Kenya has ordered telecoms firm, Safaricom, to stop processing payments for sports betting companies, potentially shutting down a lucrative source of revenue for the company.
Liti Wambua, the Acting Director of the regulator, Betting Control and Licensing Board, told Safaricom in a letter seen by Reuters on Thursday that licences for all 27 betting firms had not been renewed.
Wambua said that such payments should stop pending the outcome of an ongoing inquiry about their suitability to operate in the country.
“Consequently, we request you to suspend their pay-bills and short codes until otherwise advised,” Wambua said in the letter.
Responding, through its lawyers, Safaricom said it required time to carry out the order since abrupt implementation would result in shutting millions of users out of funds already deposited in the gaming wallets of the various betting firms.
“The directive by the board will impact over 12 million customers,” Safaricom said.
It added that two of the gaming companies had also obtained court orders allowing them to continue their operations without a renewed licence, further complicating the situation.
Safaricom executives told Reuters in the past that the betting industry, through text messages and M-Pesa, had become a significant part of its revenue in recent years.
Meanwhile, betting firms defend their activities.
“SportPesa is a law-abiding corporate citizen that upholds all tax and regulatory requirements,” said SportPesa, one of the biggest online betting and gaming companies.
Online sports betting companies have grown rapidly in the East African nation in recent years, riding a wave of enthusiasm for sports to achieve combined revenue of 204 billion shillings ($2 billion) last year.