THE NUMBER THAT WON’T DIE
For the second time in seven years, a company operating the SportPesa brand is refusing to hand the Kenya Revenue Authority money the taxman says it is owed and for the second time, it is winning, at least for now.
On 30 April 2026, at 4:00 p.m. on a Friday, KRA fired agency notices at five banks Absa, KCB, Eco Bank, Equity and I&M and at Safaricom and Airtel, ordering them to freeze and remit funds belonging to Milestone Games Limited, the company that runs SportPesa in Kenya today.
The target was Sh1,011,230,716 in disputed excise duty on bets placed between June 2023 and February 2024, calculated at what was then a 12.5 percent rate, plus a further Sh462,991 in withholding tax on winnings. With interest and penalties, the exposure has swollen to roughly Sh1.4 billion.
Milestone Games ran to the Tax Appeals Tribunal. It won. The tribunal did not rule that SportPesa doesn’t owe the money it ruled that KRA broke its own procedural rules by moving to seize funds while an appeal was pending, and ordered the agency notices “lifted unconditionally.” KRA, in other words, may be entirely right on the merits and still be unable to touch a single shilling of the disputed sum for months, possibly years, while the case grinds through the tribunal and, in all likelihood, the High Court and Court of Appeal after that.
That is the story beneath the story: not a single confirmed act of evasion, but a legal architecture that a well-resourced, politically connected betting operator has now used twice to keep contested tax money working in its accounts rather than in the Treasury.
WHAT SH1.4 BILLION ACTUALLY BUYS
Kenya Insights ran the disputed sum against the government’s own unit costs for basic services, and the comparison is not subtle:
• Primary school capitation for roughly 598,000 pupils for a full year, at the new Sh2,340-per-learner rate.
• Secondary/senior school capitation for about 62,900 students nearly 3 percent of the entire national termly release of Sh44.1 billion.
• Inua Jamii cash transfers sustaining 58,300 elderly, disabled or orphaned beneficiaries for twelve months.
• 560,000 bags of subsidised fertiliser for smallholder farmers.
• Between 560 and 930 new boreholes in Kenya’s arid and semi-arid lands.
• Between 1,400 and 1,700 new Junior Secondary School classrooms, at a time of documented JSS classroom shortages.
These are not rhetorical flourishes. They are what the Treasury’s own capitation and infrastructure unit costs say Sh1.4 billion converts into. Every month the dispute remains unresolved is a month that money sits outside the public purse.
A PLAYBOOK, NOT AN INCIDENT
SportPesa’s relationship with the Kenyan taxman has followed a near-identical script for the better part of a decade, and the current dispute is simply the newest chapter.
In September 2019, SportPesa then operated by Pevans East Africa Ltd under CEO Ronald Karauri halted all Kenyan operations after a punitive tax hike and a multi-billion-shilling KRA demand.
The Betting Control and Licensing Board declined to renew its licence over the standoff. Weeks later, a new entity, Milestone Games Limited, emerged with a licensing arrangement to run the SportPesa brand under a deal with the UK-registered Sportpesa Global Holding Limited, to which Pevans had transferred the trademark.
The manoeuvre triggered shareholder litigation inside Pevans and a regulatory turf war with the BCLB, which accused Milestone of trying to sidestep the very compliance problems that sank its predecessor.
The scale of the original claim against Pevans was extraordinary: KRA initially sought Sh95 billion in taxes, penalties and interest.
An independent forensic review by the investigative outlet Finance Uncovered later concluded that KRA examiners had misapplied SportPesa’s UK-Kenya revenue-share formula to the wrong revenue base, materially inflating both the corporation-tax and betting-tax components of the claim a finding that cuts against any simple story of a company caught red-handed.
It is a detail this newsroom will not paper over: not every large KRA number in this saga has survived scrutiny. The dispute nonetheless ground through the Tax Appeals Tribunal and the High Court for years, eventually settling at Sh17.5 billion still a figure equivalent to roughly twelve of today’s disputed Sh1.4 billion demands, and proof that even heavily contested claims against this brand have historically resolved in the billions, not in vindication.
Along the way, the tribunal and the courts have handed the operator a string of procedural and substantive wins that, cumulatively, read less like isolated legal victories and more like a company that has learned precisely which levers to pull: a 2019 tribunal ruling that winnings taxes could only be charged on net payouts, not gross; a 2020 High Court finding that KRA could not collect withholding tax directly from operators rather than punters; a 2023 conservatory order barring KRA from deducting a fresh 12.5 percent excise pending a punter’s own court challenge; and now, in 2026, the lifting of agency notices on a fresh Sh1 billion claim.
KRA has periodically fought back including winning a 2022 High Court reversal worth Sh1.6 billion but the pattern of contest, restructuring and delay has proved durable across three different corporate identities operating the same brand.
THE FRIDAY-AFTERNOON AMBUSH AND WHY IT BACKFIRED
KRA’s own conduct in the current dispute has not helped its case. Agency notices landing at exactly 4:00 p.m. on a Friday after courts and tribunal registries have effectively closed for the weekend is not, on the available record, a coincidence unique to SportPesa; it is a recognisable enforcement tactic. Milestone Games said as much in its tribunal filings, accusing KRA of timing the notices “to deny the appellant a chance to move to court/the tribunal to protect its constitutional rights, thereby paralysing its business operations,” and of acting with “malice, bad faith and ulterior motives.”
