Just weeks after the Football Association of Ireland (FAI) terminated its sponsorship deal with SportPesa, the betting firm has ended its sponsorship deal with Everton FC.
Woes for the betting company seem to be on the rise after it announced exiting the Kenyan market shortly after celebrating its fifth anniversary on February 4, 2019.
Everton Ending Deal
In the statement by the European football club, Everton says that the partnership agreement with SportPesa will come to an end of the current season.
“The gaming brand, which has been Everton’s main partner since 2017, has agreed to the termination of its contract. The agreement has been reached following a comprehensive review by the Club of its commercial strategy in line with its vision and future growth plans,” read part of the statement.
SportPesa says it decided to change some of its global sponsorships in line with its new business strategy and sponsorships approach. In light of this, SportPesa has terminated two global partnerships.
“To this end, SportPesa will no longer be on the front of the shirt of Everton as a principal partner after the 2019/2020 season. We would like to thank our partners for their support and the amazing projects that we did together,” it said in a statement.
The club’s spokesperson said, “This has been a difficult decision but one that allows us to best deliver on our commercial plan and to grasp the new opportunities now open to us. The Club would like to thank SportPesa for all of the work that has been done together. Our partnership has seen our first team visit Africa on two occasions, as well as former players and Club staff take part in numerous activations in the region. This has allowed us to grow our own footprint in Africa and further strengthen our special relationship with the continent.”
The statement adds that Everton will appoint a new main partner ahead of the start of the 2020/21 season.
SportPesa was established in Kenya in 2014 becoming one of the fastest-growing gambling entities raking billions in profits.
It became the leading betting company in Kenya before spreading its wings to Tanzania, Italy and the UK which if it is anything to by, they are not as profitable markets as Kenya was.
The company’s real owners have remained largely unknown with the CEO Ronald Karauri, who is a minority shareholder living large and displaying his opulence for all to see.
Also read: How the Casino Industry is Changing in Kenya
The company started facing headwinds in Kenya after the taxation regime for betting companies was changed forcing the Sportpesa out after it disagreed with the new regulations.
SportPesa listing on the NSE
So successful was the gambling industry that SportPesa was mulling floating an IPO at the Nairobi Stock Exchange (NSE) in two years. The revelation came in 2016 but in October 2018, the company declined to comment on the listing plans.
Plans were that SportPesa was to list on the NSE in the first quarter of 2019. However, it seems that these plans were shelved and with the company’s exit, buried and forgotten. In a Bloomberg report in 2018, SportPesa had appointed Kestrel Capital East Africa Ltd as transaction advisers for the IPO.
The gambling behemoth registered in the Isle of Man at the time was recording an annual revenue of Ksh 100 billion (US$1 billion). If the IPO succeeded, it would have made SportPesa one of the 10 biggest companies on the NSE.
Throughout Africa, gambling and sports betting have gained huge popularity making the industry lucrative.
Africa’s Gambling Problem
Having hit the multi-billion dollar figure in Africa, the gambling market could hit US$635 billion by 2022 globally, estimates by Research and Markets showed in 2018.
The gambling firms have come up with innovative ways to hook as many as possible. Some of the tactics include offering free bets making gambling interesting and worthwhile investing in.
With the increasing usage of the mobile phone in Sub-Saharan Africa, each gambler is spending a fortune forgetting the house always wins.
Kenya beats every other African country when it comes to betting by the youth. The GeoPoll survey conducted on the youth aged between 17 years and 35 focused on Kenya, Uganda, Tanzania, Nigeria, Ghana and South Africa.
From the survey, Nairobi emerged as the gambling capital with 908 video poker and slot machines, 18 gambling facilities and 128 table games.