How gambling giant SportPesa made waves in Africa – and Premier League
19 July 2019
Everton’s sponsors are hailed by the club for supporting community schemes, but there are concerns about how the Kenyan-Bulgarian firm profits from an online gambling craze
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 east African country. Kenya’s 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 Kenyan young people, who are gambling and losing far more than elsewhere in sub-Saharan Africa.
Matiang’i, finally proposing new regulation in May, said $2bn 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 in Kenya 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 $1bn 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, 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. Read the full article on the Guardian here.