The tribunal did not need to resolve that accusation to rule against KRA.
It found a simpler, harder problem: Section 42(14) of the Tax Procedures Act bars the Commissioner from issuing agency notices once a taxpayer has lodged an appeal, and Milestone had done exactly that on 16 February 2026 before the notices went out.
The tribunal further found that KRA had “merely suspended rather than genuinely withdrawn” the notices when challenged, and warned that recovery measures “cannot be left to the respondent to whimsically institute and lift agency notices as it so wishes.”
In plain terms: Kenya’s revenue authority tried to seize the money first and litigate the legality of doing so second, and got caught doing it. That is not a technicality that helps Kenyans waiting on JSS classrooms and boreholes. It is an unforced error that hands a Sh1.4 billion-richer betting operator more time on the clock.
THE BOOM THAT MADE THIS POSSIBLE
The stakes here are not abstract because Kenya’s betting economy has become genuinely enormous. In the year to June 2026, Kenyans wagered a record Sh330.5 billion online more than double the Sh88.2 billion staked the year before, and more than the Sh145 billion that retail, foreign and high-net-worth investors put into NSE shares over the same period. It came close to matching the Sh367 billion Kenyans parked in money-market funds.
KRA collected Sh16.5 billion in excise from the sector, beating its own target by 15.9 percent, after Parliament cut the excise rate from 15 percent to 5 percent effective July 2025 a move whose architect, National Assembly Finance Committee chair Kuria Kimani, has never fully explained to the public, beyond framing it as a fix for offshore betting leakage.
Whatever the intent, the effect is not in dispute: lower headline rates, radically higher volumes, and a KRA now boasting of real-time integration with 143 betting and gaming firms while one of the country’s most recognisable operators sits outside its reach on a technicality.
A GeoPoll survey found 64 percent of Kenyans had placed a football bet in the past year the highest rate on the continent, ahead of Ghana and South Africa with 67 percent watching three or four matches a week and many placing extra wagers in the 15-minute halftime window.
Kenya’s 2026 Gambling Control regulations now bar betting firms from using celebrities and past big winners in advertising, require automated blocking of deposits from self-excluded punters, and allow families to petition regulators to ban relatives from gambling. The reform push is real. It is also happening while a market leader keeps well over a billion shillings in contested tax out of state hands.
THE OWNERSHIP QUESTION
SportPesa’s ownership has always mattered as much as its balance sheet. Ronald Karauri, the company’s chief executive through its most turbulent years, was elected the independent Member of Parliament for Kasarani in August 2022 the first independent candidate ever to win that seat after missing out on a Jubilee Party nomination.
His dual role as a betting executive and a sitting legislator with oversight influence over the same industry that pays his company’s bills has drawn scrutiny from governance watchdogs.
That scrutiny sharpened this year alongside separate, unrelated litigation: the Safaricom subscriber-data breach case (HCCHRPET E095 of 2026), in which the High Court found that subscriber data was systematically extracted and trafficked to commercial actors between 2018 and 2019 through failures in Safaricom’s own governance.
A dossier circulating among sources close to that litigation alleges Karauri privately purchased a stolen cache of that data in 2019 for more than Sh25 million and later used it in his 2022 campaign.
It is important to be precise about where the evidence actually stands: that specific allegation is, on the public record, unproven no court finding names Karauri as a completed buyer, and a separate, more detailed investigative account of the same 2019 meetings drawn from court documents and DCI-adjacent reporting states that the data sale to SportPesa was proposed but collapsed when the sellers could not guarantee an ongoing supply, and that Karauri’s side of that exchange ultimately fed into the police complaint that led to arrests, rather than into a completed purchase.
The DCI forensic trail that has since implicated other operators betting firms does not, on the reporting currently available, place SportPesa among the confirmed buyers.
Kenya Insights is not treating the purchase allegation as established fact; it is flagging it as a live, contested claim that deserves continued scrutiny, not a verdict dressed up as journalism.
THE UNCOMFORTABLE BOTTOM LINE
None of this requires inventing wrongdoing SportPesa hasn’t been shown to have committed. The documented record is damning enough on its own terms: a company that has changed corporate skins at least twice in the middle of tax disputes; a Sh95 billion claim that KRA itself may have miscalculated but which still resolved at Sh17.5 billion; a fresh Sh1-billion-plus claim now frozen by a tribunal that found KRA jumped the procedural gun; and a betting economy so large that its annual stakes now dwarf equity investment in Kenya’s own stock exchange, even as one of its flagship brands keeps well over a billion shillings of contested revenue out of the Treasury’s hands.
KRA can rightly say that real-time system integration has improved visibility across the sector, and that Sh16.5 billion in fresh collections is a genuine administrative win.
But visibility is not collectability.
Every procedural misstep like the Friday 4:00 p.m. notices hands sophisticated, well-lawyered operators another year on the clock and every year on the clock is measured in classrooms not built, boreholes not drilled, and stipends not paid.
The tribunal has given Milestone Games breathing room it is entitled to under the law. Whether Kenya’s revenue architecture can ever move fast enough, and clean enough, to close that gap before the next rebrand and the next appeal is the question this newsroom will keep asking with the facts, not the innuendo, doing the talking.
Comments