Sport Pesa betting firm has announced that it will withdraw sponsorship for local clubs and organizations starting January next year.
According to the firm, the decision was arrived at as a result of the increased 35 per cent tax revenue.
Speaking on Friday during a meeting, CEO Ronald Karauri said the withdrawal will begin on January 2018
“Our cost of doing business will be greatly affected...we have to consider the impact on operating besides partnerships,” he said.
And through its official twitter handle, the firm confirmed that the will communicate with various clubs to pass the news.
“We will be giving notice to clubs and unions that from January 1 we will withdraw all sponsorships,” read the tweet.
This will be a major blow to the sporting sector, with the move set to affect football and rugby clubs.
Among the clubs that will be affected include AFC Leopards, Gor Mahia, and the Kenya Boxing League and rugby teams.
Former champions Gor Mahia had a five-year deal which was worth more than Sh200M, while Leopards had a Sh45 million annual deal for five year.
This will take the clubs, which were struggling before the firm came onboard, back to the drawing table, having been in financial turmoils for many seasons.
Regular fundraising events will be frequent, and a return of pay-related issues between clubs and players is set to make a comeback.
Initially, the law had set a 50 per cent tax on all betting firms, but was later reduced to 35 per cent after the president refused to sign the Bill into law.