teams revert to their respective pools following the end of match day 11 last Saturday.

Saturday witnessed the last round of six matches where teams from the opposing pools battled in a one-off, which was the second phase.

It’s visiting Nakuru, who weathered both a previous defeat by Kabras Sugar and a second half assault from Mwamba to beat Kulabu 18-13 in a thrilling Kenya Cup match at the Railway Club, Nairobi. Nakuru had lost to Kabras 38-0 in their previous outing.

That happened as leaders Kabras Sugar, defending champions Kenya Commercial Bank (KCB) and Homeboyz refused to bulge from the top of the log after they claimed convincing victories.

Kabras Sugar thrashed touring Kenya Harlequin 34-3 at the Bullring to claim a bonus point from the victory and stay top with an improved tally of 50 points.

KCB mauled Kisumu 55-3 at Kisumu Polytechnic grounds to remain second with 49 points with Kabras Sugar and KCB having lost one match each so far.

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Homeboyz rolled a swift 36-11 victory against hosts Nondescripts at the Jamhuri Park to also stay third with 44 points.

Menengai Oilers failed to uphold their giant-killing instincts when they fell to Impala Saracens 37-29 in a tight clash at the Impala Sports Club. Oilers had stunned Mwamba 30-14 in their previous outing.

The victory saw the Sarries stay fourth with 35 points as hosts Blak Blad crushed visitors Western Bulls 44-0 in a bottom-of-the-table clash at Kenyatta University grounds.

Oilers stayed fifth with 30 points with Nakuru occupying the sixth and last semi-final playoff place with 29 points, while Mwamba are placed seventh with 25 points followed by Nondies 21 and Quins 17.

The only shift in the league came after Blak Blad hammered visiting Western Bulls 44-0 to move one position to 10th and a place from relegation with 13 points.

Western Bulls and Kisumu are 11th and 12th and in relegation zone with 13 and five points respectively.

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In Pool “A”, champions KCB, Western Bulls, Quins, Nakuru, Oilers and Homeboyz will face-off in return legs with Kabras Sugar, Nondies, Impala, Blak Blad, Mwamba and Kisumu taking on each other in Pool “B”.

The top two teams after the end of the third phase proceed to the semi-finals direct with the next four engaging in a playoff for a place in the semis.

Back at Railway Club, there was no end to Mwamba’s miseries after they failed to recover from last Saturday’s defeat to Oilers.

Mwamba camped in Nakuru’s half virtually for the better part of second half, but wasted a lot of opportunities. Nakuru failed to venture into Mwamba’s 22 metre zone the whole of the second half as the Great Rift side deployed an impregnable defence.

Nakuru scored all their points in the first half with centre Oscar Ouma and hooker Emmanuel Mboya landing a try each. Full back Collins Onyango made one conversion and kicked in two penalties to lock the duel.

Fly-half Brian Kivasia gave Mwamba the penalty in the first half with the burly eighth man David Machanje landing from rolling mauls but all was in vain.

“The absence of my prop Felix Omondi was really felt in the second half as my forwards had to dig in for the slim victory,” Nakuru coach Felix “Mwalimu” Oloo said, adding that they have now resolved what he terms “domestic issues” that had seen his side register poor results.

Mwamba coach Peter Kefa rued the mistakes that cost his side. “We lost a vital try-scoring chance and two penalties in the second half and it made the big difference,” said Kefa.

Kabras Sugar 34-3 Harlequins; Mwamba 13-18 Nakuru; Impala 37-29 Menengai Oilers; Nondescripts 11-37 Homeboyz; Blak Blad 44-0 Western Bulls; Kisumu 7-55 KCB.

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