SportyBet Limited Silently Sneaks Back to Kenyan Market After Sh5 Billion Tax Evasion Scandal With KRA

Exclusive Investigation: How Controversial Betting Giant Uses Virtual Operations and Proxy Companies to Circumvent Tax Authorities

NAIROBI, KENYA – In a shocking turn of events that exposes the sophisticated methods employed by international betting companies to evade regulatory oversight, SportyBet Limited has quietly resumed operations in Kenya through virtual platforms and proxy partnerships, despite officially ceasing operations following a bitter Sh5 billion tax dispute with the Kenya Revenue Authority (KRA).

Our three-month investigation reveals how the controversial betting firm, owned by Jai Ashok Mahtani and Sudeep Ramesh Ramnani (alias Sudeep Dalamal Ramnani), has circumvented Kenyan tax authorities and regulatory bodies through a complex web of international payment gateways and proxy gambling companies currently operating in the local market.

The Sh5 Billion Tax Scandal That Shook Kenya’s Betting Industry

The SportyBet saga began in April 2023 when KRA moved to freeze the company’s accounts across six major banks – KCB, Standard Chartered, Equity Bank, Stanbic, ABC Bank, and Co-operative Bank – along with multiple Safaricom paybill numbers over alleged tax evasion amounting to Sh5 billion.

The preservation order, obtained under Section 43 of the Tax Procedures Act, came after KRA’s assessment revealed massive under-declaration of revenues between 2018 and 2021. According to court documents, KRA established the liability after collecting tax information from the firm’s bankers and paybill accounts with Safaricom, noting “huge variance between deposits and self-declarations.”

The Anatomy of Alleged Tax Evasion

KRA’s lawyer Sega Addah told the High Court that SportyBet had “no known assets in the country apart from the money being held in the six banks and Safaricom paybill numbers,” raising concerns that the massive tax liability might be transferred out of the country if not preserved.

The investigation revealed sophisticated methods allegedly used to hide actual revenues:

• Multiple Paybill Manipulation: Internal transfers between various paybills to create confusion in revenue calculations
• Phantom Deposits: Customers depositing money without placing actual bets, creating artificial transaction volumes
• Revenue Underreporting: The KRA alleged the firm “under-declared the incomes for the three years between 2018 and 2021”

SportyBet’s defense claimed these were legitimate business practices, arguing that “counting all pay bill transactions will simply result in counting the same funds many times over.”

The Controversial Ownership Structure

Central to the scandal are the company’s owners, whose actual nationality remains unclear. Jai Ashok Mahtani and Sudeep Ramesh Ramnani, who also operates under the alias Sudeep Dalamal Ramnani, were among betting firm directors affected during previous deportation orders by Kenya’s Interior and National Coordination Ministry.

The duo co-owns Marawin, which operates the SportyBet brand in Nigeria, while Sudeep also runs Tower Studios Limited, a firm domiciled in London. This international structure has allowed the company to maintain operations across multiple African countries including Nigeria, Ghana, Tanzania, Zambia, and South Africa.

The Virtual Return: How SportyBet Circumvents Kenyan Authorities

Despite officially ceasing operations in Kenya, our investigation reveals that SportyBet has never truly left the market. Instead, the company has employed sophisticated virtual operations:

International Platform Access

SportyBet continues to allow Kenyan participation through its international online betting platform, using two dedicated mediums:

• SportyTV: Streaming platform for live sports events
• SportyNews: Sports news and betting information portal

Payment Gateway Manipulation

The company utilizes various international payment gateways to process transactions from Kenyan customers, effectively bypassing local regulatory oversight and tax obligations.

Proxy Partnership Strategy

Our sources within the industry reveal that SportyBet is actively pursuing partnerships with licensed operators in Kenya to re-enter the market through proxy arrangements, allowing them to maintain their customer base while avoiding direct regulatory scrutiny.

Impact on Kenya’s Betting Regulation

The number of licensed betting companies in Kenya has steadily declined from 128 in September 2023 to 118 in August 2024, reflecting the increasing difficulties operators face due to regulatory measures. This decline highlights the broader impact of tax disputes and regulatory crackdowns on the industry.

The current tax structure for betting companies includes:

• 12.5% excise duty on gross gaming revenue
• 20% withholding tax on winnings
• 30% corporate tax rate

SportyBet no longer officially operates in Kenya and Uganda, yet continues to serve customers from these markets through virtual means.

The Broader Implications

The SportyBet case represents a watershed moment for Kenya’s gambling industry regulation. With the Treasury projecting to collect Sh15 billion from betting operations annually, and KRA targeting Sh41.1 million daily from betting firms, the stakes couldn’t be higher.

The company’s ability to continue operations virtually while avoiding local tax obligations raises serious questions about:

• Regulatory Gaps: The inability of current laws to address virtual operations
• Tax Revenue Loss: Potential billions in lost government revenue
• Consumer Protection: Kenyan bettors using unlicensed services
• Market Fairness: Licensed operators competing against unlicensed virtual services

Government Response and Future Outlook

The KRA’s aggressive pursuit of betting companies reflects the government’s determination to capture tax revenue from the lucrative gambling sector. However, the SportyBet case demonstrates the challenges regulators face in dealing with internationally structured companies that can operate virtually across borders.

As this investigation continues, Part Two of our series will reveal the specific proxy companies SportyBet is using for its planned return, while Part Three will expose previously unpublished revenue figures that show the true scale of Kenya’s gambling economy.

What This Means for Kenyan Bettors

Kenyan betting enthusiasts using SportyBet’s virtual services should be aware that:

• They have no local regulatory protection
• Dispute resolution mechanisms are limited
• Winnings may not be guaranteed
• They may be violating local gambling laws

This investigation is ongoing. If you have information about SportyBet’s operations in Kenya or other betting companies’ regulatory compliance, contact our newsroom confidentially at [contact information].

Next Week: Part Two – “The Proxy Network: How SportyBet Plans Its Kenyan Comeback Through Licensed Operators”