Insights

What next after the Sportspesa debacle?

By Geoffrey Sirumba – Jan 11, 2018

The oldest profession in the world is prostitution. Illegal in most places, legal in very few and generally frowned upon, yet it has survived world wars and the bubonic plague- it’s still here. What is the fuss all about Sportspesa pulling out of all sports sponsorship programmes? Who stands to lose? Is it the Betting firms, Government, The various teams, the players or the society?

Our economy is cowboy economy, whereby you take as much as you can for yourself without any care whatsoever. If that status quo is threatened, naturally our reaction would be flight, fight or both. The flight will be through setting up in countries where taxation laws are still favourable and make as much as we can before the blind can be able to see. Fight mode will be counterproductive. The Betting firms are trying to arm twist the government by eliciting public reaction through pulling out of sponsorships. If only the taxation was implemented at 50%.

Alcoholic drinks, drugs, betting, and prostitution are social evils. The regulator has managed to put alcohol consumption on a leash or at least it looks that way not mentioning the occasional loss of lives from the illicit alcohol consumption.

The tax imposed on betting is fair, justifiable and the right thing to do at this given time where betting is seen as the easiest way to make money in this tough economic conditions where the unemployment rate is soaring. Betting has broken our social fabric because of the ease in which it can be done. Gone are the days where Betting was only limited to Casinos, racetracks etc. Technology has made it easy, press a few digits, voila! You are in! The stories doing rounds of parents who have taken loans to use to bet, students who feel lucky with their school fees? How many homes have been wrecked with the betting menace? Will the taxation reduce the level of betting? How many success stories do we know about betting? There are many questions than answer with the sudden high-pressure adverts from betting firms primarily meant to influence the independent thinking of the consumer and change their behaviour as a brainwashing catalyst, which is intended to manipulate the consumer into thinking that the betting is good. Media houses being a key beneficiary of this advertisement proceeds know which side of their bread is buttered.

Corporate social responsibility is a concept whereby companies integrate social and environmental concerns in business operations in a voluntary manner without any coercion and blackmail to do the same. Betting firms should not think only in terms of profitability but also how the company can add value to the community and society. Corporate social responsibility programs may be associated with significant and measurable benefits for companies. Betting firms benefit directly from this cause-related marketing which is a promotional strategy that combines public relations and sponsorship strategies where a company makes a philanthropic commitment to a societal need through a specific campaign, in this case, sports sponsorship. This increases brand loyalty as long as the company has a long-term commitment to the campaign, It also enhances morale and loyalty among stakeholders and also provides free advertising.

Betting firms are not being honest in their push on the government to rethink the new taxation rate claiming it will infringe on their ability to sponsor. Their proposal of 5-15% are outrageous, abnormal and ill-motivated; who do they think they are? NGOs? Apart from marketing costs, routine infrastructure maintenance, and wages. What else do betting firms require to operate? Raw materials. Betting firms are used to abnormal profits, which must now be kept on a check. Are they aware of the taxes paid by ordinary Kenyans on a regular basis? The 30% salaried employees with a hundred dependants pay as PAYE on monthly basis.

For the beneficiary of betting proceeds, it’s now time to put their house in order and attract new sponsors. With the current sports following what is lacking are proper management of these teams and proper structure put in place to regain confidence in financial management. The over-reliance of quick money should be an eye-opener; there are other sustainable sponsors out here who are ready and willing to sponsor our so-called orphans teams.

To the government, please do not negotiate with organizations that contribute to social vices, let everyone give Caesar what is Caesar’s.

Geoffrey Sirumba is Marketing Consultant in Nairobi. He can be reached via geoffrey@mapro.co.ke