Good day to you ladies and gents! As we get back to our roots, we welcome you to read and indulge with our articles and posts. To get us going is an article published in the Marketing Africa magazine by Richard Wanjohi – who will be sharing these more often as well as other posts on sports in Kenya. Karibuni and feel free to indulge us in on Twitter @sportkenya and Instagram #SportskenyaTM
Salutations, ladies and gents! Great to have us reading from the same page in the New Year. We would be saying good riddance to a most challenging 2017 but alas the bad luck followed us straight into 2018! Work with me…
To the Kenyan sports fans following the last days of 2017, we were treated to the announcement of the ‘hallowed Kenyan’ courts throwing out a petition by one of the biggest sports betting firms in the country. The case had been taken to the courts for interpretation and suspension of the Finance Act 2017. In June 2017, the Finance CS had sought to introduce a 35% levy on revenues obtained from betting, gaming, and lotteries and as well, as firms with competitions running prizes to be won.
There was hue and cry from the many betting firms that have been at the fore in the sports scene both for betting and sponsorship purposes. At the turn of the year, it became apparent that the Government was not going to balk at criticism thrown at it.
Within the first week of 2018, the biggest sports betting firm in the country which had also become sports main sponsors across many disciplines dropped most if not all local sponsorship deals. Second-tier and smaller betting firms have also been mulling over their support of smaller outfits in the sporting world.
The ruse by the Government on the 35% levy may have two elements to it,
- Revenue generation – most taxes are introduced to rake in monies which maybe in circulation and as a way of Government easing off its budgetary obligations. For an ambitious Government like ours has been it would be a no-brainer given the monies that betting and gaming firms have been making in the last 2-3 years. Conservative estimates put the figures at between KES 30-40 billion per year.
- Regulation – the betting and gaming industry has been on an abnormal growth trajectory for the same number of years as above. Mobile technology has made it easier for even the common person in the village to bet and win monies at the palm of their hands. As of writing this article, there were over 20 betting and gaming firms. If we add the slot machines and other gaming platforms in most urban areas, this will easily cross the 50s.
To reduce the number of companies (maybe through mergers/partnerships) and introduce barriers of entry, it was important for the GoK to rein in on charlatans or those operating below standards.
The effects of the levy though have been to shake up the industry and potentially ring a death knell on a number of investments in the betting, gaming and lottery space.
Sports critiques have also harped on a Government that ‘gives’ with one hand and ‘takes’ with the other. Only 2 years ago in June 2016, the same Finance CS had introduced a tax holiday for companies investing and sponsoring sports activities – to entice companies both existing and new to invest more in sport.
In the subsequent 18 months, a number of firms did oblige. They set up shop in the country and invested in sports in unprecedented ways, with 2017 seeing the resurgence of sports sponsorships. Other companies engaged in sport as they pushed their CSR budgets to procure visibility and presence as sports quite easily gives the spotlight. This has come a cropper in the past few weeks and may dwindle further if the sentiments of corporate firms are anything to go by.
What is amusing is the Government’s knee-jerk response to the withdrawal of sponsorship monies – a KES 500 million contribution. It may seem like a sizeable amount but it is a trickling if all the sports bodies and organisations in need of financial support from withdrawal of sponsorship monies.
Quick aside: I have a bone to pick with the national sports bodies and teams, is the challenge of procuring a single sponsor for your sport. We have seen the tragedy of singular partnerships in sport that prove detrimental and cripple the organisations activities’. It started with the sourcing of media partnerships and overall sponsorships for their sporting disciplines.
If there is anything to learn from the activities in January, it is the need for a number of corporate firms engaged in your sport. An example to learn from is the NBA, which has managed to rope in sponsors for most of its activities. Watch the NBA All-Star Game in the third weekend of February and you will know what I am talking about.
New CS – New Wine in Old Wineskins?
Coming through in the last days of January were the appointments to the Cabinet that included the new Cabinet Secretary for Sports. With 2018, being a busy sporting year for #TeamKenya, then the new office bearer already does have his hands full.
Starting off with the Winter Olympics in Pyeongyang – South Korea (yes Kenya is represented by the charming and affable Sabrina Wanjiru being only the second Kenyan and a chosen few of Africans to participate in the Games held under wet and chilly conditions on the icy slopes of this city in Korea.
It was embarrassing to see a South Korean company decide to pick Sabrina’s tab for sponsorship to enable her train and participate at the upcoming Winter Games. Where are the myriad Kenyan companies’ and what other proposition would they need to invest and brand such a rare gem?
Back to the CS’s matter, looking forward to his agenda for sport for Kenya in the next years. Beyond the political pronouncements – including the stadia et al – the most urgent matter is the setting up of the National Sports Lottery Fund.
Drawing from the Sports Act, the Sports Lottery Fund serves as to receive an annual sports programme at least 6 months before commencement of every financial year. This programme shall specify and outline a comprehensive plan of action for development, rehabilitation and maintenance of the projects and programmes of the sports agencies and estimated costs for every activity.
4 years since the enactment of the Sports Act, nothing has happened yet – no officials, no structure and still no monies to boot. As a top sporting nation, we should be serious with this Fund and it would have come in handy with the reduction of sponsorship monies.
The Fund ought to form a centralised system and basis for disbursement of monies meant for sports development – be it the physical infrastructure or the sponsorship of teams especially those on national duty.
Last year saw Kenya miss hosting the CHAN (which ended up in Morocco – and to add insult to injury their national team ended up winning this year’s edition). In total contradiction of the Government’s pledge to sport, the country hosted the World Athletics championships, which the IAAF gave raving commendations (sic).
We can avoid such misadventures if the Ministry and relevant sports bodies had not only made the commitment to host continental and international sports fetes but also look towards investing for the future.
This column has noted severally the need for infrastructure for our sports disciplines and with the devolved functions, it is now imperative for both national and local (read county) governments to make this happen.
Success Stories of Sports Fund
When and if the Sports Lottery Fund becomes operational, it can form the basis of a rebirth of sport in Kenya. We have a number of countries that have benefited from such Funds in building teams to sterling performances and long-term invested in the future.
In South Africa, we have programs such as Sport for All – a trust fund whose monies come from the National Gambling and Lottery Board. This sees a fraction of monies generated from casino gambling as well as national betting and lotteries companies deposited in the trust fund.
The programme has been successfully in initiating youth programs for most of South Africa’s sporting disciplines including cricket, football and rugby to mention but a few.
In the UK, the country has a number of active and well-managed sports trust programs, which include the National Lottery Fund, which disburse over £600 million per year. Others are UK Sport – which manages monies from both the Lottery Fund and affiliate bodies such as NOC among others and UK Youth that ensures youth programmes for not only sports but also educational, arts and sciences in the schools.
The success of these programmes has seen the UK emerge as a major sporting nation in most sporting disciplines and good showing in international sporting events. This was the case in the 2012 Olympic and Paralympic Games held in London.
To bring us home, sports will remain secondary to our national psyche until there is a deliberate and sustained effort to invest in it. Beyond the national levies imposed on corporate firms and businesses, which have sought to engage in sport, the Government has to take a lead in investing and providing an environment to nurture sports.
Enactment of the Sports Act in 2013 was a step in this direction, but we have to move beyond the written laws and act. National sports bodies that are sponsored well have multiple revenue streams to ensure their sports activities across the year. The reward for this would be the supplementary monies from the Sports Lottery Fund once it starts functioning.
Beyond this, we can keep harping the same tunes year-in, year-out.